Friday, April 24, 2009

Henry Paulson vs. Kenneth Lewis

According to an article in this morning's Washington Post (here), Henry Paulson may have "forced" Kenneth Lewis to (1) go forward with the Merrill Lynch acquisition, in spite of the huge Merrill losses that B. of A. had discovered, and (2) withhold any disclosure (about Merrill's losses) to B. of A. shareholders.

It sounds like Paulson is trying to pass the buck to Ben Bernanke, stating that Bernanke asked him to put-the-screws on Lewis and the B. of A. board. The article says that Paulson specifically threatened to remove Bank of America's management and force its board members to resign if they backed out of the Merrill deal.

215. Is this true?! If so, this seems like an even bigger deal than the government's decision to remove Rick Wagoner last month, since Paulson's action would have been in direct contravention of securities laws on required disclosures of "material information" to shareholders.

No comments:

Post a Comment