2010年2月8日月曜日

ケネス・ルイス 詐欺で訴追

ケネス・ルイスが、詐欺で訴追された。
 米NY州司法当局は、詐欺の疑いでバンカメのケネス・ルイス前CEOらを
訴追したと発表した。2008年秋に経営危機に直面したメリルリンチの買収
に際して、故意に巨額損失などの情報を隠し、株主と公的資金を投入した
政府をだました、としている。

クオモは、90ページからなる主張を提出したようだ。
160億ドルを上回る損失を抱えていることを把握していたのに、株主に
買収を承認させるため株主総会前に開示しなかった。また200億ドルに
達する公的資金の獲得に向けて政府に不正確な情報を伝えたとのこと。

公的支援された資金を使って、メリル元社員に一時金を支払い、自分の
退職金は1億2600万ドルと一部の人のアイドルになっているようだ。
満足に三食食べられず、住む家も失い、失業率10%の米国民なのに、
このような人をアイドルとみる感覚がわからない。

メリル合併で財務省やFRBからの圧力を暴露したため、司法長官が報復
したのかもしれない。


ケネス・ルイス 退職金112億円
高額報酬の果て
バーナンキ AIGに憤慨
リーマン破綻、メリル合弁、次はAIGか


Bank of America charged with fraud

---前バンカメCEOらを詐欺で訴追 メリル買収で政府だます---
2010.2.5 11:25
http://sankei.jp.msn.com/economy/finance/100205/fnc1002051126008-n1.htm

 米ニューヨーク州司法当局は4日、詐欺の疑いで金融大手バンク・オブ・アメリカ(バンカメ)のケネス・ルイス前最高経営責任者(CEO)らを訴追したと発表した。2008年秋に経営危機に直面した証券大手メリルリンチの買収に際して、故意に巨額損失などの情報を隠し、株主と公的資金を投入した政府をだました、としている。
 発表によると、当時CEOだったルイス氏らはメリルが160億ドル(約1兆4千億円)を上回る損失を抱えていることを把握していたのに、株主に買収を承認させるため08年12月の株主総会前に開示しなかった。また200億ドルに達する公的資金の獲得に向けて政府に不正確な情報を伝えたなどとしている。(共同)


---米NY州司法長官、メリルの損失開示めぐりバンカメを提訴---
2010年 02月 5日 06:24 JST
http://jp.reuters.com/article/businessNews/idJPJAPAN-13727420100204

[ニューヨーク 4日 ロイター] 米ニューヨーク州のクオモ司法長官は4日、メリルリンチ買収をめぐり損失を開示しなかったとして、バンク・オブ・アメリカ(バンカメ)(BAC.N: 株価, 企業情報, レポート)を提訴したと発表した。
 同司法長官によると、バンカメはメリルリンチ買収をめぐる株主投票の前に、同社が巨額の損失を抱えていることを意図的に開示しなかった。
 ルイス前最高経営責任者(CEO)とプライス前最高財務責任者(CFO)も提訴した。モイニハン現CEOは調査の対象外としている。
 また、米証券取引委員会(SEC)は、メリルリンチ買収をめぐる2件の訴訟で、1億5000万ドルの罰金支払いおよび情報開示と企業統治の改善でバンカメが和解したことを明らかにした。
 バンカメの広報担当者はクオモ司法長官の提訴について「遺憾だ」とし、「バンカメおよびルイス、プライス両氏を含む同行の経営陣が常に誠実に振る舞い、法的義務に忠実だったことを示す証拠がある」と述べた。


---BofA’s Lewis Faces Squeeze by Cuomo Over Role in Credit Crunch---
February 05, 2010, 03:29 AM EST
By David Mildenberg and Karen Freifeld
http://www.businessweek.com/news/2010-02-05/bofa-s-lewis-faces-squeeze-by-cuomo-over-role-in-credit-crunch.html

Feb. 5 (Bloomberg) -- Kenneth D. Lewis, who presided over two bailouts at Bank of America Corp., now stands as the only chief among the biggest U.S. lenders who’s officially accused of wrongdoing during the financial industry’s near collapse.

