New York sues Bank of America for 'duping' government in Merrill deal

AFP - New York state officials Thursday filed a lawsuit against Bank of America and its former top executives alleging they defrauded taxpayers and shareholders in the takeover of Merrill Lynch.
  
Andrew Cuomo, the New York state attorney general, announced the lawsuit against the bank and former chief executive, Kenneth Lewis, and former chief financial officer, Joseph Price, "for duping shareholders and the federal government in order to complete a merger with Merrill Lynch."
  
"This merger is a classic example of how the actions of our nation’s largest financial institutions led to the near-collapse of our financial system," Cuomo said in a statement.
  
"Bank of America, through its top management, engaged in a concerted effort to deceive shareholders and American taxpayers at large. This was an arrogant scheme hatched by the bank’s top executives who believed they could play by their own set of rules. In the end, they committed an enormous fraud and American taxpayers ended up paying billions for Bank of America’s misdeeds."
  
The news came just after the Securities and Exchange Commission announced that Bank of America had agreed to pay 150 million dollars to settle complaints over its handling of the Merrill merger.
  
Neil Barofsky, the inspector general of the Treasury's Troubled Asset Relief Program (TARP) that bailed out Bank of America and backed the Merrill takeover, joined in the announcement, the statement said.
  
According to the lawsuit, "Bank of America’s management intentionally failed to disclose massive losses at Merrill so that shareholders would vote to approve the merger. Once the deal was approved, Bank of America’s management manipulated the federal government into saving the deal with billions in taxpayer funds by falsely claiming that they would back out of the deal without bailout funds," the statement said.