Ken Lewis Won't Settle Civil Charges With Cuomo, Bernanke And Paulson Will Likely Appear As Defense Witnesses In Trial

Tyler Durden's picture

Yet another development in the saga of Ken Lewis, which everyone seems to have mostly forgotten now, who as a reminder is being sued by NY AG Andrew Cuomo, was just broken by Charlie Gasparino who claims that the former head of BofA is refusing to settle and will instead likely go to trial. In his lawsuit Cuomo alleges that Lewis violated civil securities laws by not alerting shareholders to the enormity of
the losses prior to their vote. The cherry on top: Bernanke and Paulson will likely end up as defense witnesses - we wonder if the two will invoke the 5th against self-incrimination.

From Fox Business:

Former Bank of America CEO Kenneth Lewis has told his attorneys that he doesn’t want to settle
civil charges brought by the New York Attorney General’s office that he
failed to properly alert shareholders about upcoming losses in order to
complete an ill-fated purchase of Merrill Lynch at the height of the
financial crisis, FBN has learned.

Lewis has
made his intentions clear to his legal team, headed by former U.S.
Attorney for the Southern District, Mary Jo White, after Andrew Cuomo’s
office offered to start settlement negotiations with the former CEO.
Lewis left Bank of America at the beginning of the year amid various
probes into the big bank’s purchase of struggling brokerage firm
Merrill Lynch in the fall of 2008. BofA agreed to purchase Merrill the
same weekend that Lehman fell into bankruptcy and sparked the most
critical phase of the financial meltdown, leading the massive government bailout of the financial system.


FBN has learned that both Paulson and Bernanke may be called as witnesses by White if the case goes to trial, as Lewis
now wants.
That is, of course, unless the case gets dismissed, which White plans to file for at some point. No court date
has been set.


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hungrydweller's picture

Juicy!! Grab some popcorn for this movie!

docj's picture

Absolutely!  I'll be getting the trash-can sized bucket for this one.

Extra butter.

Gordon_Gekko's picture

Or not. They might just get it dismissed by paying off the judge. It's not like it's a country of laws, you know. A f--king dictatorship is more like it.

Cognitive Dissonance's picture

At least the soap opera will continue for a while longer, even as the nation crumbles.

I call first row.

malusDiaz's picture

First Row! But I call the seat next to the emergency exit!


*Lights up in the theater*


Nobody minds with all the smoke in hear already right?

monmick's picture

There is as much chance of this going to trial, and of Bernanke and Paulson appearing as witnesses, as there is of me being named the next Fed Chairman... and I have been dead for several decades...

faustian bargain's picture

I triple-dog-dare Bernanke to wear a Che t-shirt for his court appearance.

monmick's picture

...or his next appearance before Congress. I wonder what impact that would have on the $US?

WSMassiv's picture

Agreed - no way this goes to trial.

Internet Tough Guy's picture

Uh oh, Ken Lewis better watch out for hit-and-run drivers.

Rick64's picture

I was under the impression that paulson(or Treasury staff) told him that it wasn't an issue. If thats the case wouldn't paulson be an accomplice or at least partially responsible.

Crummy's picture

They do realize that this trajectory is going to end in some sort of public execution by throngs of enraged citizenry, right?

I mean it seems like it could happen, in light of human history, but I guess no one ever thinks it will happen to them because, "this time is different".

Ned Zeppelin's picture

Look up "immunity" in the Oxford Dictionary and there's a group shot of Bernanke, Paulson and Lewis.

Nothing will come out of this - certainly not justice.

buzzsaw99's picture

i'd rather they were co-defendants.

chumbawamba's picture

...we wonder if the two will invoke the 5th against self-incrimination.

Uh, no.  Rather, we wonder how and when Lewis will meet some unfortunate and tragically (for the interest of "justice") untimely demise due to a strep infection or some such IF Tweedle Dee and Tweedle Dum are actually called to the stand.

I am Chumbawamba.

velobabe's picture

yeah, in his $20M mansion on red mountain, aspen CO.

that is where all the blameless bankers go to die¡

damn, why did i have to pull out my calculator again?

