Cheered on by US TARP Special Inspector Neil Barofsky, NY State Attorney General Andrew Cuomo just filed a lawsuit vs Bank of America Corp., ex-CEO Ken Lewis and ex-CFO Joseph L. Price "for duping shareholders and the federal government in order to complete a merger with Merrill Lynch." Read the NY lawsuit here.
Excerpt: "Bank of America's management misled its shareholders by not disclosing massive losses that were mounting at Merrill Lynch so that shareholders would vote to approve the deal. Once the deal was approved, Bank of America's management manipulated the federal government into saving the deal with billions in taxpayer funds by falsely claiming that they intended to back out of the deal...
"This was an enormous fraud on taxpayers who ended up paying billions for Bank of America's misdeeds... Top management, was motivated by self-interest, greed, hubris, and a palpable sense that the normal rules of fair play did not apply to them."
OK now: 1) Isn't BofA paying the money back? 2) If the US hadn't financed the deal and BofA backed out, wouldn't Merrill have failed, making a bigger mess? 3) Can't Cuomo find some giant Wall Street firms to sue, without going all the way to North Carolina to bash BofA?
Though, after all, Merrill used to be a New York firm... The suit comes the same day BofA says it settled with the Securities and Exchange Commission and North Carolina regulators over the same deal, without admitting wrongdoing, for payments totalling more than $150 million. BofA statement here.