Former BofA CEO denies fraud allegations

24 August 2010

Ken Lewis, former chief executive officer (CEO) of the Bank of America (BofA) has denied allegations of fraud made against him in a civil lawsuit.

Legal action against Mr Lewis and Joe Price, BofA’s chief financial officer, has been taken by Andrew Cuomo, New York’s attorney general.

He claimed that the pair deliberately failed to inform shareholders of the financial instability facing Merrill Lynch before a vote on whether BofA should acquire the financial institution in 2009 occurred.

However, lawyers working for Mr Lewis claimed that the case presented by Mr Cuomo was “implausible” and “inconsistent”.

In the filing, Mr Lewis’ legal team said: “Some have looked to assign blame for every aspect of the financial crisis, even where there is no evidence of misconduct. This case is a product of that dynamic and does not withstand either legal or factual scrutiny."

The papers also described the merger as “an unmitigated financial and strategic success” for BofA shareholders.

Mr Cuomo’s law suit was originally filed in February of this year.

In previous action taken by the Securities and Exchange Commission, BofA paid a fine of $150 million for failing to make appropriate information available before the acquisition of Merrill Lynch went ahead.

By Jim Ottewill

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development