Andrew Cuomo Has Had Enough With Bank Of America's Cowardice, Plans On Filing Charges
The Attorney General, shockingly on the verge of "making charging decisions" with respect to Bank of America and its executives, sent an angry letter to Cleary Gottlieb, legal advisors for "TARP For Life" club member Bank Of America, demanding that Ken Lewis and other executives who may face some serious fines and or jailtime, stop hiding behind a client-attorney privilege which is preventing his office (and in a separate matter, that of Jed Rakoff) from making decisions on the matter of how much material information was hidden or misrepresented in the Merrill Acquisition, and present all the critically needed information.
Either way, now that Cuomo is on the verge of actually charging someone with criminal misdeeds, the only question remains who: will it be Bank Of America, with the likely fall guy being big man Lewis himself (and what more fitting end to the debacle than Ken going to jail, after being threatened by Paulson and Bernanke with eternal damnation, and deciding not to invoke the Mac clause), or, will it be Wachtell Lipton's main lawyer, Ed Herlihy, who, as we discussed previously, was instrumental in the arrangement of the ML-BAC transaction.
Bank Of America now has four business days in which to decide, based on its disclosures, who is going to be charged and with what crime. In the meantime, Rakoff must be also quite interested in this outcome. In that separate case, Bank Of America has until tomorrow, September 9, to come back to the judge with the additional information he has requested along the same lines. The next few days could end up being very interesting for Ken Lewis.
(17 votes)
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on Tue, 09/08/2009 - 15:41
#62734
I bet Ken gets to be the husband.
on Tue, 09/08/2009 - 15:58
#62755
lol +1
on Tue, 09/08/2009 - 17:44
#62866
300 LB. Wife sez "Slip into this thong hubby."
on Tue, 09/08/2009 - 20:28
#63007
What was the name of that old song? Kenny and the bitch.
on Tue, 09/08/2009 - 15:44
#62740
Coumo's gonna have a hell of a time getting a job on Wall Street.
on Tue, 09/08/2009 - 15:44
#62741
To the NY AG staff and Mr. Cuomo:
Thank you for your courage and intellectual fortitude in investigating this matter.
on Tue, 09/08/2009 - 21:06
#63044
who junked me? Mary? Kenny? I know you're retired now, Hank; was it you? (p.s. hank, do you REALLY do mescaline?).
I know it wasn't sweet sally from citi cuz she wants kenny's chair real bad.
on Tue, 09/08/2009 - 15:45
#62742
I hope Cuomo is not visiting $5,000/hr hookers across state lines.
on Tue, 09/08/2009 - 15:48
#62745
His cookies come prepackaged
on Tue, 09/08/2009 - 17:46
#62867
He's clean...doesn't want to be excommunicated.
on Tue, 09/08/2009 - 15:46
#62743
THANKS ZH !! Great post ! I hate B of A and even though they will never pay any "REAL" penalty, this is a step in the right direction.
on Tue, 09/08/2009 - 15:46
#62744
God let these f'n banks go down.... I am so sick of this ponzi scheme today.
on Tue, 09/08/2009 - 15:50
#62749
Perhaps they'd go down if we gave them a little push......
How much straw can a camel's back support anyway?
on Tue, 09/08/2009 - 15:49
#62746
very strong corp credit today
Corp credit - very strong move corp credit today (late in trading on Tues, IG was ~4.5-5bp tighter and HY was up 1.5 points, stronger than mid-day levels). Credit a
slight outperformer vs. equities today although recall during the month of Aug credit lagged stocks. Tues tracking as busiest day for US$ bond sales all year; companies
on pace for ~$11.3B worth of issues according to Bloomberg
on Tue, 09/08/2009 - 15:49
#62747
A shame really, I'm no fan of Ken Lewis but this smells like Goldman. Hanky Panky and Kamikaze Ben are every bit as involved as KL. I always thought the game plan was to push KL out and put Goldman boy Thain in, maybe that is still the play.
on Tue, 09/08/2009 - 15:54
#62751
"Hanky Panky" -- LOL
on Tue, 09/08/2009 - 17:53
#62877
Good prosecutors squeeze to climb the ladder of culpability. I've got to believe this more about his political aspirations than fronting for GS. I'm sure he believes his family is far more worthy to represent the Dems than the scuzzy Ark. & Chicago crowds.
