Tuesday, September 8, 2009
The New York AG's office is not buying Bank of America's defense of reliance on counsel without disclosure of the attorneys' advice. In a letter posted on its website today to BofA's outside counsel, the office stated:
We are at the stage in our investigation in which we are making charging decisions with respect to Bank of America and its executives. However, Bank of America's indiscriminate invocation of the attorney-client privilege is hindering this Office's ability to make fair and fully informed decisions as to what charges, if any, to bring and whether individual Bank of America officers should be charged. We cannot simply accept Bank of America's officers' naked assertions that they sought and relied on advice of counsel in good faith, and that, therefore, they should not be charged. Accordingly, we request that Bank of America reconsider its decision to prevent this Office from adequately probing these crucial Issues.
The letter goes on to state that there are at least four instances in the fourth quarter of 2008 where the bank and its senior officers failed to disclose material non-public information to its shareholders. It goes on to describe "how Bank of America is improperly using the attorneyclient privilege as both a sword and a shield in defending each of its failures to disclose material information to its shareholders."
Finally, it concludes:
The law is clear that Bank of America and its officers cannot assert an advice of counsel defense for their decisions, and at the same time persist in refusing to disclose the substance of the conversations with counsel. Accordingly, we request that Bank of America reconsider its decision to prevent this Office from adequately probing these crucial issues. We provide you with this final opportunity to reconsider. Otherwise, we will proceed with our charging decisions without giving credit to the advice ofcounsel defenses that Bank ofAmerica has not permitted us to test.