The New York Times’ Gretchen Morgenson reported yesterday that shareholders are accusing former Bank of America CEO Ken Lewis of lying to them about their exposure to losses stemming from its acquisition of Merrill Lynch in late 2008, citing court documents.
“Sworn admissions leave no genuine dispute that his statement at the December 5 shareholder meeting reiterating the bank’s prior accretion and dilution calculations was materially false when made,” the filing, submitted yesterday in private litigation in Federal District Court in Manhattan, state.
Mr. Lewis conceded that before BofA stockholders voted to approve the Merrill deal, he had received loss estimates “far greater than reflected in the figures that had appeared in the proxy documents filed with regulators,” Morgenson writes.
“Shareholders rely on statements made in proxy filings to decide whether to approve transactions their companies have proposed, and companies must disclose all facts that could be meaningful for shareholders trying to decide how to vote on a deal,” she writes.
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