Escolar Documentos
Profissional Documentos
Cultura Documentos
by Joseph Zernik
Human Rights Alert DN: cn=Joseph
Zernik, o, ou,
PO Box 526, La Verne, CA 91750 email=jz12345@e
Fax: 323.488.9697; Email: jz12345@earthlink.net arthlink.net, c=US
Date: 2010.11.05
Blog: http://human-rights-alert.blogspot.com/ 02:12:22 +02'00'
Scribd: http://www.scribd.com/Human_Rights_Alert
09-04-23 State of New York Attorney General Andrew Cuomo letter to US Congress in re:
Investigation of Bank of America – Merrill Lynch merger
Attached are analysts’ responses, the letter by NY Attorney General Andrew Cuomo, and the attachments:
1) Mish’s Global Economic Trend Analysis: Let the Criminal Indictments Begin: Paulson, Bernanke,
Lewis
2) Olivier Garret in Safe Haven: Bigger Than Watergate?
3) Joe Weisenthal in Business Insider: Cuomo Unveils Paulson, Bernanke, Lewis Conspiracy
4) April 23, 2009 NY Attorney General letter to US Congress
5) April 23, 2009 NY Attorney General letter to US Congress: Exhibit A- Examination of Kenneth Lee
Lewis
6) April 23, 2009 NY Attorney General letter to US Congress: Exhibit B- Minutes of Special Meeting Of
Board of Directors of Bank of America Corporation, December 22, 2008
7) April 23, 2009 NY Attorney General letter to US Congress: Exhibit C- Minutes of Special
Meeting of Board of Directors Bank of America Corporation, December 30. 2008
8) April 23, 2009 NY Attorney General letter to US Congress: Exhibit D- December 22, 2008 Email
from Kenneth Lewis to the Board of Directors.
In contrast with the Analysts’ opinions, none of the perpetrators has suffered any consequences to this date.
It is claimed:
1) That following the “conspiracy” by the most senior US officers and senior officers of Bank of
America Corporation in the merger of Bank of America Corporation and Merrill Lynch (and most
likely also in the prior merger of Bank of America Corporation and Countrywide Financial
Corporation), all respective senior banking officers effectively became indemnified for both past and
future criminalities.
2) That in response to pressure both at home and abroad to “shore up” banking regulation in the United
States the US therefore staged “reverse show trials”, including, but not limited to SEC v BAC (1:09-
cv-6829) at the US District Court, Southern District of New York, and SEC v Mozillo () at the US
District Court, Central District of California.
3) That US Judges colluded in the conduct of such pretense litigations.
4) That the conduct of such pretense litigations was enabled through fraud in the case management and
public access systems (PACER and CM/ECF) of the US courts.
11/5/2010 Blogger: "Let the Criminal Indictments …
. Fr ida y , A pr il 2 4 , 2 0 0 9 .
New York State Attorney General Andrew Cuomo's letter to the SEC and Senate Banking Committee
on the Bank of America, Merrill Lynch Merger provides strong evidence of coercion to commit securities
fraud by former Treasury Secretary Paulson and Fed Chairman Ben Bernanke, and actual securities fraud by
Bank of America CEO Kenneth D. Lewis.
At issue is Lewis's decision to back away from the merger deal with Merrill Lynch on a MAC (material adverse
change) clause because of rapidly deteriorating conditions at Merrill Lynch. Here are a few pertinent snips
from Cuomo's letter.
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
bx.businessweek.com/…/view?url=http:… 1/3
11/5/2010 Blogger: "Let the Criminal Indictments …
deescalate." Lewis admits that Secretary Paulson's threat changed his mind about invoking that
MAC clause and terminating the deal.
It's crystal clear from the letter that a strong case can be made that Paulson and Bernanke coerced Lewis to
carry out a merger agreement that was not in Bank of America's shareholders best interest. Lewis arguably
did so only to save his own job and the board.
I called this correctly at the time. Please consider Market Votes "No Confidence" In Merrill, Bank of
America Merger.
“There was no pressure from regulators, absolutely no pressure,” said Mr Lewis, who described the
deal as “the strategic opportunity of a lifetime”. He said: “The first contact came on Saturday
morning and we put the transaction together in 48 hours. The instant we talked it made sense.”
My Translation: "The pressure from the Fed was enormous. Anyone in their right mind knows this
deal makes no sense to Bank of America".