So let's hope he keeps climbing the ladder and owns kevlar underwear. We could do worse than Coumo. And have.
on Wed, 09/09/2009 - 10:51
#63473
The corruption glass ceiling is sitting about gutter level these days.
on Tue, 09/08/2009 - 15:50
#62748
The judge has told the AG that the vice is in place and to bring him a body.
If Ken does not scream loud enough, then the lawyer will go next. But, a lawyer doing-in a lawyer, in that city? Not much of a chance.
I put my money on Mr. Lewis singing about the rest of the conversation that Bernanke does not recall.
on Tue, 09/08/2009 - 15:54
#62750
He had a chance to sing and he didn't. Too late now.
on Tue, 09/08/2009 - 15:56
#62753
That works for me but KL might have already played that card the wrong way when he got cutesy with semantics in front of Congress... "I didn't perceive a threat". I'm sure that was music to Bennies ears.
on Tue, 09/08/2009 - 16:04
#62761
Mr Cuomo,
Thank you. I just sat here trying to think of something profound to write, but "thank you" is all I can think of. The SEC is undependable and incompetent. The Treasury is corrupt in some areas. The Fed is a wild card and, occasionally, frightening. I would love to invest in the economy but won't spend a dime if it involves the den of thieves now controlling Wall Street. I would love to put some of my life savings into investments that would hopefully create jobs and reward me for saving. At this time,that goal is not possible because so many thieves are loose on Wall Street. Please keep up the good work and don't let us down. Thank you.
on Tue, 09/08/2009 - 16:29
#62780
62761..
Your paragraph IS profund. Well said. Your thoughts are shared by many.
on Wed, 09/09/2009 - 00:16
#63205
well said anon 62761
on Tue, 09/08/2009 - 16:07
#62762
'"TARP For Life" club member Bank Of America'
That's priceless. I needed a good laugh.
on Tue, 09/08/2009 - 16:09
#62764
Maily for future reference, the text inside the PDF can be extracted with various PDF readers. I used kpdf. Here's the quote in more readable form:
--
Bank of America's justification of these disclosure failures has been that the proxy
documents were prepared by two outside law firms. But Bank of America has not permitted the
issue to be explored at all, claiming attorney-client privilege. Indeed, we cannot even establish
whether these law firms were asked any of the questions vital to deciding whether to disclose:
Were the law firms asked to provide advice on whether Merrill and Bank of America needed to
disclose the major change in how Merrill set its bonus pool? Were the law firms asked to opine
on whether the accelerated bonus payments were appropriate given previously filed executive
compensation disclosures? Should the bonuses have been paid given Merrill's losses and the
need for taxpayer support? Were the bonuses appropriate? Should they have been disclosed
given Merrill's unprecedented losses? Were the law firms asked to opine on whether the
bonuses needed to be disclosed given that they were effectively being made possible by
promised taxpayer support? Who were the officers that sought the advice on these issues, and
what facts did they provide to counsel in seeking the advice? Without being afforded the
opportunity to ask these central questions, which Bank of America clearly puts at issue through
its position that its actions were made in reliance on advice of counsel, we cannot fully assess the
culpability of the Bank and its management concerning these disclosure failures.
As set forth above, we cannot simply accept Bank of America's officers' bald assertions
that their decisions to keep each of these material events from Bank of America's shareholders
were based on a full review of all the relevant information by their inside and outside counsel.
The law is clear that Bank of America and its officers cannot assert an advice of counsel defense
for their decisions, and at the same time persist in refusing to disclose the substance of the
conversations with counsel. Accordingly, we request that Bank of America reconsider its
decision to prevent this Office from adequately probing these crucial issues. We provide you
with this final opportunity to reconsider. Otherwise, we will proceed with our charging decisions
without giving credit to the advice of counsel defenses that Bank of America has not permitted
us to test.
