NY AG Cuomo Hits Ken Lewis, Bank Of America With Fraud Charges

New York Attorney General Andrew Cuomo filed fraud charges against Bank of America and its former top executives this morning, alleging the bank manipulated the company's shareholders and the federal government in order to carry out a merger with Merrill Lynch.

According to the lawsuit, former CEO Ken Lewis and former CFO Joe Price hid more than $16 billion worth of losses at Merrill from shareholders in order to ensure their approval of the merger. But after shareholders voted to buy the ailing firm, the bank approached the government to demand an infusion of taxpayer cash. Without bailout funds, they told regulators, BofA would be unable to complete the merger. The government capitulated and funneled $20 billion of TARP money into the bank.

Attorney General Cuomo called Bank of America's conduct "a classic example of how the actions of our nation's largest financial institutions led to the near-collapse of our financial system":

"This was an arrogant scheme hatched by the bank's top executives who believed they could play by their own set of rules. In the end, they committed an enormous fraud and American taxpayers ended up paying billions for Bank of America's misdeeds."

Bank of America spokesman Robert Stickler defended the bank's former executives, calling the charges "regrettable" and "totally without merit":

"The evidence demonstrates that Bank of America and its executives, including Ken Lewis and Joe Price, at all times acted in good faith and consistent with their legal and fiduciary obligations," Stickler said. "In fact, the SEC had access to the same evidence as the NYAG and concluded that there was no basis to enter either a charge of fraud or to charge individuals."

Cuomo's investigation was conducted in conjunction with TARP Special Inspector General Neil Barofsky, who said the suit "should send a powerful message that we will work tirelessly to hold accountable those who have engaged in misconduct relating to the response to this National crisis."

A copy of the lawsuit is below:

BoA_Complaint -

Comments

[Need a Modifcation]

01:28 AM on 02/16/2010

Bank of America is Very SICK. There are things very very wrong at Bank of America in there
Modification Program......THe Government needs to step in and Do something.
Bank of America is hurting the American Family. They are ruining lives of hardworking
middle Class people all over America...Please Government step in and do something!

And People Join the "Move your Money" Movement. This Big Bank is Too Big!
The best thing you can do is fine a Local Bank or Credit Union.
Don't keep getting treated Bad.

The Government needs to hold Angelo Mozilo from Countrywide and Ken Lewis
accountable for all the Fruad, Racketerring, and many of other illegal activities
they and Bank of America and Countrywide engaged in. Stop the Mortgage
Fraud now please Government!!

[Mahi Joe]

08:04 AM on 02/08/2010

What about the Board of Directors of these banks? Someone had to approve of the CEO's actions.

[imsosure]

12:01 AM on 02/08/2010

Finally something good to report about BofA

[daveschwartz007]

05:39 PM on 02/07/2010

how could you charge Ken Lewis and not charge hank paulson and timmy geithner. how could you not charge john thain too? I hope Ken Lewis spills everything and the attorney general of NY sues the federal Gov't. Might as well charge the fed bank of NY and the NY dept of insurance. need to charge Cox from the SEC for incompetence too for not reinstating the uptick rule. Why aren't the media and the press reporting on all of this. Go after the white house for fudging the GDP and unemployment figures. Cuomo or Lewis are going to end up underneath the ground if they open their mouths of what they really know. Lewis should not be the patsy and the fall guy for this.

[liveordie]

04:56 PM on 02/07/2010

New York does have good AG's. Too bad there all not as good.

[hobo62]

10:47 AM on 02/07/2010

Gee, I sure would like to punch this smug sob in the face.

[TruEngineHearing]

08:33 AM on 02/07/2010

If they hid the 16billion, that's certainly enough for the feds to file charges. And if the scheme was hatched to blackmail the government - either gimme money or I'll fail on your watch - then corporate butts need to be sitting on steel bunks ASAP, don't you think ?

Who today trusts either wall street, banking institutions, or insurance companies?

[munki]

01:34 AM on 02/07/2010

BOA investor's relations NEVER responded to my inquiries last year...

I have some of my retirement funds invested in BOA... what a J e @ K

[mrjames1]

05:31 AM on 02/06/2010

I am being completely serious- does he not look exactly like one of the aliens from the John Carpenter/ Rowdy Roddy Piper movie 'They Live!' ?

http://www.youtube.com/watch?v=aYJIIPs-5rQ

Watch the first 5 minutes, and see if its not exactly what's happening today (well, with the aliens representing the elite)

[Kevin Hirth]

11:17 AM on 02/06/2010

It's more shocking that the jerks are human, honestly

[Kache]

07:52 PM on 02/05/2010

In the Middle East they drag the bodies of their enemies through the streets. Ken Lewis deserves the same, and I do not mean figuratively.

[martin2]

05:46 PM on 02/05/2010

This robbery of the middle class was commited by Corrupt Bankers. Punishing them is way over due.
If we do not jail them they will do it again.

[mrjames1]

05:26 PM on 02/05/2010

Nice suit and tie, kenny. fits perfectly.

Here's a fun experiment for readers, easy to do:

Tomorrow as you go through your day, take notice of each and every person you see that wears a tie, bow ties included. Especially those on tv. As you see each, think if you would trust them with your money, or with your kids, or at all. Or to make it easy, just think 'Is this person a D*bag?' See if more than 10% get a 'passing' grade.

As a bonus, see if the more tie wearers in one place together means an increase in cri/me, ab/use, or stupi/dity. Just sayin'

[klucker]

02:36 PM on 02/05/2010

I hope this leads to a parade of these sobs going to jail, including Paulson and Geitner.

[Dana Durant]

01:26 PM on 02/05/2010

Jail the heads of B of A especially Lewis!

[Wendy Davis]

12:55 PM on 02/05/2010

Finally. We have a hero.