New York Attorney General Andrew Cuomo filed a civil fraud case yesterday against Lewis, the bank’s chief executive officer until December, ex-Chief Financial Officer Joe Price and the company itself. They allegedly deceived investors and taxpayers in 2008 by not disclosing losses at Merrill Lynch & Co. before shareholders voted on the firm’s pending takeover, and using those losses to extract more bailout funds from U.S. regulators, Cuomo said during a news conference and in court filings.

“Ken Lewis is the poster child -- or scapegoat -- for the excesses of the past,” said Mark Williams, executive-in- residence at Boston University and a former bank examiner. While Lewis didn’t push as deeply as some rivals into mortgage-backed securities, “he made bad strategic decisions” by overpaying for Merrill Lynch and subprime home lender Countrywide Financial Corp., Williams said.

Lewis, 62, retired after criticism of the Merrill takeover, joining more than half a dozen peers who left or lost their jobs amid $1.7 trillion of losses tied to the global financial crisis. Among them were Citigroup Inc.’s Charles O. Prince, Merrill Lynch & Co.’s E. Stanley O’Neal, Lehman Brothers Holdings Inc.’s Richard S. Fuld and Wachovia Corp.’s G. Kennedy Thompson, none of whom faces legal action like Cuomo’s.

‘Misguided’ Lawsuit

Lawyers for Lewis, Price and Charlotte, North Carolina- based Bank of America said Cuomo erred in bringing the 86-page complaint. New York’s action is “badly misguided,” said Mary Jo White, the former federal prosecutor who is defending Lewis, in a statement. “There is not a shred of objective evidence to support the allegations.”

Industry CEOs previously singled out by enforcement officials included Angelo Mozilo, the former head of Countrywide. The U.S. Securities and Exchange Commission accused Mozilo of civil fraud in June 2009, saying he publicly reassured investors about Countrywide’s loans while expressing doubts internally about their quality, and selling about $140 million of shares.

Mozilo has said he didn’t do anything improper, and the case is pending. Bank of America, ranked first in the U.S. by assets and deposits, bought Countrywide in 2008, and Mozilo didn’t stay with the combined firm.

SEC Case

Cuomo moved against Bank of America as the SEC announced a separate settlement of claims that the bank misled shareholders about bonuses and losses at New York-based Merrill. The bank agreed to pay $150 million and strengthen corporate governance; no executives were cited individually.

Cuomo’s case concerns events leading up to the January 2009 purchase of Merrill Lynch, a deal that Lewis crafted in September 2008 as Lehman Brothers collapsed and regulators were trying to save the rest of the financial system.

According to Cuomo’s complaint, the bank failed to tell its own stockholders that losses at Merrill Lynch were piling up before they voted to approve the deal in December, and didn’t disclose plans for the brokerage to pay $3.57 billion in bonuses covering “the worst year in Merrill’s history.”

The bank then pointed to those losses, which ultimately surpassed $15 billion for the fourth quarter of 2008, and “manipulated” federal regulators into providing bailout funds, the complaint said. Lewis and Price did this with “an empty threat to terminate the merger,” citing a clause that allowed the deal to be aborted if there were so-called material adverse changes, the complaint said.

MAC Attack

Lewis, Price, 48, and Brian Moynihan, 50, who has since become CEO, “calculated that if they threatened to call a MAC to get out of the deal, the federal government would counter with more taxpayer funds out of a concern for the greater economy,” the complaint said. The bank knew it probably had no legal grounds to invoke the clause, according to the complaint.

Moynihan, who succeeded Lewis as CEO on Jan. 1, isn’t under investigation in Cuomo’s case and has been “candid” with the attorney general’s office, according to David Markowitz, Cuomo’s special deputy for investor protection. Moynihan was the bank’s general counsel in December 2008 when it negotiated with U.S. officials for $20 billion of bailout funds. Price has since been named head of the consumer unit at Bank of America.

Bank of America spokesman Robert Stickler said Cuomo’s office “has no intention” of targeting Moynihan. “They believe he was not complicit in their scenario, which is based on snippets of facts taken out of context and at times embellished,” Stickler said.