ZH knows i am dumb†

BoeingSpaceliner797's picture


Kind of surprised Mr. Lewis has not already fallen unexpectedly and terminally ill.  I'm with you and some others here in believing that there is absolutely no way Paulson and Bernanke take the stand.

Shameful's picture

Lewis is playing it smart.  He knows that if he tries to drag Paulson and Zimbabwe Ben in Cuomo will have to drop the case and he won't have to settle.  The political pressure on Cuomo to drop it would be intense to put it midly.

mikla's picture


Paulson and Bernanke have immunity (central bank employees are explicitly above all national and international laws), but they won't like the attention.  Lewis is totally screwed, and knows it, and is playing the only poker chips he has.

This will settle out of court.  However, if it goes to court (due to some freak accident that pressure didn't get it to settle, or the bullet missed), all it will do is fan the public disdain against the corrupt institution that is the Fed.  No actions will be taken against Paulson/Bernanke, other than a public scolding (which is more of a lame whining).

There is a reason "The Vigilant" have played a key role in this country and others, at various times throughout Human history.

Shameful's picture

While they may have total immunity that is not public knowledge and should the public find out that they can loot, rape, and steal with impunity they might get miffed.  This is more about public image damage control at this point.  Cuomo thought he could pick Lewis because he clearly broke the law and is a relative outsider.  Turns out Lewis is a smart cookie and is threatening to drag part of the scam down with him.  That is why he is refusing to settle, it's a game of chicken.  He expects Cuomo to back down.  Cuomo made a tactical blunder, he thought this would be good for his rep.  Now he has to choose to drop this or have the big boys shower him with their wrath.  Likely he will drop it for some campaign money.

TheGoodDoctor's picture

Maybe it is Cuomo who wants Bernanke and Paulson to take the stand. Maybe he figured that Lewis would take it to court.

dnarby's picture

They have immunity from the US Constitution?

mikla's picture

They have immunity from the US Constitution?

Yes.  Hell yes.

This is a big topic, but it deals with the Federal Reserve Act of 1913, plus international agreements added over the years, like the establishment of similar central banks throughout the world after WWII.

In short, there is no punishment in the Fed charter for the Fed violating its charter (so it does, at will).  Congress is supposed to discipline the Fed, but has no idea how to do that (so the Fed tells Congress what to do).  Recently (e.g., as of the past few years), the Fed literally has the US Treasury by the balls (since it can kill any US Bond auction at will).  All central banks, including the Fed, manage their financial accounts through the Bank of International Settlements (BIS) established in 1930, which is explicitly outside the jurisdiction of all nations (they cannot be audited, and no governmental official on the planet has the authority to trespass on their facilities).  Among other things, the BIS explicitly grants all its agents immunity from all governments, and the US Federal Reserve chairman (a BIS agent) has this immunity for life (even beyond his term of service).

Bob's picture

Damn, it would be nice to see that become public knowledge and wrath via high profile legal procedings that even the MSM would have to cover.  The plot thickens, from all sides.  Most likely, though, Cuomo punks out. 

Bob's picture

Agreed as to strategy.  Let's see how it plays.

faustian bargain's picture

So is Cuomo's office getting phone calls from Paulson and Bernanke's people: "What the fuck, Andy!? Make this go away." Or is Lewis's legal team now wearing bullet-proof vests? Would love to know what's going on behind the scenes right now.

Ned Zeppelin's picture

We talked about this months ago.  Lewis is staring at 100% valid and indefensible securities laws violations here, and the statement about calling Bernanke and Paulson as "defense witnesses" refers to Lewis's only defense, which I'll call "Da Gub'ment Made Me Do It."  And B&P definitely did strongarm Lewis into the transaction as co-conspirators.  Twill be interesting, but as many note, the folks in charge really don't have an interest in rehashing this particularly unfortunate chapter, so the motion to dismiss will be successful.  No way B&P appear in a courtroom or a deposition under oath. Ain't happenin'.

Nihilarian's picture

"I know what I don't know. To this day, I don't know technology, and I don't know accounting or finance." - Bernie Ebbers (ex-CEO of Worldcom)

carbonmutant's picture

More circus, less bread...

