Bank of America – Ken Lewis Charged with Civil Fraud
Bank of America charged with civil fraud
Ney York attorney general Andrew Cuomo filed civil securities fraud charges against former Bank of America CEO Ken Lewis along with the former CFO.
The charges allege that they (Ken Lewis and the CFO) decided not to disclose mounting losses at Merrill Lynch before getting the approval from the shareholders to acquire the firm in the shotgun wedding. Separately, the Securities and Exchange Commission (SEC) reached a deal to settle allegations of misleading investors and Bank of America will pay penalties of $150 million. The new settlement still requires a judge’s approval.
The new charges brought on by NY Attorney General are civil fraud charges. If found guilty, then former CEO Ken Lewis and the CFO may face more than just ‘a fine’

Remember the MOVE YOUR MONEY movement which I strongly support.
The full complaint can be read below:
Andrew Cuomo’s Lawsuit Against Bank of America and Ken Lewis
Boycott Bank of America ASAP
As the ‘video of the day’ on the right hand side of my site details the circumstances, it is Karl Denninger who puts it into words very well.
[...] And this has nothing to do with the fact that I believe they’re hiding losses, that they’re under investigation 7 ways from Sunday regarding the Merrill merger, or that BofA likes to bang you in the backside with usurious “overdraft fees”, even though any of those standing alone is more than enough reason to run this bank into the ground.
Nope.
It is about this:
A South Carolina Bank of America branch is drawing criticism Thursday after an employee reportedly ordered the removal of American flags placed to honor a fallen Marine over fears that people would be offended.
The Palmetto Scoop received one eyewitness email claiming that the branch manager at Bank of America’s Gaffney branch at 1602 West Floyd Baker Blvd. “told a citizen who was preparing the route for a U.S. Marine killed in action in Afghanistan by placing small American flags along the roadway that the flags might upset some of her customers.â€
Said the outraged tipster, “[The branch manager] took them down and made the citizen go in to get them if she didn’t want them thrown away.â€
The flags were part of the funeral procession of Lance Corporal Christopher Fowlkes, 20, who died last week after an explosion in Afghanistan’s Helmand province.
Bank of America said:
“We want to ensure the community knows how deeply proud we are of the men and women who have sacrificed so much in service to our country,†the statement said. “The bank does fly the American Flag at our locations throughout the country and flags were displayed in front of our banking center in Gaffney the evening prior to our dedicated Marine returning home.â€
A miscommunication in policy? And flags were permitted to fly in front of the location the evening prior – when the bank was closed and no customers would see them – but not when it was open?
You can see Karl’s full post on his site HERE
Bank Of America – Fire Ken Lewis
After Ken Lewis is out of a job we need to fire Vikram Pandit of Citigroup. With the tax payers owning a large portion of these corporations I say we fire these CEO’s immediately.
Editorial note by Chuck: Bank of America and Citigroup (both being propped up by tax dollars) are disgusting companies and need to be dismantled. Have a checking account at one of these banks? Take it elsewhere, don’t give them your business. Find a small local bank that is ‘not’ being propped up by TARP funds or other forms of government aid.
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FEDGATE – Bank of America & Federal Reserve
I’m coining a new term tonight and it is FEDGATE.
After the Federal Reserve was subpoenaed to provide documents relating to the Bank of America and Merrill merger some dirty laundry is coming out.
In emails obtained by the House Oversight and Government Reform Committee it would appear that Fed Chairman Ben Bernanke did put pressure on Bank of America CEO Ken Lewis to ‘keep quiet’.
E-mail messages from the Federal Reserve chairman Ben S. Bernanke and others indicate that executives at Bank of America were pressured to keep quiet about concerns over Merrill’s financial condition, according to a document written by House Republicans.
The documents, which were subpoenaed by the House Oversight and Government Reform Committee, were cited in a staff memo for Republicans ahead of a hearing Thursday where the chief executive of Bank of America, Kenneth D. Lewis, will testify.
One e-mail message shows pressure from the Fed on Mr. Lewis to stay the course on the deal, or have management removed.
