Congress demands details on Bank of America's deal for Merrill Lynch
Filed under: Company News, Bank of America
Everyone wants to weigh in on the Bank of America (BAC) acquisition of Merrill Lynch and the subsequent disclosures about the deal. The SEC filed a case against the bank that was supposed to be settled, but a federal judge rejected the settlement. N.Y. Attorney General Andrew Cuomo has subpoenaed five B of A board members. And, for reasons that are hard to fathom, even the FBI and Justice Department want to review details of the transaction.
Add to that long list the House Committee on Oversight and Government Reform, which has told the bank that it cannot rely on attorney-client privilege to withhold details of its plans to distribute bonuses to Merrill employees or its knowledge of huge Q4 2008 losses at the brokerage firm.
An exclusive report in The New York Times reveals that U.S. Rep. Edolphus Towns (D.-N.Y.), who chairs the committee, said "the bank must divulge when it became aware of the enormous losses at Merrill last year." Towns also wants to know what legal advice management got about its plans to tell shareholders about the information.
The presence of Congress in the investigation could hurt the bank's efforts to turn itself around. B of A management will spend hundreds, if not thousands, of hours working on its defense against all the charges from these many sources. The bank will also spend millions of dollars on legal fees to help it work through the information that it will have to give to all the various government bodies that are investigating it.
The questions surrounding B of A's knowledge of Merrill losses and the bonuses paid to Merrill employees are entirely legitimate. But it would make far more sense for shareholders, including the federal government, if all these investigations could be funneled through a single agency, probably the Justice Department. B of A has enough problems handling operating issues. A large number of investigations, all trying to get at the same facts, ultimately hurt the taxpayers who have money invested in the bank's future.
Douglas A. McIntyre is an editor at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
9-21-2009 @ 9:08AM
Ken N. said...
This should be investigated. If their was wrong doing then those responsible should be charged accordingly. If their investigation turns up no wrong doing they this matter should be closed and put to rest.
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9-21-2009 @ 12:50PM
consiglieri said...
This is just more of the same on a topic that Congress conveniently rehashes from time to time when it needs to refocus its constituents on the now infamous "Villians of Wall Street" (does anyone have a phone number for Disney/Marvel???)....
I am tired of paying my representatives for creating their own public relations opportunities that are otherwise, useless. They just cannot seem to pass up the chance to create those beautifully produced "committee hearing" clips for their hometown 6 p.m. news that show them emphatically bullying those ugly, awful people that have the nerve to run their businesses to make a profit.....
The urge must be overwhelming - enough to cause a shareholder with $45 Billion (of taxpayer money) invested in a company to regularly, periodically release news that it knows presents a signficant risk to the reputation and well-being of its own investment?
I'm just wondering: who would be the one to hold hearings to dig into the role of our elected officials in this mess? I guess we really don't have time to wonder who empowered and encouraged Fannie, Freddie, the Rating Agencies, the Mortgage Brokers, the Appraisers, etc.
Will there be someone that will cement the link between our elected representatives, these agencies, the broken mortgage market and their own campaign donations?
Did I miss the last word on whether the institutions of our own government might actually have played a role in pushing Bank of America to complete the Merrill Lynch purchase (the one that may have saved our entire financial system from the imminent collapse that just about every business expert believes that it faced)?
I think I get it. If the drums are beaten loud enough and with enough conviction, you can't focus or get a word in edgewise......
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9-21-2009 @ 12:52PM
Alan said...
This is so stupid it's none of the governments business and they should first clean up their corrupt house's, both in the Senate and the House of Representitives first.
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9-21-2009 @ 4:07PM
Sally said...
Of coruse it is the governments business. After all BOA paid out these huge bonuses and then begged the government for bail out money which they received. If not the government's business, whose business is it!
9-21-2009 @ 1:25PM
MikeW67 said...
Financial reforms are long overdue. And the mega-banks have to be stabilized, they are too interconnected in the financial system we are all dependent on. After they are well, they should be broken up into smaller pieces so this cannot happen again -- found a cool site; Balkingpoints ; incredible satellite view of earth
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9-21-2009 @ 3:26PM
Davey Rockeyfeller said...
Oh my oh my! Another phony "investigation" to make a few graft sucking politicians look like they control anything? All they do is either raise taxes or dream up new things we need to be protected from to raise taxes. I mean they don't produce a product, mow lawns, or grow food! Of course the banksters are criminals but that's the system here and they've been paying the Congress off for years. Big joke. Now the "government" is the largest employer with Walmart second. So we're basically what communist Russia was a giant beauracracy that justifies it'self at the expense of truth, justice, and reality. America loses money and is living on borrowed trillions every year and no graft sucker in DC can do anything about. The globalist banksters have run the show since 1913, the rober barons and they control the dollar, blue chips, Wall St. the media, and "government". Just baloney. Iraq's best oil pool went to China and BP with Nippon of Japan getting the next best pool. Afganistan is just about the Caspian gas but that will be piped to India's booming economy. Meanwhile as Americans are sold out and bankrupted by the gangster banksters they will rake in the trillions and buy us back for pennies on the dollar. They're very big in Chindia now. Goldman Sachs, JP Morgan Chase, got the green shoots, not the people and the economy isn't a real economy just BS because losing billions every month isn't a real anything. Oh on Oct. 2nd when Europe votes on the Lisbon Treaty if the Irish cave in 27 European countries will basically cease to exist and the banksters will take over there with Germany the powerhouse. The eventual plan is to have one global system of finance and power headed by the ghoul banksters but wait, human beings to a banker are only a liablity, a cost on their balance sheets.....Uh oh.
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9-21-2009 @ 3:56PM
sgpcats said...
I would like an accounting of what congress is gettin. Dont they work for US??
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9-21-2009 @ 4:06PM
Mingo said...
The Congress nows all about the bonuses They are doing just whathas been going on for years from both parties Their friends are broke so the tax payer bails them out,then they give themselves bonuses with our money. Some of that money seems to find its way back into washingtons pockets. If people remember when we had a Mexico bailout lol of 40 billion a few years ago Well the money did not go to mexico but it went to investors in mexico In that 40 billion was a 7% profit included Now we are not talking billions but trillions and its being robbed as fast as they can do it We deserve it I guess we don't seem to care just change crooks
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9-21-2009 @ 4:42PM
Jack F. Doyle said...
BOA(Bastardbankers of America) just doubled all interest rates onf credit cards after haaving sucked billions of customers tax dollars to enrich themselves.
Anbody for a class action suit reply to doylespar@aol.com
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9-21-2009 @ 8:01PM
David S. said...
I'm happy that Congress will demand BONUS Details. Afterall it's on the taxpayers tab that these guys company exsists, Otherwise the Merril Lynch woulda went belly up. They shouldn't get ANY BONUS. Tehy ran a sloppy, top heavy company, that the taxpayer had to bailout. NOT a company that is exactly a star performer. If they have given millions in bonuses on taxpayers money, they should be forced to give all of it back. Immeadiatly. Either that or hire new boards of directors, and a new executive staff. Heck I could run their company back into the ground, Wanna give me a million in tax dollars??? LOL/ ACOUNTABILITY is a MUST. That is MY OPINION. SPEAKING FOR MYSELF.
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