....
The moral of this story is: The strong swallow the weak until the strong become weak.
And so it was, the relatively strong was coerced to buy the pathetically weak.
I suspect Lewis he will be forced out as CEO whether he is indicted or not. Certainly he deserves to go. The
more serious issue is the appearance of coercion by Paulson and Bernanke.
Please note that Cuomo's letter states "In an interview with this Office, Secretary Paulson largely
corroborated Lewis's account. "
As far as I am concerned, Paulson just pleaded guilty. I do not care what Paulson's reasons were, no one is
above the law.
bx.businessweek.com/…/view?url=http:… 2/3
11/5/2010 Blogger: "Let the Criminal Indictments …
Let t h e Cr i m i n a l In di ct m en t s Begi n : Pa u l son , Ber n a n ke, Lewi s
Po s ted by Michael Shedlo ck at 12:48 AM .... Pr i n t .... Em a i l
Subscribe to:
bx.businessweek.com/…/view?url=http:… 3/3
11/5/2010 Bigger Than Watergate? | Olivier Garret…
Reportedly, Bill O'Reilly referred to a recent story out of our nation's capital as "bigger than Watergate."
Whether the story is bigger than Watergate or not, it is definitely a scandal of huge proportions.
To sum it up, on April 23, 2009, New York Attorney General Andrew Cuomo sent a letter to Chairman of the
U.S. Senate Committee on Banking, Housing, and Urban Affairs Chris Dodd; Chairman of the House Financial
Services Committee Barney Frank; SEC Chairwoman Mary Schapiro; and Chairwoman of the Congressional
Oversight Panel Elizabeth Warren.
The letter outlined how former Treasury Secretary Paulson and Fed Chairman Ben Bernanke forced Bank of
America's acquisition of Merrill Lynch - even though Bank of America CEO Ken Lewis and the board of
directors tried to pull the plug on the deal after it turned out that Merrill Lynch was far deeper in debt than it had
admitted.
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.
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.
Meanwhile Ken Lewis has been sacked as chairman of the board at Bank of America... even though he might
well have been the only conscientious and honest player in this scheme. And now the sharks have started to turn
on each other: according to Cuomo, Paulson "largely corroborated Lewis's account" and informed the attorney
general's office that he "made the threat at the request of Chairman Bernanke." The latter has so far chosen to
keep his mouth shut.
The key factor here is not that the Devious Duo forced Bank of America into a merger it didn't want to commit
to. Granted, that's an unheard-of interference of government in the free market, but we're quite sure that the
Powers-That-Be could sweep it under the rug by invoking the "greater good."
safehaven.com/…/bigger-than-waterga… 1/3
11/5/2010 Bigger Than Watergate? | Olivier Garret…
No, the part of the story that could really break Al Paulson and Don Bernanke's necks is the failure to inform the
Securities and Exchange Commission, as well as Bank of America's shareholders, of the extent of toxic waste
Bank of America was forced to accept. That's fraud, pure and simple.
And that's a pretty good sign that this is not going to go away. Some of the Casey Research editors - yes, we do
have bets out - think it's going to be huge, especially since the scandal happened on President Bush's watch and
the Democrats are in control of Congress. Chances are that either Paulson or Bernanke is going down,
depending who cuts a deal with prosecutors first. Their "friends in high places" may be able to keep the Justice
Department out of it, but they won't be able to control ambitious state officials like Cuomo. There's blood in the
water, and this is a career maker for a prosecutor.
So what happens when the highest financial officials in the U.S. government are unmasked as crooks? Will there
be riots in the streets? Will the average American pick up his torch and pitchfork and march on Washington
D.C.? Probably not. But it may happen at some point as we are moving deeper into the Greater Depression, a
term coined by Doug Casey, our resident contrarian investment guru. Read Doug's FREE, 13-page special
report about what will happen when social unrest breaks out in the United States, and what you should do to
prepare your assets for that time. Click here to read it now.
Prior to joining Casey Research in January 2007, Olivier Garret was a principal in Kemp
Management, a management consulting firm focused on merger & acquisition due diligence,
restructuring, and turnaround activities for a variety of private equity firms and financial
institutions. In this capacity, he led and participated in dozens of merger & acquisition and
restructuring deals in a variety of industries.
