Cuomo Takes on Bank of America... Some More
Christ, Bank of America, are you ever going to get a break? I hate to say this (not), but, uh, maybe someone's the scapegoat for every inch of America's bailout rage?
Ratcheting up pressure on the largest U.S. bank, New York Attorney General Andrew Cuomo has subpoenaed five current or former Bank of America Corp directors to learn what they knew about Merrill Lynch & Co's problems as the companies prepared to merge.
The attorney general issued the subpoenas on Wednesday morning to determine "what did the board know and when did they know it," according to a person familiar with the probe who requested anonymity because Cuomo's investigation is ongoing.
According to the Wall Street Journal, the subpoenaed directors are the five members of Bank of America's audit committee at the time.
They include: Walter Massey, professor emeritus of Morehouse College and now the bank's chairman; Thomas May, the chief executive of utility NStar and who chaired the audit committee; retired Army Gen. Tommy Franks; real estate executive William Barnet and venture capital executive John Collins. Only Massey and May are still on the board.
Cuomo wants to know directors' familiarity last November and December with Merrill's mounting losses, the $5.8 billion of bonus payouts that Bank of America authorized and which details should be disclosed to shareholders, the person said. Most if not all of the 16 directors at the time may be called to testify, the person said.
"Directors are responsible to shareholders that elected them," said Cornelius Hurley, director of Boston University's Morin Center for Banking and Financial Law. "Doing the right thing is a rule and, if someone says do the wrong thing, that doesn't absolve them from that responsibility."
That's true. But what makes Bank of America any different from, say, Countrywide? And no, that is not a rhetorical question.