New York's Cuomo files fraud charges against BofA over Merrill deal

New York attorney general Andrew M Cuomo, joined by special inspector general for the Troubled Asset Relief Programme (TARP) Neil Barofsky, yesterday filed a lawsuit against Bank of America (BofA), its former CEO Kenneth D Lewis, and its former CFO Joseph L Price for duping shareholders and the federal government in order to complete a merger with Merrill Lynch.

 According to the lawsuit, Bank of America's management intentionally failed to disclose massive losses at Merrill so that shareholders would vote to approve the merger.

Once the deal was approved, Bank of America's management manipulated the federal government into saving the deal with billions in taxpayer funds by falsely claiming that they would back out of the deal without bailout funds, a statement issued by the attorney general's office said.

''This merger is a classic example of how the actions of our nation's largest financial institutions led to the near-collapse of our financial system,'' said Cuomo.

''Bank of America, through its top management, engaged in a concerted effort to deceive shareholders and American taxpayers at large.

This was an arrogant scheme hatched by the bank's top executives who believed they could play by their own set of rules, Cuomo said adding that the bank has committed an enormous fraud and American taxpayers ended up paying billions for Bank of America's misdeeds.