Wednesday, September 9, 2009

One Bad Deed Deserves Another

The aftermath of the Bank of America/Merrill Lynch deal has gotten very little press since Ken Lewis' Washington hearings. The travesty continues today, as chronicled in the Financial Times.

The short story goes like this: as the deal was about to close, not-so-careful inspection of the books by BofA execs revealed that Merrill's balance sheet was unraveling quickly. BofA considered backing out of the deal, may or may not have been coerced by Uncle Sam to go ahead with it, but in any case didn't tell shareholders what a mess they were overpaying for.

Very poor performance by BofA execs. The result? The SEC required BofA shareholders, not execs, to pay $33 million in damages. Now NY Attorney General Andrew Cuomo is considering taking more money from BofA shareholders in exchange for the misdeeds of Ken Lewis et al.

Bad stuff.


Underwriters Morgan and Goldman announced the IPO for A123 Systems, Inc. today. Does this mean we have officially run out of decent company names?

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