Ken Lewis should be so ashamed of himself that he should resign immediately. He must really think that the stockholders are stupid if he believes that we will buy the allegation that the Secretary of the Treasury and the head of the Federal Reserve had any role in his failure to make adequate disclosures relative to the Merrill acquisition. Even if one wants to believe that he was pressured, the fact remains that his first and only obligation was to the shareholders. He and his lawyer’s knew that by failing to disclose material information, the law was being broken. If someone told him to break the law such is no defense for doing so.
It is very clear that the Bank of America shareholders, not the U. S. Government, are paying for the “bailout” of Merrill. If the U.S. Government, by it’s action, forced that result, then all shareholders should be reimbursed for thair losses by the U. S. government. However, it is very doubtful that the government mandated a withholding of critical information from shareholders that would have resulted in a no vote on the acquisition. The fact is that Ken Lewis and the Board should have walked away from the deal once they learned how bad the financial situation was or they should have insisted that a deal be structured where the shareholders of Merrill got nothing for their stock and the Treasury guaranteed the B of A against loss, if it was in the best interests of the financial system to have B of A take over Merrill.
10/10/09 – Our wishes have been answered. He has resigned. Now, lets hope that a more sane, newly constituted Board of Directors can guide the Bank back to the lofty position it once had and restore shareholder faith.