Please provide us with Bank of America's decision by Monday, September 14,2009.
Feel free to contact me if you have any questions regarding the above request.
--
Apologies for the quasi-off-topic comment, and hope this helps.
on Tue, 09/08/2009 - 17:56
#62881
eeehhh hummm! Thanks for the warning.
on Tue, 09/08/2009 - 19:43
#62984
Yours is badly fomatted. The parent is fine. A pox on KDE and Gnome.
on Tue, 09/08/2009 - 16:11
#62766
Against the wall, BofA will throw Paulson and the Fed to the dogs to the extent possible. May not work, but they'll try it.
Expect a lifelong capitalist executive to let the government destroy him while he keeps his mouth shut? No way.
on Tue, 09/08/2009 - 16:41
#62798
How about charging the Fed and its members with treason for attempting to destroy a nation's currency?
on Tue, 09/08/2009 - 17:08
#62821
Cuomo is just trying to make a name for himself by stoking populist anger so he can move onto bigger and better things.
on Tue, 09/08/2009 - 17:18
#62824
.... "stoking populist anger" is one way to look at it.
another way is "doing his job enforcing existing laws and responding to public anger that is derived from people's outrage that possible crimes have been committed by a small group of financial institutions that have effectively seized control of the USA"
think Thomas Dewey in terms of lineage of NY prosecutors.....
on Tue, 09/08/2009 - 17:58
#62886
Rudy, Spitzer ... it's a natural. But I do like Cuomo anyway. He's smart.
on Tue, 09/08/2009 - 17:23
#62835
let's hope he moves on to bigger and better things. America needs people who do not fear sticking it so righteously to The Man. I hope when he's done with BofA he goes after JPM, then GS, then. . . insert-your-bank-here
on Tue, 09/08/2009 - 17:37
#62857
chances are very good that he will be the next Governor in NY.
on Tue, 09/08/2009 - 17:59
#62888
10:1 the sitting idiot is gone.
on Tue, 09/08/2009 - 17:53
#62876
Troll.
on Tue, 09/08/2009 - 18:10
#62907
Very good news. I hope this is just the first dribble out of a long pipeline. The sewage must be processed.
on Tue, 09/08/2009 - 18:21
#62922
ML's bonuses were supposed to be predicated on year-end results, which would've meant nothing. When senior execs found out about this, they accelerated payments to ignore financial results -- results on which the bonuses were supposed to be based. That amounts to THEFT. Someone should get to the bottom of this.
I AM ANGRY AND I WON'T TAKE IT ANYMORE!!!!!!!!!!!!!!!!
on Tue, 09/08/2009 - 21:37
#63079
I'm with you on this. That is the real issue here. BofA mostly avoided the whole subprime mess. They came in and tried to bottom fish by buying Countrywide before bankruptcy. Buffet was bottom fishing too. The supposedly smart guys bought too early.
The real criminals are the guys that ran Bear, Lehman and the GSE's.
on Tue, 09/08/2009 - 18:22
#62923
Go-go, Cuomo!
on Tue, 09/08/2009 - 19:22
#62977
Can anyone explain to me why Ken Lewis is the one on the hot seat here? I thought it was Paulson because he is the one that basically forced the shotgun wedding, and withheld important information regarding the state of ML's assets?
Looks like Ken Lewis is being set up as a classic fall guy and the GS crew gets away clean, as usual.
on Tue, 09/08/2009 - 19:52
#62990
in a nutshell, Lewis did not invoke the mac clause and it is pretty clear that he should have regarding the ml bonus matter as well as the ml losses that came to light during their due diligence. prima facie, big time sec legal violations.
i'm really not sure if paulson broke any laws with his behavior, though something must be wrong if a US treasury sec'y can tell a ceo that he and his board will be replaced if they don't do a deal that is desired by the treasury sec'y. i would like to hear other opinions as to which laws may have been violated by Paulson.
