Transcript of: BofA execs face fraud charges
BRIAN WILLIAMS, anchor:
And with all this going on in
Wall Street
,
New York
's attorney general was filing civil fraud charges against the CEO of
Bank of America
-- former CEO
Ken Lewis
, and the bank's former chief financial officer. They are the first senior managers to face charges in the wake of the financial meltdown. Our own senior investigative correspondent,
Lisa Myers
reports on the fallout.
LISA MYERS reporting:
The civil fraud charges against
Bank of America
and former CEO
Ken Lewis
stem from the bank's takeover of
Merrill Lynch
in
2008
.
Mr. KEN LEWIS:
Certainly the
Merrill Lynch
acquisition, in particular, came with risk.
MYERS:
Lewis
and the bank are accused of misleading investors by hiding massive losses at
Merrill Lynch
, even as shareholders voted on the deal, and of manipulating the
federal government
into providing a $20 billion bailout to help deal with the losses. The complaint calls this "an enormous fraud on taxpayers" and claims the bank and
top management
were motivated by "greed, hubris, and a palpable sense that the normal rules of
fair play
don't apply to them." Legal experts call this a significant development.
Professor JOHN COFFEE (Columbia Law School):
I think the American public wants accountability. This is the first time that anyone is seeking to hold responsible senior executives at a major bank.
MYERS:
It came as the
Securities and Exchange Commission
moved to settle federal charges against
Bank of America
for concealing losses and bonuses. The bank agreed to pay a $150 million penalty to shareholders. This
still
must be approved by a judge. The tougher fraud charges were brought by
New York attorney general
Andrew Cuomo
, who was joined by the federal top cop for the bailout program,
Neil Barofsky
. Experts say it indicates they think the
SEC
didn't go far enough.
Prof. COFFEE:
This does read as a kind of implied criticism of the
SEC
.
MYERS:
A spokesman for
Bank of America
called the fraud charges "totally without merit" and said all involved acted in good faith under difficult conditions.
Lewis
' lawyer says there's not a shred of objective evidence to support the charges against him and that
Lewis
has been unfairly vilified in the political search to assign blame for the financial meltdown. Lisa Myers, NBC News, Washington.
“ ”