Larry Summers, too.
They manifestly engaged in a conspiracy to puff up Bank of America stock. They deceived investors with a massive shell game designed to keep BAC afloat and strong enough to take on Merrill Lynch. Forget about any SEC charges against Ken Lewis or Brian Moynihan for misleading BAC investors. Clearly the entire point of government operations in the closing weeks of 2008 was to mislead the financial community, especially BAC shareholders.
Better still, the political appointees and operators at the top making the deal with Lewis, Moynihan, and BAC execs were moving at cross purposes to federal bank regulators charged with making sure BAC had the capital and liquidity required to function. You have to chuckle at BAC’s naviety through this process, however. They really, really thought their share price was gonna rocket up right in the middle of the financial meltdown of century just because the government said so.
As it turns out, things unfolded pretty much exactly as we imagined. Lewis thought he was doing another government-favored deal like Countrywide, one which would be smiled upon by the market and press BAC’s share price higher — just like all the umpteen deals before. Paulson and Summers — the brains behind this operation, such as existed — preyed upon Lewis’ pride and gullibility and Merrill’s desperation to drive this shotgun marriage to the altar. If they had to violate federal securities laws along the way, that was just collateral damage to America’s waning experiment with market democracy and the consent of the governed.
