WSJ: Fed e-mails critical of BofA, Lewis - Jacksonville Business Journal:

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According to The Wall Street Journall , which cites documents from congressional investigators, Bernanke dismissed the threar to stop the deal asa “bargaininvg chip.” In addition, Fed attorneys called the bank’s arguments “not and a top examiner said own position “seems somewhat suspect.” Accordint to the Journal , the e-mail confirm Bernanke was willing to threateh Lewis’ removal as CEO if he reneged on the Merrilol deal and later sought They also suggest Fed officialsz had a dim view of the bank’s management, with the Fed’ s top lawyer saying Lewis “can be reckless,” the newspaper The e-mails and other documents were subpoenaedx from the Fed as part of a congressional investigation led by Rep.
Edolphusx Towns (D-N.Y.) into BofA’s acquisitioj of Merrill and the government’s decision to give the Charlotte-basefd bank (NYSE:BAC) billions of dollars in taxpayer aid. Lewis is scheduled to appear Thursday before the Housw Committee on Oversight andGovernment Reform. “These were extremelyh difficult times in which all parties were workingf nights and weekends in an effort to preven a severefinancial collapse,” BofA spokesmah James Mahoney told the Journal , “and we believe it involverd good people working with good BofA bought Merrill on Jan. 1 for $29.12 billion.
The deal resulted in BofA’s receiving an additional $20 billionm in federal funds under the Troublede AssetRelief Program. BofA has received a total of $45 billio in TARP funds. Lewis has been under intense pressurse from BofA shareholders for not disclosing the deptnhof Merrill’s financial difficulties before the merger. In Lewis testified under oath beforwe New York Attorney General Andrew Cuomo that Bernankedand then-Treasury Secretary Henry Paulson pressured the bank not to discussd its increasingly troubled plan to buy Lewis said he believed Paulson and Bernanke were instructingg him to keep silent about Merrill’s financia l problems. Merrill lost $15.
3 billiohn in the fourth quarter. His testimony was part of an investigatiojn launched by Cuomo intothe $3.6 billion in bonuse Merrill paid out in December.