My view at the time of the fiasco which holds true now is that Lewis knew he had a materially adverse change and should inform shareholders. on the other hand, paulson and bernanke are beating him up with the a) previously noted employment threat and b) the whole "the system will crash and freeze up" and that if Lewis doesn't go along with it, the world will end. I strongly suspect there was some flag waving "ken, don't let america go down" and I suspect some private "don't worry, we'll cover your ass on this one" delivered to lewis from paulson, bernanke. on that note, i think the sec 33 million settlement was one of the payoffs but they got a little problem now thanks to Judge Rakoff and now NY AG Cuomo.
frankly, lewis was in a tough position and I suspect at least some of his motivation was to "save the system"....call me naive, but i believe it to be the case.
bottom line is that a ceo should follow the law and i am of the opinion that lewis blew it in that regard. i also think paulson did threaten lewis and certainly paulson knew about lewis' mac problem but conveniently stayed away from it, at least publicly.
due to Judge Rakoff and now Cuomo, we are likely to get some more details. this could get very interesting.
on Tue, 09/08/2009 - 21:15
#63057
Excellent.At last some sort of beginning...to what I hope will be a profoundly long list of miscreants being carted off to jail!Thank you Mr. Cuomo!
It is worth reiterating it is just a beginning.So many more left to incarcerate....
on Tue, 09/08/2009 - 21:19
#63067
WHY is Cuomo the only elected official merely stating the obvious and going after these crooks??
WHY is our president and Congress not leading the charge into prosecuting these theives??
on Tue, 09/08/2009 - 23:32
#63189
Uh, those are rhetorical questions, right?
on Tue, 09/08/2009 - 21:43
#63086
Madoff, Lewis as well as Sr. SEC staff for their complicity in the fraud.
on Tue, 09/08/2009 - 21:43
#63087
I predict Cuomo will soon fall victim to some scandal just like Spitzer. Not that Spitzer was such a great guy. But do you think some mere state governor wannabe will be allowed to get in the way of the largest depository institution in the world in any way that matters?
he'll be bought off or run over.
and all these people who think that lewis or thain had a real choice in the matter, wake and smell the coffee. this deal was about survival. go lynch Bernanke, Paulson and Geithner for your losses.
on Wed, 09/09/2009 - 04:41
#63273
This smacks of setting a bomb off or setting the can on fire down the block from where the bank's being robbed.
Too many more responsible are barrelling away in the getaway car. Chris Chris Cox, Pandit, Barney Frank, Chris Dodd, Lord Blankfein, and Jamie Dimon to mention only a few.
on Tue, 09/08/2009 - 21:50
#63094
It's an exquisite sense of satisfaction when you pursue someone, methodically, deliberately, who has done harm to you or others and you get them by the balls, squeezing, with no way out. At that moment when they finally realize it too. Checkmate..... POP...POP.
on Tue, 09/08/2009 - 22:29
#63143
Cuomo better hadn't have any skeletons in his closet...or mebbe he has now!
on Tue, 09/08/2009 - 22:45
#63155
I hope to hell that Cuomo has the good sense to stay off of airplanes and hookers. Otherwise, I foresee much crashing and burning.
on Tue, 09/08/2009 - 22:50
#63161
Somebody should write a book about this if charges are filed. Describing 3 to 10 years of litigation will provide a really exciting read. To help you out I'll give you the last chapter.
