Bank of America Responds to New York Attorney General Cuomo's Investigation of Alleged Securities Violations; Cuomo Subpoenas Board Members
Bank of America Corp. has responded to New York Attorney General Cuomo's allegations that the bank failed to inform shareholders of material information related to its takeover of Merrill Lynch, according to a report in the American Banker. In a September 8 letter to the bank, Cuomo's office also accused the bank of "indiscriminate invocation of the attorney-client privilege" and "hindering efforts to determine which company officers potentially should be charged with securities violations." In a response from its outside counsel, Bank of America stated that "the basic premise of the letter [raising the allegations] is simply wrong" and that the allegations about what the bank told investors were “spurious,” according to a report by the Charlotte Observer. Bank of America had not "sought to take unfair advantage of the assertion of the privilege by hiding information from [the AG's] office or anyone else," the letter continued.
The September 8 letter from Cuomo's office identified several areas under investigating, including alleged wrong-doing by senior bank officials related to the release of a merger proxy document that did not identify $3.6 billion in Merrill Lynch bonuses, nor disclose Merrill's forecasted losses or a $2 billion goodwill charge. In response, the bank stated that the merger proxy "did not contain any false or misleading statements," and the other matters alleged by the AG's office had been properly reconciled and reported as required by relevant laws.
On Wednesday, September 16, Bloomberg reported that the New York Attorney General had subpoenaed five members of Bank of America's board of directors amid his probe into the bank’s purchase of Merrill Lynch.
