April 24, 2009

FLASH: S&A calls for the arrest of BofA CEO Ken Lewis, former Tresury Secretary Hank Paulson and Fed Chairman Ben Bernank for securities fraud

1) Ken Lewis has just admitted blatant and documented securities fraud, with no gray area. This is now a fact as a result of Lewis' testimony to New York Attorney General Cuomo.

2) Hank Paulson has implicated himself in this fraud, and has essentially plead guilty to Cuomo's office (i.e. he said he ordered the code red)

3) Ben Bernanke has been fingered by Lewis along with Paulson as coercing documented securities fraud at BofA

4) All three should be picked up in their offices today and frog marched. Nobody, NOBODY, is above the law in America. Right?

Here's today's bombshell. And seriously, how much more does Obama need to NAME AN INDEPENDENT SPECIAL PROSECUTOR NOW!!!!

N.Y. attorney general says feds threatened bank CEO

Bank of America CEO Ken Lewis reportedly testified that Henry Paulson and Ben Bernanke would oust him and top management if the bank backed out of buying Merrill Lynch.

Associated Press

CHARLOTTE, N.C. -- New York's attorney general said Thursday that government officials pressured Bank of America CEO Ken Lewis to complete the bank's purchase of Merrill Lynch, threatening his job security.

A letter from New York State Attorney General Andrew Cuomo's office sent to Congressional leaders and federal regulators said Lewis testified in February that former Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke threatened to oust Bank of America's management if the bank tried to back out of buying Merrill Lynch.

The bank has repeatedly defended its acquisition amid revelations of huge losses at Merrill Lynch before completion of the deal.

''We believe we acted legally and appropriately with regard to the Merrill Lynch transaction,'' Bank of America spokesman Scott Silvestri told The Associated Press on Thursday.

Representatives from the Treasury Department had no immediate comment.

A spokeswoman for Sen. Chris Dodd, D-Conn., chairman of the Banking Committee, said Dodd spoke with Cuomo about what he called ''troubling findings,'' and will ``decide on next steps soon.''



keith said...

Here's the detail


Immediately after learning on December 14, 2008 of what Lewis described as the "staggering amount of deterioration" at Merrill Lynch, Lewis conferred with counsel to determine if Bank of America had grounds to rescind the merger agreement by using a clause that allowed Bank of America to exit the deal if a material adverse event ("MAC") occurred. After a series of internal consultations and consultations with counsel, on December 17, 2008, Lewis informed then-Treasury Secretary Henry Paulson that Bank of America was seriously considering invoking the MAC clause. Paulson asked Lewis to come to Washington that evening to discuss the matter.

At a meeting that evening Secretary Paulson, Federal Reserve Chairman Ben Bernanke, Lewis, Bank of America's CFO, and other officials discussed the issues surrounding invocation of the MAC clause by Bank of America. The Federal officials asked Bank of America not to invoke the MAC until there was further consultation. There were follow-up calls with various Treasury and Federal Reserve officials, including with Treasury Secretary Paulson and Chairman Bernanke. During those meetings, the federal government officials pressured Bank of America not to seek to rescind the merger agreement. We do not yet have a complete picture of the Federal Reserve's role in these matters because the Federal Reserve has invoked the bank examination privilege.

Bank of America's attempt to exit the merger came to a halt on December 21, 2008. That day, Lewis informed Secretary Paulson that Bank of America still wanted to exit the merger agreement. According to Lewis, Secretary Paulson then advised Lewis that, if Bank of America invoked the MAC, its management and Board would be replaced.In an interview with this Office, Secretary Paulson largely corroborated Lewis's account. On the issue of terminating management and the Board, Secretary Paulson indicated that he told Lewis that if Bank of America were to back out of the Merrill Lynch deal, the government either could or would remove the Board and management.

Secretary Paulson's threat swayed Lewis. According to Secretary Paulson, after he stated that the management and the Board could be removed, Lewis replied, "that makes it simple. Let's deescalate." Lewis admits that Secretary Paulson's threat changed his mind about invoking that MAC clause and terminating the deal.