Ruling overturned on technical issues. NY State AG Whoever declines to refile charges.
on Tue, 09/08/2009 - 23:10
#63179
Wow, this is my first post here, and though I'm not quite as jaded as all of you. I couldn't help but pull up "It's a wonderful life" on you tube after reading this article. B of A is Potter, the small banks who aren't given tarp money are the "Georges". (Or were they given tarp money?) But in this case it's worse. The government just gave Potter a huge loan. George is sure to be sunk. Instead of giving people 50 cents on the dollar, he's giving them a dollar for a dollar. And we see it, to the tune of approx 5 "Georges" going under a week. I just can't stand B of A. Back when I was a starving college student that bank f&*$ed me out of just about red cent I had. I've heard a thousand stories the same as mine. Too big to fail? Man o man will I ever dance on their old corrupt ass grave when they're gone. I "walked" on B of A about a month ago, put my money elsewhere, just keep enough in it to pay the automatic bills. I think anyone with a conscience would do the same.
on Wed, 09/09/2009 - 02:09
#63235
Cuomo is a hero. He had better watch his back.
on Wed, 09/09/2009 - 04:47
#63275
B of A is the burger king of banks, Wells Fargo is the Pizza Hut of banks. I defaulted on both of them @ 28% interest, when they wouldn't give me a break. gave their callers custom ringtones (i.e. MUTE), and opened a checking acct at my local CU.
They won't cut you a deal until you default on them for a few months.
-Poor guy de-lurking
on Wed, 09/09/2009 - 06:09
#63290
Welcome. Glad you decided on the red pill.
"After this, there is no turning back. You take the blue pill - the story ends, you wake up in your bed and believe whatever you want to believe. You take the red pill - you stay in Wonderland and I show you how deep the rabbit-hole goes."
on Wed, 09/09/2009 - 07:00
#63299
thanks NZ, i guess i'm a "ruthless" (or 'rational') defaulter.
http://www.zerohedge.com/article/debt-repudiation-–-table
I t wasn't so long ago that i was getting 5 + credit card offers a day in the mail. i'm a starving artist w/ no assets and i live on 1g a month ... subprime x 10. seems i could have 'owned' a home if i'd wanted to. so absurd!
i borrowed money via credit offered for emergencies etc, just like a lot of losers, but i never thought of houses / cars - or any luxury; mostly food / rent. sometimes i wonder if the "hardship program" payments I'm making are even worth it.
I borrowed the money, and feel compelled to pay it back fair and square, but then, i feel guilty for giving my hardearned to bandits.
on Wed, 09/09/2009 - 06:06
#63287
A good start that will not be finished until Paulson, a Goldman mole who saved the the sorry ass of his beloved GS with truckloads of taxpayer cash, does the handcuffed hand over face perp walk. Leg chains too please. Can't trust that guy.
Where's our $13 billion of TARP money GS got from AIG, who got it from us, courtesy of you, Hank? That is stolen money, folks, pure and simple. Don't worry, I hear the prison wages are up to $.50 an hour and you'll have this paid off in no time.
on Wed, 09/09/2009 - 07:59
#63323
we all believed the Communists were infiltrating our government,industry, and banksjust a few short years ago...and 'war' was declaired on the villians. We have allowed a new kind of enemy to take over from within, quietly like a virus. And, we have all helped with our greedy demand for an extra nickel in some 'investiment' indifferent to abuse, harm, or truth. And, we believed that all profits should not be taxed, but loses should be deductable. We elected people who would stroke our wallets not our conscience. Why would anyone of you be so incensed that they very people you wanted to do your bidding would not be fleecing you now? Are you a Goldman fraternity brother here...NO, you are just a means to an end and disposable too. As long and any American continues to believe that their 401k is helping 'them'(and is actually worth the paper the statement is printed on) these guys will continue to prosper and get away with fleecing America and Americans. I applaud Mr. Cuomo, but all these guys are married to each other in a way that makes the maffia look like high school, and money buys anything in America. The 'plants and moles' were being put in place when Mr. Cuomo was in nickers and we were all shaking in our boots that the Russians were comming.
on Wed, 09/09/2009 - 10:49
#63470
Let's bring the banksters to their knees and take back this
once great country. There is absolutely nothing American about BofA. Imagine what a great country we could have if
we took the billions and billions of dollars we are handing over to these lowlife cowardly, weak, thieving scumbags and invested it in schools, health care, infrastructure etc. Ken Lewis should be in jail. Rise up people and post this link everywhere you can.
http://www.youtube.com/watch?v=jGC1mCS4OVo