Posted on Fri, Apr. 24, 2009
last updated: March 15, 2013 11:58:30 AM
Amid deep concerns about the stability of the U.S. financial system and Bank of America, then-Treasury Secretary Henry Paulson in December threatened to oust the bank's management and board in order to force it to buy Merrill Lynch, according to documents released Thursday.
The testimony released by the New York Attorney General also says Bank of America chief executive Ken Lewis kept publicly silent on the extent of Merrill's problems because Paulson told him the government didn't want any disclosure.
But Paulson and the Federal Reserve released statements Thursday saying they didn't tell Bank of America what information it should reveal to shareholders.
The new revelations come with Lewis' job on the line. Shareholder activists are working against his re-election to the bank's board at next week's annual shareholder meeting in Charlotte.
If they're successful, it could undermine his ability to remain CEO. The bank's critics also call for a broader shake-up of the board, citing lack of disclosure about the Merrill deal as a key failing.
Whether the latest account of the government's role in the deal will help or hurt Lewis remains to be seen. The documents show Lewis under intense pressure to close the Merrill purchase, despite his desire to back out.
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