Served with a subpoena to testify before the House, of course. I don't even want the mental image of Chairman Bernanke dancing (for those who do want the image, I've include a video clip of what I expect it would be like).
From the House Oversight and Government Affairs Committee
House Oversight and Government Reform Committee Chairman Edolphus Towns (D-NY) and Ranking Member Darrell Issa (R-CA) today agreed to have a subpoena served on the Federal Reserve (the Fed) to compel it to turn over documents related to Bank of America’s acquisition of Merrill Lynch.
The full committee and Domestic Policy Subcommittee, under the leadership of Chairman Dennis Kucinich (D-OH), have been investigating the circumstances surrounding the federal government’s bailout of the Bank of America-Merrill Lynch transaction.
Yes, that's not a typo. Dennis Kucinich is indeed showing leadership.
So, for that matter, is Chairman Towns. One of the few downsides of Henry Waxman ousting John Dingell as chairmanship of the House Energy Committee is that he's no longer chairing the Oversight Committee, but it seems Mr. Towns is no slouch himself.
As you may recall, during the Wall Street collapse, specifically the day of the Wall Street collapse, the Federal Reserve orchestrated a deal which had Bank of America purchase Merrill Lynch.
The acquisition came at the end of a historic weekend in New York. Senior federal officials and Wall Street executives cloistered themselves at the Federal Reserve Bank of New York and urgently discussed how to minimize the damage to global financial markets from the looming bankruptcy of investment bank Lehman Brothers.
Merrill Lynch's chief executive, John Thain, had been among the Wall Street chieftains who had been summoned to the extraordinary session to help fashion a rescue for Lehman. But as the weekend went on, it became increasingly clear that Merrill Lynch could be badly injured by a Lehman bankruptcy and needed to find its own way to ride out the gathering storm.
Initially, Bank of America had been a leading suitor for Lehman, but backed out after federal regulators refused to put government money behind the deal.
As you may recall, (and I'm not implying anything here, partly because I have not been following this as closely as I should and thus don't feel comfortable making any implications) the chairman of the New York Fed at the time was Treasury Secretary Tim Geithner.
But again, that may be irrelevant. What's not irrelevant, though, is that after shareholders approved the merger , which went through on January 1st, 2009.
In February, Bank of America CEO testified things may not have been quite 'right' in regards to the acquisition
Bank of America Corp CEO Kenneth Lewis testified under oath that Federal Reserve Chairman Ben Bernanke and then-Treasury Secretary Henry Paulson pressured him to keep quiet about losses at Merrill Lynch & Co, which the bank was buying, the Wall Street Journal reported.
Testifying before New York Attorney General Andrew Cuomo in February, Lewis said "it wasn't up to me" to reveal Merrill's fourth-quarter losses as they were becoming apparent in December, the newspaper said, citing a deposition transcript.
Bernanke of course denied this, saying, "I absolutely did not in any way ask Mr. Lewis to obscure any disclosures or fail to report information he should be reporting." However, rare is the time when someone confirms allegations at the start.
The House has tried to get documents on the deal, but Bernanke has so far refused to hand over documents voluntarily. This subpoena will require him to do so.
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As promised, what I think Ben Bernanke would look like dancing.