State of New York Attorney General, Andrew M. Cuomo is bringing suit against Bank of America, their former CEO Kenneth D. Lewis and their former CFO Joe Price.  This is all about the take over of Merrill Lunch and hiding the true figures from share holders.  The take over eventually led Bank of America back to the federal government for a second bailout at taxpayers expense.

Of course, Bank of America claims no one in their corporation did anything wrong.  They are paying the legal fees for their former executives, presumably to show they are innocent of any wrong doing.

Bank of America was a big part of the problem that brought the US economy to the brink of disaster.  Now they are trying to play as though they are the good guys in the whole scenario.  I believe they feel as though they have enough members of the Senate and House in their pockets to shield them.

However, Bank of America didn’t count on Andrew Cuomo.  He is a bull dog when he gets his teeth into a suit like this and he will not just walk away with a pittance as a settlement.  The Democratic AG is widely expected to run for Governor of New York.  If he is going to run, putting the bank and the executives who are so unpopular in the dock and squeezing them hard will only burnish his already formidable credentials.

I really don’t think politics is the most important consideration for Cuomo.  He has always seemed to take the law and the courts seriously and he really doesn’t like the big guy putting it to the little guy by breaking  laws then trying to use other laws as cover.  But, no matter what, this is a complicated case and could stretch on for quite awhile.

From the New York Times:

The legal drama surrounding the controversial takeover of Merrill Lynch by Bank of America, one of the pivotal moments of the financial crisis, took a fresh turn on Thursday as the attorney general of New York leveled civil fraud charges against Kenneth D. Lewis, the former Bank of America chief who masterminded the deal.

But no sooner did that news break than the Securities and Exchange Commission announced that it had struck a new, $150 million deal with Bank of America to settle its own cases involving the merger. Moments later, North Carolina’s attorney general announced that his office also had reached a settlement.

The developments open several new fronts in one of the most closely watched legal battles in American finance — one that now pits Wall Street enforcers against each other.

Andrew M. Cuomo, New York’s attorney general, is upping the ante in a match against Mr. Lewis and Bank of America. The S.E.C., however, is eager to put the matter to rest after suffering embarrassing setbacks in its case. Bank of America insists its executives did no wrong, although it, too, wants to put the case behind it.

Read the rest here.

Now, according to The Daily Beast, former Bank of America CEO Ken Lewis is saying if he goes down in this he is going to take former Bush Administration Treasury Secretary Hank Paulson and current Federal Reserve Chairman Ben Bernacke with him.

From the Daily Beast:

In defending former Bank of America CEO Ken Lewis against charges that he misled investors, his lawyers will call as witnesses former Treasury Secretary Hank Paulson and the current Federal Reserve Chairman Ben Bernanke, according to people close to the matter. The defense team, led by former U.S. Attorney Mary Jo White, hopes to get Paulson and Bernanke to reveal that Lewis did not mislead the government about BofA’s deteriorating financial condition in the aftermath of its Merrill Lynch deal. Those losses prompted a massive government bailout.

White’s first order of business is to get the civil case dismissed, according to several sources. But if she’s unsuccessful, she plans a vigorous defense, including calling high-level government officials to testify. “If this thing goes to trial you can expect both Paulson and Bernanke to be on the witness list,” said one person close to the defense team, “and right now Lewis doesn’t want to settle.”

Read the rest here.

Ladies and Gentlemen, I think this may be the time to make preparations for making lots of popcorn.  This could prove to be quite a show.

Pop up some fresh corn and sit back to enjoy the show as New York goes after Bank of America.