[ by Melanie Gretchen ] Bank of America's former CEO, Kenneth Lewis, may cost the bank more than the $150 settlement it paid to the SEC for its lack of crucial disclosures to shareholders who voted to acquire Merrill Lynch on 12/5/08.  [See What Went Wrong story, "BofA Shareholders Claim: 'Misled' by Former CEO Lewis."]  His admission that he kept loss projections by Merrill from BofA shareholders could prove "very damaging" to the bank and its retired CEO’s defense, a legal expert said. Tom Hazen, a securities law professor at UNC Chapel Hill, told the Charlotte Business Journal that Lewis admitting new numbers were not disclosed to investors is "very damaging to the case.  Court documents in a class action lawsuit show that during a deposition Lewis said he knew of larger than expected losses, the New York Times reported on Sunday.  Yet, the more accurate loss projects never got to shareholders before they voted on BofA’s Merrill Lynch purchase in late 2008. What's At Stake. While shareholders have suspected they didn't have all the facts heading into the vote, Mr. Hazen argues the Lewis admission directly opposes the bank's position that it did nothing wrong. "If he knew, then other people inside the company surely knew." -- Mr. Hazen. In the latest court documents, Lewis claims he followed legal advice by not disclosing the new loss projections to shareholders before they voted on the merger.  When asked by Steven Singer, a lawyer at Bernstein Litowitz Berger & Grossmann who represents the plaintiffs, during a 3/27/12 deposition, whether the figures shareholders received in BofA’s proxy remained accurate when stockholders voted, Lewis said, "They were not those numbers, no."

[C-I Note: With new of his latest admissions about the Merrill Lynch losses, Ken Lewis and his 'potty' mouth have reinforced the negative legacy that he has worked so hard to create these past several years.  Prime examples include acquiring Merrill at an inflated price, and acquiring Countrywide Financial, the financial institution that churned out sour mortgages - which has cost Bank of America billions upon billions - and the number keeps rising.  Mr. Lewis's dreams of grandeur were out of his reach, but that never stopped Lewis from trying to build the biggest financial empire in the United States - even if it meant destroying the integrity and foundation of a one-time excellent bank.]

For further details, go to [The Business Journals, 6/4/12].