Loss Disclosure

The complaint said Bank of America was advised to tell investors about the losses as early as November by Timothy Mayopoulos, its original general counsel, as well as outside law firm Wachtell, Lipton, Rosen and Katz. Deloitte and Touche, Merrill’s auditing firm, also suggested disclosure, according to the filing.

Price didn’t tell Mayopoulos the full extent of Merrill’s losses as they grew, and after Mayopoulos unsuccessfully sought to speak to Price about the increases in December, he was fired and replaced by Moynihan, the complaint said.

Corporate Treasurer Jeffrey Brown also “urged Price to make a disclosure to no avail,” the complaint said. “When Price dismissed the Treasurer’s advice, the Treasurer warned, ‘I didn’t want to be talking [about Merrill’s losses] through a glass wall over a telephone.’ ” That’s the method typically employed during visits to prison.

“Astonishingly, Price seemed to have forgotten this dramatic exchange,” according to the lawsuit.

Brown later left the bank and was named corporate treasurer in 2009 at GMAC Inc., the auto and home lender.

Cuomo’s allegation that Price improperly withheld information is “utterly false,” according to a statement from Price’s lawyers at Baker Botts LLP in Washington. Cuomo’s case is “flatly contrary to the evidence and contrary to the conclusions of the Securities and Exchange Commission based on the same evidence,” the statement said.

Cuomo based his civil case on New York’s Martin Act, a securities law that permits civil and criminal penalties, and said the investigation was aided by Neil Barofsky, special inspector general for the Troubled Asset Relief Program, which dispensed federal bailout money.

“Ken Lewis doesn’t live in New York, and if you are running for office like Mr. Cuomo, picking on a New Yorker such as Dick Fuld or someone else could be much more difficult,” said Ray Groth, adjunct professor at Duke University’s business school and a former First Boston Corp. investment banker. “Ken is very low on the schmooze factor and politicians love to be schmoozed, flattered and catered to.”

Bank of America fell 78 cents, or 5 percent, to $14.75 at 4 p.m. in New York Stock Exchange composite trading. They’ve tripled in the past 12 months.

Merger’s Aftermath

Analysts Richard Bove of Rochdale Securities Inc. and Betsy Graseck of Morgan Stanley have praised the Merrill acquisition for diversifying Bank of America’s income and insulating the company from losses on consumer loans. Mark Calabria, director of financial regulatory studies at the Cato Institute in Washington, said Cuomo’s action contradicts statements from the Federal Reserve and Treasury Department.

“There is an argument for saying investors were misled, but all evidence indicates the Fed and Treasury strong-armed Mr. Lewis into not saying anything,” Calabria said.

The separate SEC settlement still has to be approved by U.S. District Court Judge Jed Rakoff. Last year, Rakoff called the SEC’s initial settlement, which focused on the bank’s bonus disclosures, neither fair nor reasonable and questioned why the bank’s executives and lawyers weren’t sued. The agency said it lacked evidence to bring claims against specific individuals.


--With assistance from Joshua Gallu in Washington and Margaret Popper in New York. Editors: Rick Green, Alec McCabe


---Cuomo Sues Bank of America, Even as It Settles With S.E.C. ---
By LOUISE STORY
Published: February 4, 2010
http://www.nytimes.com/2010/02/05/business/05cuomo.html

The legal drama surrounding the controversial takeover of Merrill Lynch by Bank of America, one of the pivotal moments of the financial crisis, took a fresh turn on Thursday as the attorney general of New York leveled civil fraud charges against Kenneth D. Lewis, the former Bank of America chief who masterminded the deal.

But no sooner did that news break than the Securities and Exchange Commission announced that it had struck a new, $150 million deal with Bank of America to settle its own cases involving the merger. Moments later, North Carolina’s attorney general announced that his office also had reached a settlement.

The developments open several new fronts in one of the most closely watched legal battles in American finance - one that now pits Wall Street enforcers against each other.

