Documents in Bank of America Probe Apparently Show CEO Misled Federal Officials

New documents in the Bank of America Corp. investigation show that chief executive Ken Lewis apparently misled federal officials when he asked them to cough up $20 billion and other financial incentives to keep him from canceling the bank's merger with Merrill Lynch & Co., Inc.---Lewis told the feds that he had just learned of Merrill's spiraling fourth quarter losses that eventually reached $15 billion, when in fact his bank had been following the growing losses throughout October and November. Corporate Counsel has previously reported about the timing of disclosure of the losses, and the new documents confirmed earlier stories. Lewis, the documents show, told the officials that the Charlotte, N.C.-based bank believed it had a "MAC" - a material adverse change that would trigger an escape clause that would allow Bank of America to get out of the merger. In fact, according to a story in story in Wednesday's Charlotte Observer, former general counsel Tim Mayopoulos told bank executives that they did not have grounds for a MAC.---
2 commentscategory: Abuse of Power/Corruption karma: 157

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  1. #1    Mayopoulos was fired was fired days before Lewis told the Feds he intended to "call the MAC." Lewis also did not tell the feds that his own lawyer had advised that there were no grounds to invoke the MAC. The lack of grounds, according to one source close to the deal, was because the merger agreement specifically stated that losses on transactions made prior to the agreement could not be counted as a reason to call a material adverse change. And the bulk of Merrill's losses were from prior transactions.
    written by Sparrows since 29 days 3 hours 5 minutesSparrows
  2. #2    so when is he going to appear in court?
    written by PHred42 since 29 days 1 time 53 minutesPHred42
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