In the 1990's, Olivier was CEO and general manager of a number of industrial businesses
ranging from entrepreneurial start-ups to divisions of a Fortune 500 company.
He earned an MBA from the Amos Tuck School of Business Administration at Dartmouth College and a
Master's in Business from the Université de Paris IX-Dauphine.
Information contained herein is obtained from sources believed to be reliable, but its accuracy cannot be
guaranteed. The information contained herein is not intended to constitute individual investment advice and is not
designed to meet your personal financial situation. The opinions expressed herein are those of the publisher and
are subject to change without notice. The information herein may become outdated and there is no obligation to
update any such information. Doug Casey, entities in which he has an interest, employees, officers, family, and
associates may from time to time have positions in the securities or commodities covered in these publications.
safehaven.com/…/bigger-than-waterga… 2/3
11/5/2010 Bigger Than Watergate? | Olivier Garret…
Corporate policies are in effect that attempt to avoid potential conflicts of interest, and resolve conflicts of interest
that do arise in a timely fashion. No portion of this web site may be extracted or reproduced without permission
of the publisher.
safehaven.com/…/bigger-than-waterga… 3/3
11/5/2010 Andrew Cuomo's Angry Letter To Regu…
Developing... Andrew Cuomo has sent an angry letter to BAC Nov 4 2010, 06:40 PM EDT
and Ben Bernanke over the allegation that they forced Bank of
America (BAC) to complete its acquisition of Merrill Lynch. See Also:
Below it are the various exhibits, including Ken Lewis' testimony and minutes of a BofA boardmeetings/
BofAmergLetter
businessinsider.com/andrew-cuomo-se… 1/10
11/5/2010 Andrew Cuomo's Angry Letter To Regu…
Testimony
Publish at Scribd or explore others: Magazines & Newspape Brochures & Catalogs economy stocks
More board minutes
businessinsider.com/andrew-cuomo-se… 2/10
11/5/2010 Andrew Cuomo's Angry Letter To Regu…
Tags: Wall Street, Merrill Lynch, Bank of America, Treasury, Ben Bernanke, Banks, Financial Services, Hank Paulson, Andrew Cuomo, Mergers And
Acquisitions | Get Alerts for these topics »
Share:
businessinsider.com/andrew-cuomo-se… 3/10
STATE OF NEW YORK
OFFICE OF THE ATTORNEY GENERAL
120 Broadway
New York, NY 10271
On September 15,2008, Merrill Lynch entered into a merger agreement with Bank of
America. The merger was negotiated and due diligence was conducted over the course of a
tumultuous September 13-14 weekend. Time was of the essence for Merrill Lynch, as the
company was not likely to survive the following week without a merger. The merger was
approved by shareholders on December 5, 2008, and became effective on January 1,2009.
The week after the shareholder vote - and days after Merrill Lynch set its bonuses
Merrill Lynch quickly and quietly booked billions of dollars of additional losses. Merrill
Lynch's fourth quarter 2008 losses turned out to be $7 billion worse than it had projected prior to
the merger vote and finalizing its bonuses. These additional losses, some of which had become
known to Bank of America executives prior to the merger vote, were not disclosed to
shareholders until mid-January 2009, two weeks after the merger had closed on January 1,2009.
On Sunday, December 14,2008, Bank of America's CFO advised Ken Lewis, Bank of
America's CEO, that Merrill Lynch's financial condition had seriously deteriorated at an
alarming rate. Indeed, Lewis was advised that Merrill Lynch had lost several billion dollars
since December 8, 2008. In six days, Merrill Lynch's projected fourth quarter losses
skyrocketed from $9 billion to $12 billion, and fourth quarter losses ultimately exceeded $15
billion.
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:
[W]e wanted to follow up and he said, 'I'm going to be very blunt, we're very
supportive on Bank of America and we want to be of help, but' -- as I recall him
saying "the government," but that mayor may not be the case - "does not feel it's
in your best interest for you to call a MAC, and that we feel so strongly," -- I
can't recall ifhe said "we would remove the board and management if you called
it" or ifhe said "we would do it if you intended to." I don't remember which one
it was, before or after, and I said, "Hank, let's deescalate this for a while. Let me
talk to our board." And the board's reaction was of "That threat, okay, do it.
That would be systemic risk."
