April 23, 2009
TRANSPARENCY: Lewis Testifies U.S. Urged Silence on Deal. “Under normal circumstances, banks must alert their shareholders of any materially significant financial hits. But these weren’t normal times: Late last year, Wall Street was crumbling and BofA faced intense government pressure to buy Merrill to keep the crisis from spreading. Disclosing losses at Merrill — which eventually totaled $15.84 billion for the fourth quarter — could have given BofA’s shareholders an opportunity to stop the deal and let Merrill collapse instead.” I’m seeing a lot of potential litigation and prosecution as this bailout thing unravels. Government (and corporate) lawyers and officials will no doubt protest that they were doing what the country wanted in the face of an unprecedented crisis, but we’ve seen how well that argument plays once the crisis is over . . . .
UPDATE: The Tony Soprano perspective.