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BoA boss 'told to keep quiet over Merrill'
Evening Standard23.04.09
THE boss of Bank of America (BoA) has admitted he broke securities laws by failing to disclose the mounting losses at bailed out Merrill Lynch - but said he was told to keep quiet by none other than the Treasury Secretary Hank Paulson and Fed chairman Ben Bernanke.
Testimony given by BoA chief executive Ken Lewis to New York's attorney general reveals he was told by Paulson and Bernanke not to discuss the deepening financial difficulties at Merrill.
BoA's acquisition of Merrill, which was subsequently found to have racked up losses of $21 billion (£14.4 billion) meant BoA had to go like much of the rest of Wall Street to the White House for a bail out.
Normal stockmarket reporting rules demand that companies reveal material financial information as soon as they become aware of it.
When asked by attorney general lawyers why he had not reported Merrill's problems Lewis said: he was told by Paulson and Bernanke that disclosure of the mounting problems would "impose a big risk to the US financial system".