In an interview with this Office, Secretary Paulson [argely 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 told Lewis a series of
concerns, including that Bank of America's invocation of the MAC would create systemic risk
and that Bank of America did not have a legal basis to invoke the MAC (though Secretary
Paulson's basis for the opinion was e,ntirely based on what he was told by Federal Reserve
officials).
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.
Secretary Paulson has informed us that he made the threat at the request of Chairman
Bernanke. After the threat, the conversation between Secretary Paulson and Lewis turned to
receiving additional government assistance in light of the staggering Merrill Lynch losses.
Lewis spoke with individual Board members after his conversation with Secretary
Paulson. The next day, December 22,2008, the Board met and was advised of Lewis's decision
not to invoke the MAC. The minutes of that meeting listed the key points of Lewis's calls with
Secretary Paulson and Chairman Bemanke:
(i) first and foremost, the Treasury and Fed are unified in their view that the
failure of the Corporation to complete the acquisition of Merrill Lynch would
result in systemic risk to the financial system in America and would have
adverse consequences for the Corporation; (ii) second, the Treasury and Fed
state strongly that were the Corporation to invoke the material adverse change
("MAC") clause in the merger agreement with Merrill Lynch and fail to close
the transaction, the Treasury and Fed would remove the Board and management
of the Corporation; (iii) third, the Treasury and Fed have confirmed that they.
will provide assistance to the Corporation to restore capital and to protect the
Corporation against the adverse impact of certain Merrill Lynch assets: and (iv)
fourth, the Fed and Treasury stated that the investment and asset protection
promised could not be provided or completed by the scheduled closing date of
the merger, January 1, 2009; that the merger should close as schedu[ed, and that
the Corporation can rely on the Fed and Treasury to complete and deliver the
promised support by January 20, 2009, the date scheduled for the release of
earnings by the Corporation.
The Board Minutes further state that the "Board clarify[ied] that is [sic] was not persuaded or
influenced by the statement by the federal regulators that the Board and management would be
3
removed by the federal regulators if the Corporation were to exercise the MAC clause and failed
to complete the acquisition of Merrill Lynch."
Another Board meeting was held on December 30,2008. The minutes of that meeting
stated that "Mr. Lewis reported that in his conversations with the federal regulators regarding the
Corporation's pending acquisition of Merrill Lynch, he had stated that, were it not for the serious
concerns regarding the status of the United States financial services system and the adverse
consequences of that situation to the Corporation articulated by the federal regulators (the
"adverse situation"), the Corporation would, in light of the deterioration of the operating results
and capital position of Merrill Lynch, assert the material adverse change clause in its merger
agreement with Merrill Lynch and would seek to renegotiate the transaction."
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.
Lewis testified that the question of disclosure was not up to him and that his decision not
to disclose was based on direction from Paulson and Bernanke: "I was instructed that 'We do
not want a public disclosure. '"
Secretary Paulson, however, informed this Office that his discussions with Lewis
regarding disclosure concerned the Treasury Department's own disclosure obligations. Prior to
the closing of the deal, Lewis had requested that the government provide a written agreement to
provide additional TARP funding before the close of the Merrill Lynch/Bank of America merger.
Secretary Paulson advised Lewis that a written agreement could not be provided without
disclosure.
Lewis testified that there was no discussion with the Board about disclosure to
shareholders. However, on the night of December 22, 2008, Lewis emailed the Board, "I just
talked with Hank Paulson. He said that there was no way the Federal Reserve and the Treasury
could send us a letter of any substance without public disclosure which, of course, we do not
want." The December 30 Board meeting minutes further reflect that Bank of America was trying
to time its disclosure of Merrill Lynch's losses to coincide with the announcement of its earnings
in January and the receipt of additional TARP funds: "Mr. Lewis concluded his remarks by
stating that management will continue to work with the federal regulators to transform the
principles that have been discussed into an appropriately documented commitment to be codified
and implemented in conjunction with the Corporation's earning [sic] release on January 20,
2009."
It also bears noting that while no public disclosures were made by Bank of America,
Lewis admitted that Bank of America's decision not to invoke the MAC clause harmed any
shareholder with less than a three year time-horizon:
4
Q. Wasn't Mr. Paulson, by his instruction, really asking Bank of America
shareholders to take a good part of the hit of the Merrill losses?
A. What he was doing was trying to stem a financial disaster in the financial markets,
from his perspective.
