From the New York Times: Days before Bank of America shareholders approved the bank’s
$50 billion purchase of Merrill Lynch in December 2008, top bank executives
were advised that losses at the investment firm would most likely hammer the
combined companies’ earnings in the years to come. But shareholders were not
told about the looming losses, which would prompt a second taxpayer bailout of
$20 billion, leaving them instead to rely on rosier projections from the bank
that the deal would make money relatively soon after it was completed.
What Bank of America’s top executives, including its chief
executive then, Kenneth D. Lewis, knew about Merrill’s vast mortgage losses and
when they knew it emerged in court documents filed Sunday evening in a
shareholder lawsuit being heard in Federal District Court in Manhattan.
The disclosure, coming to light in private litigation, is
likely to reignite concerns that federal regulators and prosecutors have not
worked hard enough to hold key executives accountable for their actions during
the financial crisis....
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