In an e-mail from Jeffrey M. Lacker, the president of the Richmond Federal Reserve, speaking about Mr. Lewis’s intention to exercise a “material adverse change†or MAC clause to get out of the Merrill deal, Mr. Lacker said:
â€Just had a long talk with Ben … Says they think the MAC threat is irrelevant because it’s not credible. Also intends to make it even more clear that if they play that card and they need assistance, management is gone.â€
Mr. Lacker’s region includes Charlotte, N.C., where Bank of America is based.
Mr. Lewis has come under fire from investors wanting to know why the bank did not notify them of Merrill’s losses in December, when the bank told the government it would need additional support to ensure the merger would survive.
In January, Mr. Lewis told analysts that he was surprised to learn in December, three months after the bank snapped up Merrill Lynch, that the losses at the brokerage were far greater than expected. He said he had considered walking away at that point, but was persuaded not to, partly by regulators who feared that a failure to seal the deal could set off a new round of panic in the markets.
The decision to stick with Merrill despite its problems, he said, was patriotic. Source: NY Times
With Ken Lewis appearing before a hearing in Washington tomorrow it should make for a great ‘who said what and when’. And if Ben Bernanke did influence the witholding of material information then Ben will have some bigger problems than just the economy.
Sphere: Related ContentKen Lewis – Bank Of America CEO To Resign?
‘Business Insider’ is reporting the following this evening:
Talk of an imminent departure for Ken Lewis is heating up tonight.
On the same day The Journal ran a profile of a likely successor, a high level Wall Street source tells us that active discussions are underway at Bank of America (BAC) for its longtime CEO to step aside. The exact timeframe of a Lewis departure is unclear.[...]
My comments: Ken Lewis… GET LOST. Ken Lewis is another example of Wall Street’s worst. Oh, and be sure you leave OUR tax dollars at the door before you walk out.
Sphere: Related ContentBank of America – More Pickpocketing of Tax Payers
The ‘big’ banks continue to “stick it” to the tax payers of this nation. Today the CEO’s of the biggest banks met with President Obama to discuss the nations banking crisis.
Following the meeting, each CEO made a statement and of course all the statements were the usual bright and cheery ‘constructive, good dialog, or ‘administration doing good job’. OF particular note was a statement by Ken Lewis, Bank of America CEO. He said that…
[...]“We recognize the Golden Age of bank compensation is over”[...]
But, just two hours later Bloomberg broke the story that Bank of America plans to issue pay raises to some of its investment bankers’ salaries by 70% (that’s right, seventy percent).
March 27 (Bloomberg) — Bank of America Corp. plans to increase some investment bankers’ salaries by as much as 70 percent following the takeover earlier this year of Merrill Lynch & Co., people familiar with the proposal said.
Bank of America, which has received $45 billion of taxpayers’ money, may raise the annual base pay for some managing directors to about $300,000 from $180,000, said the people, who declined to be identified because the final numbers are still under discussion. Salaries for less-senior directors would climb to about $250,000 from $150,000, and vice presidents would get $200,000, up from about $125,000, the people said.[...]
[...]The adjustments, which may be rolled out as soon as next month, are designed in part to align the salaries of employees at Charlotte, North Carolina-based Bank of America with workers at New York-based Merrill, one person familiar with the plans said. Salaries for traders and other employees outside the investment bank may also be adjusted, the person said.[...]
So with the outrage over bonuses the banks now will avoid the bonus terminology and instead substantially raise salaries.
[...]The worst financial crisis since the 1930s has spread across the economy, lifting the U.S. unemployment rate to 8.1 percent, the highest in more than 25 years, and causing the biggest quarterly economic contraction since 1982.
“We’re in an economic downturn, the government is pouring billions into banks, and these guys are boosting their salaries,†said Jason Kennedy, chief executive officer of London-based recruitment firm Kennedy Associates. “There’s an issue of public perception.”[...] [rebeltraders note: This is an issue of public responsibility and ethics]
And what is even worse? Citigroup and Bank of America appear to be working on a plan that will leave tax payers with an even bigger bill on our hands, and more money in their coffers.
From the NY Post:
As Treasury Secretary Tim Geithner orchestrated a plan to help the nation’s largest banks purge themselves of toxic mortgage assets, Citigroup and Bank of America have been aggressively scooping up those same securities in the secondary market, sources told The Post.[...]