Andrew M. Cuomo, New York’s attorney general, is upping the ante in a match against Mr. Lewis and Bank of America. The S.E.C., however, is eager to put the matter to rest after suffering embarrassing setbacks in its case. Bank of America insists its executives did no wrong, although it, too, wants to put the case behind it.

Mr. Cuomo, who is expected to run for governor of New York and has been investigating the case for a year, is riding the wave of popular anger directed at big banks, which have stunned many Americans with their quick recovery from the financial collapse. Much like the S.E.C., his office claims that Bank of America essentially hid from its shareholders billions of dollars in losses at Merrill, which later forced Bank of America to seek a second bailout from Washington.

But unlike the S.E.C., which has focused broadly on Bank of America itself, Mr. Cuomo has focused instead on Mr. Lewis and another executive, Joe Price, who was Bank of America’s chief financial officer when the Merrill deal was struck. The fallout from the star-crossed deal eventually drove Mr. Lewis from his post as chief executive. Mr. Price remains at the bank, though he stepped down from the chief financial officer job this year.

Lawyers for both Mr. Lewis and Mr. Price said the charges were without merit. The bank is paying both executives’ legal fees.

“Mr. Lewis has been unfairly vilified by the political search for accountability for the financial meltdown,” said Mary Jo White, a lawyer at Debevoise & Plimpton who represents Mr. Lewis.

Mr. Cuomo made some new claims in a 90-page complaint filed on Thursday. The complaint painted Mr. Price as the central figure in the case. Mr. Cuomo accused Mr. Price of hiding the extent of Merrill’s losses from Bank of America’s own lawyers when seeking advice on whether to update shareholders about the deepening pool of red ink.

One Bank of America executive commented in a note about the losses that read “read and weep,” the complaint says.

Mr. Cuomo is wielding a powerful weapon in his case. Under New York State’s Martin Act, the attorney general has broad powers in securities enforcement.

The S.E.C., meantime, is seeking to bring its long, troubled investigation to an end. But its new settlement is subject to approval by United States District Judge Jed S. Rakoff - the same judge who rejected a previous $33 million accord as woefully low and, in blistering terms, accused the S.E.C. of going too easy on Bank of America and its executives.

Judge Rakoff will hold a hearing on the new settlement on Monday.

Legal experts said that many controversial issues stemming from the financial crisis - rich bonuses for bankers, allegations of government fraud, potential harm to investors - come together in the Merrill-Bank of America case.

Lawmakers in Congress used the merger as an opportunity to interrogate the leaders of the Federal Reserve and Henry M. Paulson Jr., who was Treasury secretary when the merger was struck.

“This transaction had nothing to do with causing the crisis; this transaction helped solve it,” said Steven Thel, a professor at Fordham University School of Law. “But everything that people think has gone wrong in the last few years is tied up in this transaction. People are upset because they see this as the tawdry side of the bailout. It shows the qualities of Wall Street.”

Bank of America directors pressed in recent months to settle both cases. But Mr. Cuomo was unwilling to settle for a small sum and wanted Mr. Lewis and Mr. Price held accountable. The bank seized on the S.E.C.’s decision not to charge individuals as evidence that Mr. Cuomo’s case was without merits.

“The S.E.C. and the attorney general’s office looked at the same evidence and the S.E.C. concluded there was no reason to charge people,” said Bob Stickler, a spokesman for the bank. “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.”

The S.E.C. said it would distribute the fine it was seeking from Bank of America to shareholders who owned Bank of America stock at the time of the merger. Former Merrill shareholders, in other words, will effectively pay the fine. The settlement also includes some corporate governance reforms, which have appealed to Judge Rakoff in past settlements.

If the judge rejects the settlement, the S.E.C. and the bank are scheduled to try the case beginning March 1.

People following Mr. Cuomo’s case said that the attorney general’s showdown with Bank of America would probably drag on for some time.

“This is certainly not the end, and it’s more likely the beginning of a long, drawn-out death march,” said Michael W. Robinson, a senior vice president with Levick Strategic Communications. “Attorney General Cuomo has found an issue that neatly ties together populist anger and a sense of the malfeasance of bankers, who are not the most popular people these days.”

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