Another headache from the financial crisis is flaring back up for Bank of America Corp.
New York state Attorney General Eric Schneiderman has issued subpoenas seeking new depositions from the Charlotte, N.C., bank's chief executive and other current and former executives, according to people familiar with the situation.
The subpoenas are a sign that Mr. Schneiderman, who became New York's top law-enforcement official this year, doesn't intend to drop the civil-fraud investigation of Bank of America begun more than a year ago under predecessor Andrew Cuomo.
Read on.From the WSJ:
The attorney general's office and Bank of America have clashed recently about how to proceed in the Merrill case. In court filings, Mr. Schneiderman's office said it intended to begin its depositions, but Bank of America asked a judge to delay any depositions until the attorney general produced certain documents disclosing communications between employees who worked with Mr. Cuomo and outside parties.
Last week, New York state Supreme Court Judge Bernard Fried ruled that Mr. Schneiderman must hand over the documents requested by Bank of America, describe the parameters of the search for the documents, and list any documents not produced on grounds of privilege. The judge also ruled that depositions wouldn't begin for 90 days.
Pressure from U.S. regulators contributed to Bank of America's decision to buy Merrill as the firm teetered in 2008. The deal was struck the same weekend that Lehman Brothers Holdings Inc. tumbled into bankruptcy.
The legal friction with Mr. Schneiderman is the latest reminder that Bank of America is a long way from shedding legal and financial wreckage of the crisis. The bank's 2008 takeover of mortgage lender Countrywide Financial Corp. culminated in this week's $8.5 billion settlement with holders of mortgage-backed securities issued by Countrywide.
Last week, New York state Supreme Court Judge Bernard Fried ruled that Mr. Schneiderman must hand over the documents requested by Bank of America, describe the parameters of the search for the documents, and list any documents not produced on grounds of privilege. The judge also ruled that depositions wouldn't begin for 90 days.
Pressure from U.S. regulators contributed to Bank of America's decision to buy Merrill as the firm teetered in 2008. The deal was struck the same weekend that Lehman Brothers Holdings Inc. tumbled into bankruptcy.
The legal friction with Mr. Schneiderman is the latest reminder that Bank of America is a long way from shedding legal and financial wreckage of the crisis. The bank's 2008 takeover of mortgage lender Countrywide Financial Corp. culminated in this week's $8.5 billion settlement with holders of mortgage-backed securities issued by Countrywide.
Of course, at the bottom of the whole BofA-Merrill fiasco is none other than Hank Paulson who pressured Ken Lewis to take the deal or else. I hope Schneiderman look into the Countrywide-BofA deal and subpoena former Countrywide CEO Angelo Mozilo.
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