New York Attorney General Andrew Cuomo is considering whether to charge Bank of America Corp. executives, but the company’s invocation of attorney-client privileges is impeding his office’s investigation, according to a letter released Tuesday.
Cuomo’s office argued in its letter that Bank of America can’t say that it relied on advice from lawyers in making decisions related to last year’s acquisition of Merrill Lynch without revealing the substance of the advice.
The attorney general’s investigation focuses on at least four instances in late 2008 when he alleges Bank of America and its senior officers didn’t tell shareholders about important information — such as surging losses and big bonuses at Merrill — before they voted on the deal, the letter said.
“The facts of the cascading losses and bonus payments — and the facts of Bank of America’s senior executives’ knowledge of these events — are straightforward,” Cuomo’s office wrote. “However … the decision-making process by which Bank of America and its executives decided not to disclose these material facts to Bank of America’s shareholders has been hidden from our investigation by Bank of America’s repeated invocation of the attorney-client privilege.
“These invocations have been made even though Bank of America has offered reliance on legal advice as a justification for each of its failures to disclose,” the letter continued. “It is axiomatic, however, that the attorney-client privilege may not be used as both a sword and a shield.”
The attorney general’s office gave Bank of America until Sept. 14 to reconsider its position.
“Otherwise, we will proceed with our charging decisions without giving credit to the advice of counsel defenses that Bank of America has not permitted us to test,” Cuomo’s office added.
(c) 2009, MarketWatch.com Inc. Source: McClatchy-Tribune Information Services.