NY attorney general files civil fraud lawsuit against BofA, Lewis
The New York Attorney General's office has filed fraud charges against Bank of America and its former Chief Executive Ken Lewis and former CFO Joe Price over the bank's acquisition of Merrill Lynch. WFAE's Simone Orendain reports: In the lawsuit, New York Attorney General Andrew Cuomo says Bank of America misled shareholders when it didn't tell them about Merrill Lynch's mounting losses before they voted on the deal in December of 2008. Furthermore, the suit says bank management manipulated the federal government into giving it $25 billion in bail out money to complete the deal. Cuomo says this was a major fraud against tax payers. The shareholder group CtW alleged some of the same points when it called for then CEO Ken Lewis' ouster at the bank's annual shareholder's meeting last spring. CtW investment researcher Mike Garland says the lawsuit is validating. "I don't think there's any office that knows the facts better than the Attorney General. I know investors relied on the information he put out on the public domain," he says. B of A spokesman Bob Stickler says the charges are completely without merit and the company and the two executives will "vigorously defend" themselves. On the same day these charges were filed, the Securities and Exchange Commission announced Bank of America has agreed to pay a $150 million settlement over the same disclosure issues tied to the acquisition. US District Judge Jed Rakoff is scheduled to hear from both sides on Monday before he decides whether to approve the settlement.