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June 6, 2012

Bank of America Hid Merrill Losses From Shareholders 
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Newly surfaced documents show top executives at Bank of America
neglected to tell shareholders about major losses at Merrill Lynch
before purchasing the company for $50 billion in 2008. While
shareholders relied on optimistic projections from the bank that the
deal would earn money, the losses actually resulted in a $20 billion
taxpayer bailout. Documents filed as part of a shareholder lawsuit in
federal court show Bank of America executives knew about the losses
before the purchase. The documents include testimony from Bank of
America’s then-chief executive, Kenneth Lewis, who admitted he had
received loss estimates that were not included in documents given to
shareholders. Documents show that just days before the vote, both
companies determined Merrill’s losses for the fourth-quarter would be
$14 billion before tax. The bank’s former treasurer reportedly warned
another official at the time that failing to disclose the losses could
be criminal.