Gordon_Gekko's picture

Just another forgotten INSECT. Do you miss the flies you swat? Then you won't miss Ken Lewis.

SteveNYC's picture

You are right. I could give a fuck about Ken Lewis. I'd be happy if he was simply fed to his own shareholders and dealt justice in whichever manner they choose.

Paulson, Bernanke, and Geithner however, are much bigger fish and are have been far more detrimental to the middle class then Ken "insect" Lewis could ever hope to be. These fuckers enabled the biggest swindle of all time, and these are the guys that should be defending themselves in the dock.

BoeingSpaceliner797's picture

As traitors, P, B and G (almost PB&J, how quaint/nauseating) should be swinging from the gallows posts.

faustian bargain's picture

I'm in agreement, but it's unfortunate that the sentiment seems to be "Ken who?", because a higher profile on this event would help to raise the ire of the public. Wouldn't it be interesting for the public to make a stink about Lewis getting the case dropped, and if people were aware that the case was dropped simply due to BB and HP not wanting to be part of it? I mean there are still some public image issues to deal with.

(Which is why I will be surprised if this gets a lot of coverage in the news media.)

InstantWinner's picture

A ton of these Wallstreet fuckers should be in jail but the government ain't doing jackshit. Why?

Madcow's picture

Ken Lewis:  "If you guys think you can turn around and blame all this on me you can $uck it"


The tide has turned. These people are starting to turn on each other. Like beta fish in a bowl ... trust no one ... 

We've got a fascinating ten years ahead - of criminal investigations, witch hunts, famous betrayals, congressional hearings, special prosecutors, and probably televised executions at some point. 


Think how much money the Treasury could raise by licensing the broadcast rights to Bernanke and Geithner getting raped in prison for the first time - 



Gimp's picture

No skiing for Ken.

Paulson and Helicopter Ben are probably practicing in front of the mirror right now:

"I don't recall"

"I can't remember"

"Ken who?"


TheGoodDoctor's picture

Yeah just like AG Gonzales.

Miyagi_san's picture

Justice will get an ass whooping like in the Rakoff deal.

TheGoodDoctor's picture

Plead the fifth? They more than likely are drinking a fifth right now! Perhaps this is what Lewis is trying to do get Bernanke and Paulson on record lying and then someone else exposes them with other evidence.

AnonymousMonetarist's picture

Bene. Don Paulson. I need a man who has powerful friends. I need many billions of dollars in cash. I need, Don Paulson, those regulators that you carry in your pocket, like so many nickels and dimes.

VITO PAULSON (gets up to pour LEWIS another drink)

I said that I would see you because, I heard that you're a serious man, to be treated with respect.

(then, after sitting)

But uh, I must say "no" to you -- and I'll give you my reasons. It's true, I have a lot of friends in politics, but they wouldn't be friendly very long if they knew my business was leverage instead of regulating, which they rule that as a -- harmless vice. But leverage is a dirty business.

Don Paulson...


It -- makes -- it doesn't make any difference to me what a man does for a living, understand. But your business is ah -- a little dangerous.

Nikki's picture

Like Spitzer before him all this is about Cuomo moving up the ladder into the Governor's mansion. When the party ok's his run he settles the case for a Mc D coffee and $7 in fines... With no admission if wrongdoing and the case is dismissed with predjudice.

No wall street or k street fraudster, bankster, con man, crook or other is going to see the inside of a courtroom. The oligarchy goes on without Ken Lewis... Like herpes, he'll be back in a BOD seat somwhere...

theadr's picture

So glad Ima gonna outlive all these rat bastards, spare parts and all, so I can tear up the sod of their graveside with my blue suede shoes.  They best hope they're cremated, else they'll ring in my honeymoon ride.

sweet ebony diamond's picture

i like the term "economic treason"

might it be added to the common-law?

mikla's picture

Already there. Section 19 of the Coinage Act of 1792 established the death penalty for any person that debases the currency.

It doesn't matter, since we don't enforce laws and contracts anymore.  Hell, we don't even follow the Constitution anymore.

In terms of this discussion (economic in nature), our complete abdication of laws is why capital is fleeing the US.

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