Experience should teach us wisdom. Most of the difficulties our
Government now encounters and most of the dangers which impend over our
Union have sprung from an abandonment of the legitimate objects of
Government by our national legislation, and the adoption of such
principles as are embodied in this act. Many of our rich men have not been
content with equal protection and equal benefits, but have besought us to
make them richer by act of Congress. By attempting to gratify their
desires we have in the results of our legislation arrayed section against
section, interest against interest, and man against man, in a fearful
commotion which threatens to shake the foundations of our Union. It is
time to pause in our career to review our principles, and if possible
revive that devoted patriotism and spirit of compromise which
distinguished the sages of the Revolution and the fathers of our Union. If
we can not at once, in justice to interests vested under improvident
legislation, make our Government what it ought to be, we can at least take
a stand against all new grants of monopolies and exclusive privileges,
against any prostitution of our Government to the advancement of the few
at the expense of the many, and in favor of compromise and gradual reform
in our code of laws and system of political economy." Andrew Jackson
"Now listen, you rich people, weep and wail because of the misery that is coming upon you. 2 Your wealth has rotted, and moths have eaten your clothes. 3 Your gold and silver are corroded. Their corrosion will testify against you and eat your flesh like fire. You have hoarded wealth in the last days." - James 5:1-3

Sunday, February 7, 2010

Bank of America bosses charged with fraud

http://www.guardian.co.uk/business/2010/feb/05/bank-america-fraud-charges

Guardian
Fri, 05 Feb 2010 22:47 EST

New York attorney general files civil charges against the bank and its former chief executive, Ken Lewis, over last year's acquisition of Merrill Lynch

Bank of America and two of its former bosses have been charged with fraud for allegedly misleading shareholders during the takeover of Merrill Lynch.

The New York attorney general's office said last night it had filed civil charges against the bank and its former chief executive, Ken Lewis, claiming the bank misled investors about Merrill Lynch before it acquired the Wall Street bank in early 2009. Civil charges were also being filed against Joe Price, the bank's former chief financial officer.

Bank of America has been accused of failing to properly disclose losses at Merrill and bonuses paid to investment bank employees before the deal closed. Attorney general Andrew Cuomo called Bank of America's actions "egregious and reprehensible" in deceiving not only shareholders but also the federal government.

The bank received an additional $20bn (£12.7bn) in government bailout funds in January 2009 to help offset losses it absorbed as part of the Merrill Lynch acquisition. In December, Bank of America repaid the $20bn, plus the initial $25bn it received in government bailout money.

Lewis stepped down as chief executive on 31 December after almost a year of strife that followed the bank's purchase of Merrill Lynch.

Bank of America was quick to rebuff the accusations and said that the company and its executives would vigorously defend themselves against the attorney general's charges.

Spokesman Robert Stickler highlighted the fact that the Securities and Exchange Commission (SEC), the US financial regulator, had reached a settlement to resolve separate federal charges it brought against the bank.

"We are disappointed and find it regrettable that the NYAG has chosen to file these charges, which we believe are totally without merit," he said.

"The evidence demonstrates that Bank of America and its executives, including Ken Lewis and Joe Price, at all times acted in good faith and consistent with their legal and fiduciary obligations," Stickler added. "In fact, the SEC had access to the same evidence as the NYAG and concluded that there was no basis to enter either a charge of fraud or to charge individuals."

Bank of America agreed to pay $150m to shareholders to settle the SEC charges. The agreement must still be approved by US district judge Jed Rakoff.

In September, the bank and the government agreed to a $33m settlement only to have Rakoff reject the agreement. He called the first deal a breach of "justice and morality" and ordered the case to go to trial.

A hearing about the new settlement is scheduled for Monday afternoon.
Posted by at 2:48 AM

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