Lisa Simpson
Feb 10,2010
In: Finance

Bank of America Officials Being Legally Hounded by the Attorney General of New York

Bank of america officials being legally hounded by the Attorney General of New York.

Andrew Cuomo the Attorney General of America is legally hounding Kenneth Lewis and Joe Price for having kept the shareholders in the dark about the actual financial health of Merrill Lynch at the time of taking it over. This has later caused the bank to endure heavy losses. Subsequently it had to be bailed out by the government.

Lewis has exited from the bank. Price is continuing but is no longer holding his previous post of chief financial officer. However the bank is bearing the legal expenses for battling the case for both Lewis and Price.

Lewis is being represented by Mary Jo White of Debvoise & Plimpton. She said, “Mr. Lewis has been unfairly vilified by the political search for accountability for the financial meltdown.”

In a complaint running into 90 pages, Cuomo brought some fresh charges against 5th February 2010. He alleged that Price was the main character behind the drama. Price has kept concealed the extend of the losses of the bank even from the lawyers of the bank while asking for advice as to whether to inform the shareholders about the worsening of the red ink in the books. In a note one of the executives opined that the losses make one “read and weep”.

Cuomo holds deadly weapons in his hands to hit the nail on the head. Under the Martin Act of New York State the Attorney General has wide powers regarding security enforcements.

Meanwhile the SEC is trying to close its pending troubled inquiries to a close. But the latest settlement it has reached with Bank of America needs the nod from Jed Rakoff the United States District Judge. Rakoff had previously rejected a previous accord involving $33 million saying that the amount was ridiculously low. He had rejected the deal using scathing language. SEC was being criticized for being too soft on the bank as well as on its executives. Judge Rakoff is scheduled to give a hearing on the new agreement on Monday 8th.

Legal pundits are saying that many issues that are controversial in nature are emerging from the financial mayhem pertaining to exorbitant bonus for the bankers, government duplicity and the like that have ultimately harmed the investors. All these points have come together in this case of Merrill Lynch.

The Congress legislators made use of this chance to question the heads of the Federal Reserve and Henry Paulson the secretary of the Treasury for their involvement.