Q. From your perspective, wasn't that one of the effects of what he was doing?
A. Over the short term, yes, but we still thought we had an entity that filled two big
strategic holes for us and over long term would still be an interest to the
shareholders.
Andrew M. Cuomo
Attorney General of the
State of New York
5
[Page 1]
"
. . .
[Page 9]
1 K.L. Lewis
10 so.
[Page 10]
K. L. Lewis.
remember.
tax.
Q. Anything else?
edge?
[Page 11]
1 K.L. Lewis
13 time.
19 that day?
24 call.
[Page 12]
1 K.L. Lewis
2 14th.
13 December 5.
[Page 13]
K.L. Lewis
issue.
dramatically.
[Page 33J
1 K.L. Lewis
2 Merrill Lynch?
8 made aware.
10 respect to
24 it.
[Page 34]
K.L. Lewis
A. I don't remember.
noon. "
calendar.
D.C. "?
[Page 35]
1 K.L. Lewis
4 sure.
14 memory.
16 the calendar?
18 That's my handwriting.
21 calendar?
23 I keep.
[Page 36]
1
K.L. Lewis
2
you?
3
THE WITNESS: Yes. I think her calendar
5
MR. LAWSKY: There are days where you
6
have nothing on there, which, I assume,
21 has more.
[Page 37]
K.L. Lewis
have a MAC?
losses?
7 didn't recognize.
9 officials?
10 A. Yes.
12 the meeting?
14 have been.
16 like that?
~
17 A. No.
25 meeting yourself?
[Page 39]
1 K.L. Lewis
2 A. Yes.
4 America results?
5 A. Yes.
19 acceleration.
25 conversation.
[Page 40]
K.L. Lewis
A. Yes.
$12 billion.
America?
13 recall.
20 the meeting?
21 A. No.
[Page 42]
1 K.L. Lewis
12 And we left.
15 A. I don't remember.
[Page 51]
1 K.L. Lewis
[Page 52]
K.L. Lewis
[Page 53]
1 K.L. Lewis
5 reaction was?
11 that conversation.
19 conversation?
[Page 54J
1 K.L. Lewis
22 find?
[Page 55]
K.L. Lewis
being portrayed.
of communicating?
something.
A. No.
14 it we would."
19 done.
23 the board.
[Page 57]
1 K.L. Lewis
:----- -_ _--
... - .
[Page 58]
K.L. Lewis
shareholders' equity?
shareholders. Yes.
clause?
[Page 59]
1 K.L. Lewis
10 government?
18 well/ right?
[Page 60]
1 K.L. Lewis
8 changes?
14 be $15 billion.
18 going on here?"
22 to Merrill."
[Page 79]
K.L. Lewis
time period?
involved, as well.
the three.
[Page 80]
1 K.L. Lewis
3 A. Correct.
20 conversation?
24 year.
[Page 81]
1 K.L. Lewis
3 corporation.
6 did he mean?
10 disclose it.
13 to disclose it.
.~-_._-
[Page 82]
K.L. Lewis
interest.
obligation, too.
[Page 83]
1 K.L. Lewis
5 mean.
9 interest?
21 that you felt you had a commitment from the Fed and
24 that right?
[Page 84]
1 K.L. Lewis
17 the company.
[Page 85]
K.L. Lewis
government.
his perspective.
[Page 86]
1 K.L. Lewis
[Page 87J
1 K.L. Lewis
5 going to be?
11 you?
15 A. Which one?
[Page 88]
K.L. Lewis
losses?
exchanged.
any.
[Page 89]
1 K.L. Lewis
5 conversation.
7 A. Of disclosure?
25 Department?
[Page 90]
1 K.L. Lewis
4 any.
13 you?
[Page 96]
1 K.L. Lewis
4 the matter?
5 A. No.
8 mouth.
23 circumstances.
[Page 97]
K.L. Lewis
that.
resigned. Yes.
[Page 98J
1 K.L. Lewis
5 by this?
9 preferred.
23 MAC?
7 transaction.
8 A. Yes.
11 process?
15 decided.
19 the 22nd. And between the 22nd and the end of the
21 that point.
have saved."
18 committee.
OF
D~cember22,2008
Mf;
.
Lewisnot-ed
-
tliat fOU call had been taken.Mt.