Despite the fact that Bank of America had determined that Merrill Lynch's financial condition was so grave that it justified termination of the deal pursuant to the MAC clause, Bank of America did not publicly disclose Merrill Lynch's devastating losses or the impact it would have on the merger. Nor did Bank of America disclose that it had been prepared to invoke the MAC clause and would have done so but for the intervention of the Treasury Department and the Federal Reserve.

Anonymous said...

I suspect Bernanke and Paulson are untouchable. Ultimately they can claim all their actions were imperative in the interest of national security. Lewis will likely be ousted and will have to defend himself from lawsuits but he also receives protection under the umbrella of national security. The rest are just details.

vanilla ice said...

What Paulson did is a crystal clear example of an otherwise murky system of bailouts and outright handouts to the financial sector. Paulson, bitch Geither, and that bastard fuckhead Bernanke use their propaganda to manipulate the markets, like when they say they're injecting 'liquidity' into the banks. They say they're doing this for the greater good and to save us from a new depression. The public is left wondering what the hell did these guys just do, and what is 'liquidity.'

Is there any doubt now that the government is totally F'ing us to save the banks?

vanilla ice said...

Ken Lewis is guilty of other crimes, but in this case why is Cuomo going after Lewis? He was strongarmed into the deal by the other crooks. I could be wrong, but I remember at the time it was clear for an undisclosed reason that Paulson wanted the deal to happen. Lewis was 'convinced' by the treasury the merger was the best option.

keith said...

Cuomo is going after Paulson. He got Lewis to squeal pretty easy, admitting to a crime, and now he moves up the food chain.

This is serious and real. He has Paulson and Bernanke ordering a bank CEO to commit securities fraud.

That's big.

Now, where does the story go?

Mike H. said...

With Dodd at the helm this goes nowhere. Watch and learn, my boy.

Time for another suicidal hanging, can you guess who's next now? Hint: nobody who ever worked at Goldman Sachs.


Anonymous said...

I propose Turbo Tim Geithner, a truly honest man who will ensure an absolutely impartial non indictment.


Anonymous said...

Could a lot of this been avoided had the financial firms saved even a fraction of their big profits during the boom as reserves against their risky loans, instead of channeling such a high percent into compensation?

Anonymous said...

shouldn't cuomo be investigating himself.

casey said...

why are we wasteing time on this? It is a done deal move on.Don't you guys get it.

You are now wall streets little bitches.Go get some work done and pay some taxes.

borkafatty aka the pig said...

Now the story goes to Cuomo's house, where he is inexplicably found by his family hanging by his neck from the rafters in the garage with a bullet hole in his head and the gun in his hand.

While very suspicious, no evidence of wrongdoing will ultimately be found.

Anonymous said...

One nation under GOD > Goldman-Sachs.....

And more from the we don't need no stinking laws agenda....

...“Homeland Security Secretary Janet Napolitano stunned many listeners during an appearance on CNN when she asserted that illegal immigration is really not a crime,” reports Newsmax.com

Twilight Zone...........!

Anonymous said...


Too bad you are in the UK.. If we have had somebody like you advising the morons in Congre-Ass, we would be THE prosperous and buoyant nation ofthis planet.

How come you and these humble readers, could see this coming, so clearly and they couldn't?

Thank God I listened to you and did not buy anything I could not afford and was able to save for this economic chaos.

May God bless the USA forever!

Anonymous said...


Gimme Cheese.

honor amongst thieves said...

Paulson apparently fessed up to, trying to shift everything on Bernanke of course:


keith said...

This whole affair will need a "XXXGate" name soon.

Any ideas?


k.w. - Southern Ca. said...

What this country needs is a dose of truth ... and we *can* handle it.

Anonymous said...

