Update | 1:32 p.m. Former BofA CFO Joe Price calls allegations "utterly false." His statement is below.
In response to the lawsuit filed today by New York Attorney General Andrew Cuomo against Bank of America, former CEO Ken Lewis and former CFO Joe Price, the following statement was issued by Mary Jo White of Debevoise & Plimpton, who is representing Lewis.
The decision by Mr. Cuomo to sue Bank of America, Mr. Lewis and other executives in connection with BofA's acquisition of Merrill Lynch is a badly misguided decision without support in the facts or the law. As the SEC correctly concluded recently based on the very same evidence,* there simply is no basis for any case against Mr. Lewis or any other individual.
There is not a shred of objective evidence to support the allegations by the Attorney General. Mr. Lewis and other BofA employees acted in good faith in the Merrill Lynch transaction, following the expert legal advice of counsel and in the best interests of BofA shareholders. The Merrill Lynch transaction - undertaken at a time of significant danger to our financial system - has also proven to be an unmitigated success for BofA shareholders. Mr. Lewis has been unfairly vilified by the political search for accountability for the financial meltdown.** This suit is not fair, it is without factual or legal basis, and we look forward to prevailing in a court where the facts and law do matter.
*In Litigation Release No. 21371 filed by the U.S. Securities and Exchange Commission (“SEC”) on January 11, 2010, the SEC noted the following: “According to the SEC's proposed complaint, Bank of America executives at various times discussed the firm's disclosure obligations with internal and external counsel. These executives are not alleged to have deliberately concealed information from counsel or otherwise acted with scienter or intent to mislead. Nor is any counsel alleged to have acted with scienter or intent to mislead. For these reasons, the SEC's proposed complaint does not seek charges against any individual officers, directors or attorneys. SEC staff has advised the Commission that, after a careful assessment of the evidence and all of the relevant circumstances, it has determined that charges against individuals for their roles in connection with proxy disclosure are not appropriate.”
** On December 9, 2009, while Mr. Lewis was still CEO and President of Bank of America, the Company sent the U.S. Treasury $45 billion, including accrued dividends, to repay the U.S. taxpayers' entire investment in the company as part of the Troubled Asset Relief Program (TARP).
Joe Price, who is now the bank’s head of consumer banking, issued the following statement through his attorney, Bill Jeffress Jr.
The allegation that Mr. Price deliberately caused Bank of America to withhold from shareholders information they were entitled to know is utterly false. In truth, he did exactly what a responsible regulator would want and expect from a chief financial officer. He raised with the bank’s counsel, and with management both at the bank and Merrill Lynch, a concern whether existing public disclosures were adequate in light of what he leamed about projected losses for the fourth quarter at Menill Lynch. He made available to counsel all information believed by him or by them to be relevant to the issue. He listened to counsel’s advice, found it to be convincing, and followed it.
The complaint filed by the New York Attomey General makes allegations that are flatly contrary to the evidence and contrary to the conclusions of the Securities and Exchange Commission based on the same evidence. The Attorney General has misrepresented facts; he has selectively referred to facts thought to support his theory, while ignoring facts that contradict his theory; and he has drawn conclusions that a fair-minded regulator could not responsibly draw. Mr. Price denies the charges against him and will vigorously defend the lawsuit.