Civil Charges

Bring it on! Andrew Cuomo saa vihdoinkin jotain merkittävää aikaiseksi.

o BofA, Executives Face Civil Charges by Cuomo (WSJ)

New York Attorney General Andrew Cuomo filed civil securities fraud charges against former Bank of America CEO Kenneth Lewis and former Chief Financial Officer Joseph Price, alleging they decided not to disclose mounting losses at Merrill Lynch & Co. before getting shareholder approval to acquire the Wall Street firm.

Separately, the bank and the Securities and Exchange Commission reached a $150 million settlement on allegations of misleading investors during the Merrill deal. The settlement requires a judge's approval.

Shareholders approved the purchase on Dec. 5, 2008, not knowing that Merrill had accumulated more than $16 billion in "actual losses" for the fourth quarter of 2008, according to the attorney general. The bank didn't say anything about the mounting losses until the U.S. in January 2009 provided the bank with an additional $20 billion to absorb Merrill.

"We believe bank management understated the Merrill Lynch losses to shareholders to get shareholders to approve the deal then overstated their ability to terminate the agreement to get $20 billion from federal government," Mr. Cuomo said on a conference call.

After the shareholder vote, Bank of America executives went to U.S. officials and said they might back away from the purchase because the losses were greater than they expected. But Mr. Cuomo said Wednesday that "actual losses" were only $1.4 billion greater than at the time of the vote.

"That is just a fraud," he said.