BoA knew of Merrill losses in November: Report
Bank of America was aware of losses at Merrill Lynch more than a month before it went to US regulators for help completing its takeover of the firm, Bloomberg reported on Tuesday, citing documents.
New York: Bank of America Corp was aware of losses at Merrill Lynch & Co more than a month before it went to US regulators for help completing its takeover of the firm, Bloomberg reported on Tuesday, citing documents provided to congressional investigators.
Congress and various regulators have accused Bank of America of failing to adequately disclose various details about the Merrill merger to investors. These included the USD 3.6 billion of bonuses it let Merrill pay, even as that company was on its way to a USD 15.8 billion fourth-quarter loss.
According to the Bloomberg report, Bank of America Chief Accounting Officer Neil Cotty sent an email to Chief Financial Officer Joe Price on November 5 that included Merrill`s October financial report. The email included estimated markdowns and "other larger items" of USD 5.3 billion, Bloomberg reported.
Bank of America turned over the documents to federal regulators and a House of Representatives oversight committee after waiving attorney-client privilege earlier this month.
The bank did not tell regulators that the takeover was troubled until mid-December and did not disclose the losses to shareholders before their December 5 vote on the Merrill Deal.
Bank of America announced its USD 50 billion buyout of Merrill in September 2008 at the height of the financial crisis. The bank could not be reached for comment.