Bank Of America's Fraudulent Acquisition Of ML Back In The Congressional Spotlight Tomorrow

Tomorrow at 10 am the House Oversight Committee will hold a hearing with SEC's Robert Khuzami (oddly Mary Schapiro, together with Chris Cox, had been scheduled to appear initially, however "in a series of last minute negotiations, members settled on Khuzami") to discuss what the SEC has already found to be a criminal transaction (and attempted to promptly bury under the rug if only if it weren't for one Judge Jef Rakoff). Details of the hearing below:

Washington, DC – House Oversight and Government Reform Committee Chairman Edolphus “Ed” Towns (D-NY) and Domestic Policy Subcommittee Chairman Dennis Kucinich (D-OH) will convene a joint hearing entitled: “Bank of America and Merrill Lynch: How Did a Private Deal Turn Into a Federal Bailout?  Part V?”  The hearing will examine the events surrounding Bank of America’s acquisition of Merrill Lynch and its receipt of Federal financial assistance. 

The hearing will take place at 10:00 a.m. on Friday, December 11, 2009 in room 2154 Rayburn House Office Building.  A webcast of the hearing will be available on the Committee’s website: http://oversight.house.gov.

As for the actual hearing, Dow Jones presents this advance look of how Dennis Kucinich will approach the interrogation:

[Kucinich] plans to present Khuzami with a financial forecast that had been prepared by Merrill Lynch a few weeks ahead of the December 2008 shareholder vote on the merger, according to subcommittee documents obtained by Dow Jones. The forecast omits projected losses from Merrill Lynch's illiquid assets for the month of December and underestimates by almost half the roughly $15 billion after-tax fourth quarter loss, the documents say. Based on the subcommittee's investigations, Kucinich says he believes Bank of America executives were aware of the red flags raised by Merrill Lynch's forecast. But that didn't stop them from presenting the document to their lawyers at Wachtell, Lipton, Rosen & Katz.

Kucinich says Bank of America's decision not to investigate the Merrill Lynch document and notify shareholders of any change in expectations amounts to "an egregious violation of securities laws."

Referring specifically to the Merrill Lynch forecast, [BofA spokesman Lawrence] Di Rita said, "The matter of Merrill's projected fourth-quarter 2008 losses was considered carefully and the decisions were made in good faith at a time of unprecedented economic and market upheaval."

And while committtee chairman Edolphus Towns is allegedly satisfied with BofA's behavior in the last year, "since it paid the last of its $45 billion debt to taxpayers" even though it does not have the ready sources for this outflow, and even though the deal was merely a front to allow BofA traders to scalp exorbitant bonuses one last time before everything collapses, Judge Rakoff may not share Towns' utter lack of interest with due process and punsihment of criminal behavior, especially where said criminal behavior has already been proven.