This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Bank of America Players on Hot Seat

Stocks in this article: BAC

Updated to include detail on testimony.

WASHINGTON ( TheStreet) -- In the game of hot potato that Bank of America (BAC)- Merrill Lynch merger inquisition has become, the bank's former top lawyer, his replacement and two board members are being interrogated by lawmakers today on Capitol Hill.

Though the 14-page statement of former general counsel Timothy Mayopoulos appears more candid and forthcoming than BofA's current brass, don't expect any of them to take decisive responsibility for the deal.

Mayopoulos makes some interesting disclosures -- Warning: He uses the term "Wild Ass Guess" twice to describe Merrill's loss estimates -- most of his testimony evokes a picture of a bewildered man, who did nothing wrong ethically or operationally, received brilliant performance reviews, but was ejected from BofA's Charlotte, N.C. headquarters without reason.

 Timothy Mayopoulos
Timothy Mayopoulos, former general counsel at Bank of America, is now an executive at Fannie Mae.

He did advise BofA that it didn't have the legal standing to invoke a material adverse change, or MAC, clause to walk away from the deal. However, his understanding was that Merrill expected to lose at the most $9 billion, not the $15.3 billion it would ultimately lose. (The losses estimates accelerated from $5 billion to $7 billion to $9 billion over a period of less than a month, although this apparently wasn't a concern.)

" B ased on information already disclosed to shareholders, a reasonable investor would have been on notice that Merrill Lynch might well suffer multi-billion dollar losses in the fourth quarter of 2008," Mayopoulos writes in his prepared remarks.

He goes on to note that proxy statement and other public documents explicitly state that the markets were, well, in a "Wild Ass" state, and there was no telling what could happen. Terms like "adversely affected," "unprecedented," "unparalleled," and "difficult market conditions" peppered the filings, as they do in most financial statements from that time period.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs