Former Bank of America CEO Ken Lewis Charged With Fraud; Its Only A Start

By: Mike Shedlock | Thu, Feb 4, 2010
Print Email

On April 24, I wrote Let the Criminal Indictments Begin: Paulson, Bernanke, Lewis.

At long last we have our first major indictment. You will be pleased to read Ex-BofA chief Lewis charged with fraud.

New York Attorney General Andrew Cuomo said Thursday it was bringing civil charges against senior Bank of America executives, including former company CEO Ken Lewis, for their role in the company's controversial purchase of Merrill Lynch.

Cuomo's office, which has been aggressively pursuing an investigation into the merger and subsequent bonuses paid to former Merrill employees, said it was charging Lewis and Bank of America's former chief financial officer Joe Price with fraud.

The lawsuit contends that the bank's management team understated the losses at Merrill in order to get shareholders to approve the deal, then subsequently overstated the firm's willingness to terminate the merger to regulators weeks later in order to get $20 billion of additional aid from the federal government.

"Bank of America and its officials defrauded the government and the taxpayers at a very difficult and sensitive time," Cuomo said at a press conference Thursday, joined by federal bailout cop Neil Barofsky, whose office aided in the investigation. "I believe that Bank of America officials exploited this fear."

One Down, Many More To Go

Geithner, Paulson, and Bernanke all deserve to be indicted as well. Paulson and Geithner are easier targets, Paulson even admitted coercion.

Here Is The List

April 24, 2009: Let the Criminal Indictments Begin: Paulson, Bernanke, Lewis

June 26, 2009: Bernanke Suffers From Selective Memory Loss; Paulson Calls Bank of America "Turd in the Punchbowl"

July 17, 2009: Paulson Admits Coercion; Where are the Indictments?

October 20, 2009: Bernanke Guilty of Coercion and Market Manipulation

January 07, 2010: Time To Indict Geithner For Securities Fraud

January 26, 2010: Questions Geithner Cannot Escape

January 28, 2010: Secret Deals Involving No One; AIG Coverup Conspiracy Unravels

Those are the big boys who need to be brought down to earth, preferably in jail where they can ponder the meaning of greed and arrogance.

Many others deserve the same fate. In case you missed it please consider

Inquiring minds note that Neil Barofsky, special inspector for the Troubled Asset Relief Program (TARP), claims Bailouts created more risk in system.

Neil Barofsky Says Handcuffs Are Coming

Barofsky Has 77 Active Fraud Cases

Please consider TARP's Barofsky Increased Probes 41 Percent in Fourth Quarter

Investigations of misconduct related to the $700 billion Troubled Asset Relief Program expanded in the fourth quarter as the U.S. rescue fund's watchdog increased opened cases by 41 percent.

Special Inspector General Neil Barofsky began 25 criminal and civil probes in the quarter, and had 77 total active cases, according to a quarterly report to Congress published yesterday.

Examiners are looking into possible wrongdoing linked to the financial-industry bailout, including insider trading, accounting violations, mortgage fraud, obstruction of justice and money laundering, according to the report. Barofsky didn't identify the targets of pending investigations, though details of some cases have emerged separately.

Barofsky confirmed last week he is probing whether the Federal Reserve Bank of New York improperly limited release of information about payments to American International Group Inc.'s counterparties when the insurer was rescued.

It's time to see the New York Fed and Geithner as well, brought to their knees.

 


 

Mike Shedlock

Author: Mike Shedlock

Mike Shedlock / Mish
Mish Talk

Mike Shedlock

Michael "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Visit http://www.sitkapacific.com/ to learn more about wealth management for investors seeking strong performance with low volatility.

Copyright © 2005-2016 Mike Shedlock

All Images, XHTML Renderings, and Source Code Copyright © Safehaven.com