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Bank of America Players on Hot Seat

Updated to include detail on testimony.

WASHINGTON ( TheStreet) -- In the game of hot potato that Bank of America (BAC - Get Report)- 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.
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