[...]But the banks’ purchase of so-called AAA-rated mortgage-backed securities, including some that use alt-A and option ARM as collateral, is raising eyebrows among even the most seasoned traders. Alt-A and option ARM loans have widely been seen as the next mortgage type to see increases in defaults.
One Wall Street trader told The Post that what’s been most puzzling about the purchases is how aggressive both banks have been in their buying, sometimes paying higher prices than competing bidders are willing to pay.[...]
Now lets explain this. The largest banks have [combined] $trillions of toxic garbage on their books. And it is these very same toxic assets that the banks ‘claim’ they can’t sell because there is no market for them. And this is why the Government is establishing the toxic asset purchase plan which will use more tax payer funds to encourage other firms to start buying these toxic time bombs.
So if the banks are complaining that they can’t get rid of this junk then why are Citigroup and Bank of America out in the field scooping up even more of the very same toxic garbage? Because under the new Government plan it is likely that these companies will simply unload them into the tax payer funded program at a higher price, leaving us with the bill.
The banks get a quick buck by purchasing more toxic garbage at roughly 25 to 40 cents on the dollar, and under the Geithner plan will be able to unload them at a higher cost, all courtesy of the taxpayer.
These financial institutions are going to ‘game the system‘ in any fashion they can, plunging the tax payer debt further into a black hole.
Are there ‘any’ ethical bank CEO’s left? I have to wonder. Vikram Pandit (Citigroup CEO) and Ken Lewis (Bank of America CEO) are monuments of hypocrisy.
Hey Vik and Ken… as a tax payer I have only one word for you: RESIGN
Sphere: Related ContentThe financial crisis in America is really a moral crisis, caused by the series of proofs . that the leading financiers who control banks, trust companies and industrial corporations are often imprudent, and not seldom dishonest. They have mismanaged funds and used them freely for speculative purposes. Hence the alarm of depositors and a general collapse of credit.”– The Economist, November 2, 1907
Bank of America – CEO Ken Lewis Needs to Resign
I feel that Mr. Ken Lewis must immediately resign his position as CEO of Bank of America. Moreover he must repay billions of dollars to the American tax payers.
The story of Merrill Lynch (MER) having given out billions of dollars in bonuses just prior to selling itself to Bank of America (BAC) gets deeper and more outrageous.
The Financial Times broke the story tonight:
Bank of America played a role in Merrill Lynch’s controversial decision to pay $4bn in bonuses in December just as mounting losses were threatening to derail BofA’s takeover of the Wall Street firm, according to people close to the situation.
BofA has said that the payment of $4bn in compensation in a fourth quarter in which Merrill racked up $15bn in losses was sanctioned by John Thain, Merrill’s chief executive.
Sphere: Related ContentJohn Thain Told to Take a Hike – Merrill Lynch CEO is Now History
Perhaps yesterdays revelation that Merrill Lynch, under the stewardship of John Thain, gave out Billions of dollars in bonuses just days before they were purchased by Bank of America. And then later announced they had huge losses and needed more Government (tax payer) money.
I think Ken Lewis (CEO) of Bank of America was genuinely pissed off about John Thain’s actions. But, at the same time I am confident that Mr. Lewis was ‘fully’ aware of the bonuses being handed out at Merrill. He is just ticked off that it made the press and everybody is criticizing them for it (and rightfully so). So Mr. Lewis is just playing the game of trying to make it all appear as if this is John Thain’s fault.
Sphere: Related ContentBank of America & Merrill Lynch – Now I’m Really Pissed
This is all the evidence needed that the CEO’s of the large banks and financial institutions are only looking out for themselves, even as they ask for money from the tax payers!
They claim they are being ‘good stewards’ of our tax payer money. This is a lie!
The Financial Times is running this story tonight… hot off the presses:
Merrill Lynch took the unusual step of accelerating bonus payments by a month last year, doling out billions of dollars to employees just three days before the closing of its sale to Bank of America.
The timing is notable because the money was paid as Merrill’s losses were mounting and Ken Lewis, BofA’s chief executive, was seeking additional funds from the government’s troubled asset recovery programme to help close the deal.[...]
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