BofA CEO Lewis Not Off the Hook

(Adds information on investigation and Bernanke testimony.)

Bank of America (BAC Quote) CEO Ken Lewis may well have been pressured by regulators into completing the Merrill Lynch deal late last year, but ultimately the decision -- and the consequences -- rested with the embattled executive.

Lewis had in September agreed to acquire the troubled investment bank for a $50 billion all-stock deal, but by December Merrill's losses were spiraling out of control. In the three months since the deal was announced, Merrill lost over $15 billion on bad mortgage holdings, and its future was unclear.

But when Lewis informed regulators that he was considering using a "material adverse change," or MAC, provision to walk away from the deal, Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson urged him to go forward. ...