By Heather Grossmann
DNAinfo Reporter/Producer
MANHATTAN — New York Attorney General Andrew Cuomo filed charges Thursday against Bank of America in what he called the “most impactful case” of his tenure at the AG’s office, saying the bank duped shareholders and the federal government during its merger with Merrill Lynch.
Cuomo’s office asserted that former Bank of America CEO Ken Lewis and former CFO Joseph Price intentionally hid Merrill Lynch’s huge losses from shareholders so the 2008 merger would be approved, and then turned around and demanded that the Feds give them billions of dollars in taxpayer money to make the merger — which they knew was flawed from the get go — work.
“This merger is a classic example of how the actions of our nation’s largest financial institutions led to the near-collapse of our financial system,” said Attorney General Cuomo.
“Bank of America, through its top management, engaged in a concerted effort to deceive shareholders and American taxpayers at large. This was an arrogant scheme hatched by the bank’s top executives who believed they could play by their own set of rules."
Cuomo, who is expected to run against Gov. David Paterson this year, said that the bank got $20 billion in TARP money as a result of what he called "securities fraud." He said that the bankers had enjoyed a ten year party and "the taxpayers were sent the bill."
The lawsuit was filed in New York State Supreme Court and seeks unspecified monies and injunctions from BOA, Lewis and Price.
The Securities and Exchange Commission is expected to announce a settlement with BOA today, which will require reforms of the bank and will not have an impact on Cuomo's case.
