July 16, 2009
The BofA Story
The heavy-handed approach of government regulators to the Bank of America, both over the Merrill Lynch acquisition, and over the current operation of the bank is good theatre. Did Paulson or Bernanke threaten to fire the CEO, Lewis, if he did not complete the Merrill deal? What is stunning, however, is the lack of public disclosure by a publicly traded company of what was happening behind the scenes due to government pressure. The government has one agency, the SEC, demanding the disclosure of all material information to the trading markets, and another agency, the Treasury (and perhaps the Fed) demanding confidentiality of what are obviously material events. The Bank is, as I write, operating under a secret Memorandum of Understanding with the Treasury on board composition and operating targets. Investors are guessing at its content and effect. Does Treasury have the power to waive the disclosure obligations of a publicly traded company?
July 16, 2009 | Permalink
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