Keithers ~ Your "Few Good Men" excerpt was superb. It encapsulates, perfectly, what is happening with the Fed, Treasury, and Bank of America. How do you do it? Good association on your part, my friend!

corrupt to the core said...


it's not just them ordering the CEO of BoA to commit securities fraud. The are committing extortion with the threat backing up the order.

Extortion and Securities Fraud are both RICO offenses, so that meets the "any 2 in 10 years" rule, so add racketeering as well.

RICO allows civil suits with treble damages. So when the government does nothing maybe some BoA stockholders can bring a civil racketeering suit against Paulson and Bernanke - well one can dream.

Holyschlitz said...

Give it up Keith, Obama and his AG ain't gonna do jack cause they are in on the scam. Just like he ain't gonna do jack on the torture issue. Everyone who thought they were voting for "Change" got taken for fools. If Obama were serious, he would be all over this stuff, but he won't be.

Anonymous said...

Earlier post referenced a bad end for Cuomo....I hope he is under protection. Cuomo has been making some key moves in trying to expose and prosecute this mess. I am very interested in what he can prosecute while still keeping himself alive!

I do believe Lewis of BofA got railroaded into buying Merrill....I hope that Bernake and Paulson take it in the shorts for that. Not a Lewis fan, but think that's what happened.

Anonymous said...


casey said...

How is the SKF trade working for you guys?

I think a lot of people are caught in a short squeeze right now.I am amazed the market has held up.I am glad i didn't go short a little while back.

Have u driven a ford lately??????????

Anonymous said...


This video may not meet S&A's highly refined publishing standards but it is nevertheless quite appropriate in a humour/fantasy frame of mind...


Anonymous said...

No doubt Lewis was played by the GS Boyz...

The name of the game was (and still is): Save Goldman Sachs At All Costs!

Of course, JPM management is in cahoots.

GS must be taken down!

They are 'ground zero' for the creation and proliferation of fraudulent investment schemes.

And the 'promiscuous' spreaders of Financial AIDS throughout the system.

Fanny Alger said...

There still has be another piece to this puzzle and that is what in the world was Ken Lewis offered to buy Countrywide? Was he promised something if he bought Countrywide, and then his new masters turned on him and forced him to eat ML. The longterm shareholders of BAC should be lining up the lawsuits .

upon the swanney river said...

Atlas Shrugged reconsidered.


Anonymous said...

Don't be surprised is Cuomo gets the swine flu!

These things happen!

Anonymous said...

"...RICO allows civil suits with treble damages..."Bravo.

les said...

I think it's time to call for an armed rally in Washington DC on July the 4th. A million citizens armed with guns, pitchforks, and torches.

Don't plan on doing anything violent. The goal is to see how Washington DC responds.

How many troops will they have to send to protect DC? 100,000?

And among these troops, there will be sympathizers. How many troops can we get to turn their guns toward DC or simply sit out.

If the troops go against direct orders from the govt, the game is over.

Force all politicians to step down. Eliminate party affiliations, eliminate campaign contributions over $200. Call for new elections. Restore the Constitution. Get rid of the Fed Reserve. Create a bare bones federal govt.

Now, I realize this may be far fetched. But, maybe the least DC can do is appoint a special prosecuter before July the 4th to appease the angry masses. I'm sure that the last thing they want is an armed rally in DC. A loose canon on either side can start a civil war.

Anonymous said...

it’s in “the national interest” to “withhold material facts from your shareholders

Anonymous said...

How a HIGH-CLASS CRIMINAL characterizes it: "...Lewis testified that he asked Bernanke to “put something in writing”...

...After Bernanke said he would consider the idea, Paulson called Lewis. He said, according to Lewis, “First it would be so watered down, it wouldn’t be as strong as what we were going to say to you verbally, and secondly, this would be a disclosable event and we do not want a disclosable event.”..."

From Denninger:

Jump You Fuckers"...you're good at stealing and you're good at lying; now let's see how good you are at flying..."

Mike H. said...



alex3191 said...

FedGate - what a scam, going on in the past 90 years ..