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April 23, 2009
One of the most disturbing letters on the financial crisis I have read so far
And I expect more. This is Cuomo’s letter to the Fed/Treasury notifying them of irregularities that they discovered in relation to the BofA/Merrill Lynch shotgun merger. Read this and you will realize that a couple bureaucrats in Washington are forcing private business to do non-economic things and actually violating a bunch of SEC regulations in the process. And hiding what they are doing from taxpayers and shareholders (who are getting screwed). This is very disturbing. Some excerpts below.
Despite the fact that Bank of America had determined that Merrill Lynch's financial condition was so grave that it justified termination of the deal pursuant to the MAC clause, Bank of America did not publicly disclose Merrill Lynch's devastating losses or the impact it would have on the merger. Nor did Bank of America disclose that it had been prepared to invoke the MAC clause and would have done so but for the intervention of the Treasury Department and the Federal Reserve.
Lewis testified that the question of disclosure was not up to him and that his decision not to disclose was based on direction from Paulson and Bernanke: "I was instructed that 'We do not want a public disclosure. '"
Posted by Martin at April 23, 2009 11:54 AM
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