Former Bank of America CEO Ken Lewis Sued by NY AG for Fraud
Good to see proper investigations are to taking place after this massive financial fraud that was bought to bear on people across the globe. In this case they are looking into the $16 billion dollars in losses that Merrill allegedly knew about when it was being acquired by BofA after the failure of Lehman Brothers. Being that the losses were that large and the amount of bonuses (in the billions) that were paid as part of the deal, rightfully there are serious questions that need to asked and accounted for. There are more skeletons buried on this so we need to keep looking until the daylight shines on them all.
Bloomberg - Former Bank of America Corp. Chief Executive Officer Kenneth Lewis was sued by New York Attorney General Andrew Cuomo for defrauding investors and the government when buying Merrill Lynch & Co. The bank agreed to pay $150 million to settle a related lawsuit by U.S. regulators.
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Bank of America Posts Loss of $5.2 Billion After Firm Repays Bailout
The market sold off strong today on 3 big banks (Wells, Morgan and BofA) all reporting losses and increasing of loan loss reserves. This throws a wrench in the whole recovery picture and brings uncertainty into the market which creates volatility. Goldman Sachs reports tomorrow and that will be very important, if they post huge losses then it will weigh on the markets and we could see the real correction everyone has been talking about coming true.
Bank of America Corp., the largest U.S. lender, posted a quarterly loss and its first full-year deficit in more than two decades, driven by the cost of repaying U.S. bailout money and defaults on consumer loans.
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Bank of America’s Next CEO May Be Based in New York City
This is good news that they are looking to have their banking operations headed from NYC where many still see it as the financial center of the world. Charlotte is suitable for handling overall operations but with trading and other financial product units becoming a larger portion of major banks revenue streams, it is very logical to have them handle these operations from a major point of contact with other players.
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Bank of America CEO Ken Lewis to Step Down at End of 2009
No surprise on this announcement. Currently, two lawsuits have been filed against the national bank for the Merrill Lynch acquisition that included bonuses that have been alleged to “not” have been disclosed properly to shareholders and possibly, bank regulators. Ken Lewis has really been in the hot seat since this whole financial crisis began, starting with their purchase of troubled home mortgage lender Countrywide.
It is my opinion we will see more shakeouts of top management at more banks as these deals and losses get more focus and the facts come to light. Maybe this will be the first step for Bank of America to move forward and get back to prudent banking practices.
Bloomberg, New York - Bank of America Corp. Chief Executive Officer Kenneth D. Lewis, his credibility battered by the Merrill Lynch & Co. takeover, plans to step down at the end of this year. No successor was named for Lewis, who will also retire as a director, according to a statement today from Bank of America, the biggest U.S. lender by assets and deposits. The resignation ends Lewis’s 40-year career at the Charlotte, North Carolina- based company, including the last eight as CEO.
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Bank of America Wins Order on $1 Billion in Colonial Bank Assets
Bloomberg, New York - Bank of America Corp. won a restraining order barring Colonial Bank, the Alabama lender under federal criminal investigation, from selling or otherwise disposing of $1 billion in cash and loans held by Colonial.
Colonial, based in Orlando, Florida, said last week it may be placed into receivership with the Federal Deposit Insurance Corp., after a planned Aug. 10 meeting with the Alabama State Banking Board. Details of the meeting weren’t disclosed.
U.S. District Judge Adalberto Jordan in Miami issued the order after Bank of America sued Colonial yesterday in Miami, claiming Colonial is holding the cash and loans as a custodian for Ocala Funding Inc. The order notes that the suit relates to more than 6,000 mortgages worth more than $1 billion.
“To the extent that the interests of the public are implicated in this case, they weigh in favor of requiring Colonial to honor its contractual obligations and avoiding what would amount to a $1 billion heist,” the judge said in an order posted online today.
Ocala is a commercial-paper vehicle sponsored by Taylor, Bean & Whitaker Mortgage Corp., the 12th-largest U.S. home lender, which received funding from Colonial. The commercial paper, or short-term IOUs, was backed by residential mortgages.
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Federal Reserve Possibly Delayed Merrill Lynch Loss Disclosures According to Internal Email
This just shows more of the opaqueness in our U.S. financial system. When we are looking to gain back trust and confidence, these types of findings are counter-productive but needed to put light on the issue of transparency and doing what is right now what is politically convenient. We still do not know where $2 trillion in loan agreements or where most the money from A.I.G went. These are important questions that should be asked and answered no matter how damaging it is. We have totally bailout out and propped up a bunch of actors that have been liquidated and sold to the highest bidder. Once the truth is known, then and only then will we have the information in hand to make the hard choices and put in place or enforce rules and regulations that will protect the investor and punish the overly greedy.
News (Bloomberg):
House Republican staffers said the Federal Reserve tried to control the timing of disclosures of rising losses at Merrill Lynch & Co. in the weeks leading up to its takeover by Bank of America Corp., according to a memo obtained by Bloomberg.
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Bank of America raises $13.5 billion thru stock sale
Gosh I would like to know “who” or “whom” made those stock purchases. Well it is good that they are raising that capital required to keep the proper reserve ratio. For some reason I believe that those purchases were “sponsored” in some way, I can’t see with all this uncertainty, private investors would make such large purchases while the banks still have undisclosed assets / liabilities on their balance-sheet and they still have TARP money and stock warrants as well. Very interesting.
News (Forbes):
Bank of America Corp. said Tuesday that in less than two weeks it has raised $13.47 billion through the sale of 1.25 billion shares at an average price of $10.77 each.
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