"7.:_.. ' . .. ..
leWis
- - .. _
stated
-". . .-.
that-
.:
he<had
.
spqJ(E~n tp:,mo;;t of t~ Directors by telephone -earlier in the <iay(~~rd,iR9 the! ~~I)~s. qf the
pre~din~ .~~k~~(t
-
Mt. Lewis stated tne purposeofthe speciatmeeting{iS:tQ)tl$tJr~tl)illlhe Bo~ is
in a~9O!dwittl r:J)cmagerpent's recommendation to comp1ete lheflcqUi$~¢ion of ~~rm'Lynctl ~.
Co.. Jn~. rMerri~ Lynch';}. as St::hEtduled QnJanuary~ 1; 2009.pwstJam ttl th~ lermsofthat
certa!t:tt.9r~f!menlanr,1 Plan of Merger ("Merger Agreement"), dateclSepte'!iber15. ZOOS, after
dueconsidE!rat10n of the undertakin.gsandadmonitions of the feder~negl,ijat,ors.
Mr; Lewis relterated tllat be had discussed iO detail the (;<mtj:nfof the previous
conversations with- federal regulators. withthe.eoarG~. He reported tbatlo~dditi(lll to tm,
prevlouslydescl1bedconversations, he had spo~enagain with Mr. Bemankewno stated 1h8t he,
Mr.. Bernanke, has spoken to other federal regUlators, including the Office oft~Comptroner of
the Currency C-OCC") and the Fore, and hcas confirmeq that theOCe. FDIC, thecurrenla~
incoming Treasury· Qfficials; and th~ Incoming econOITt~ 'team of t.h~ neoN. admii:listratiOn are
il1f{)rm~clofthecQITlmitrJ'lent
to th~' pwporatiorl. bythefe<i.and·Tref.!$j.lry ~·~·tha~a" ~ncur With
the,comrnitmen1 qft~ C9mbined fedeJ~':fes(llat9r$ ne~raJ regiJlator~n{t) the CO~ll,
There b~if)g. nqfurther I:>usiness to .come before the Bbant .~. meeting was
adj()urned.
/;/ . /'.
·r·,~.Z2. ~
Kenneth D. Lewi~
a·#~~~-.~.
AUreA, Herald
Secrel5ll}'
Also l'r-esent were: Messrs. Brian To MOYJlihan~ ~t1<i JOe l .. Price. and Mmes.
Amy Woods Brin1dey. and Alice A Herald,officersof tl'le,CorporatiQri.
Mr. Lewis advisedthe Board that he wished to fully inform the Board regarding
discussions between management of the Corporation and federal regulators which had
oc:GUITedsincethe Board meeting of December 22,2008, including the Jederaf regulators'dlm
viE!W ()fthe economy•.
Further; ML Lewis reported that it 'was also. made clear talbe federal regulators
that, because of the federal r~ulators'expressconcerns regarding:fhe adyerse situation that
Lynch. ifis~ppropriate tha, t,tle federal
\N(juld ocCur if theC(l[poration fSlted to acquire Mertil1
,government make the Corporation whole forthe,d¢t,erioratkm in MerOll Lyncn's OPfarating
results and financial-condition.
REDACTED
Mr. Lewis sta1edthat management has been insis~[ltwilh. the federal regulators·
Mr. Lewis explained .that recent discussions had begun to address concerns
.raised py -the supervisory reg u(atof$of the Fed. These regulatofshad~expressedconcem
regarciing'tt}e Corporation's ability to remain stabte in light of their ovmviewofthe economy, the
CorporatH>n's earnings prospeds and Ihestability of the banking industry. Mr. Lewis reported
the,Fe9'stJbjectivelsthat the Corpori;ltlon remain above reproach as astabJe member ofthe
financiats¥stem asth~ recession continues,
Me Le\Olis described the federal regulators'djm view of the near term economy
andthejr wojedi9nsoft~econorny'simpact on th~CQrpQratioJ"i'searnjngprospectsfor 2009.
Herep()rt~cl the reglJlators COncern that weakened earnings anddlvldend payments could
ccitise,c(ipital iss~es for the CorpofCitionby early in the secqndquaT1er in view of the low
tangjbJ~ c~1Tlmon ~ulty ratio.
After summary remarKS by Mr. Lewis, there being no further business to come
before· the Board, the meeting was adjourned.
Kenneth O. LeYJjs
Chairman of the BParO
AliceA A.er~d
Secrelan'
I
J
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