In the News: Ken Lewis Forced Quiet on Merrill Acquisition
Quick recap: Ken Lewis is claiming that Paulson and Bernanke essentially “forced” him to follow through on the Merrill deal and stay quiet about the impending losses. Upon finding out about the imminent losses and troubled balance sheet, B of A could have invoked a tear-up clause in the agreement.
Honestly, I can’t put it past the guys – I mean no one wanted another bank failure and let’s be honest, Bernanke, Paulson, etc really didn’t know how to handle the sudden onslaught of distress and panic – no one did (or possibly does, but here’s hoping). Then again, a few weeks ago Lewis was blaming John Thain for withholding figures, and using some dirty tactics – maybe Lewis is just grabbing at the next straw to save his butt; he has to try to save his job somehow, and what better way than with a new scapegoat.
Bernanke and other sources are denying any conversations of the sort, claiming that Lewis was never bullied into keeping quiet, nor was his or the Board’s positions threatened in any way if they stopped (or intended to stop) the deal.
Next, Paulson has come out and stated that he did in fact threaten Ken Lewis and the Bank of America Board, not necessarily because he wanted to – it was at the request of Bernanke – then he changed his mind and said that it was all his idea – convenient. This little nugget obviously contradicts Bernanke’s statement in which he claimed that no one ever threatened Lewis’ job over the Merrill deal – although at least Big Ben didn’t make the call.
At the end of the day, it’s just another fascinating, confidence building, Wall St. tale. It is interesting, however, to see just how deceitful the people we thought were there prevent fraud will actually become in order to achieve their goals – lying is lying, whether it’s a CEO or a Fed Chairman, and frankly, it’s inexcusable. If we can’t count on our regulators, then we’ve got much bigger problems than whether Merrill Lynch would have gone under. Just my $0.02 – drop some comments with your opinions, theories and emotions – they are always appreciated.
