Yesterday, the New York Attorney General’s Office stepped up pressure against Bank of America in a letter that alleged the bank and its lawyers are impeding the investigation of the BOA-Merrill Lynch merger through the "indiscriminate" use of attorney-client privilege.
Now, Bank of America’s outside counsel at Cleary Gottlieb Steen & Hamilton is firing back with a response, saying that lawyers for the bank have “repeatedly” asked—and been denied—to meet with the New York Attorney General’s Office to discuss the matters under investigation. Click here for a copy of Cleary Gottlieb's letter to the New York Attorney General's Office.
“Because Bank of America did not violate the law, it has not offered reliance on legal advice as a defense,” Clearly Gottlieb partner Lewis Liman wrote in a letter Tuesday to the New York Attorney General’s Office. Liman said the government’s letter contained “a number of spurious and false allegations.”
New York Attorney General Andrew Cuomo's office is looking at, among other things, whether bank officials failed to disclose to shareholders “cascading losses” at Merrill Lynch and the bank’s knowledge of that Merrill Lynch reportedly accelerated its bonus payments before the merger, according to the letter the New York Attorney General’s Office sent to Cleary Gottlieb.
In that letter, David Markowitz, chief of the attorney general’s investor protection bureau, said the Bank of America’s invocation of attorney-client privilege is hindering the investigation of the decision-making process at the bank to conceal information from shareholders on proxy documents.
“We are extremely surprised and disappointed by the letter for several reasons,” Liman, who practices in the firm’s New York Office, wrote in response to the AG letter. “We do not understand your Office’s apparent refusal to meet with Bank of America’s counsel and to hear Bank of America and Merrill Lynch’s side of the story, including why there is no basis for seeking to invade the attorney-client privilege here.”
Liman said Bank of America has been “cooperating extensively” with the investigation, and that waiver of attorney-client privilege is “not a necessary element of effective voluntary cooperation.” Justice Department guidelines on cooperation, among other policies, “uniformly admonish against seeking waiver of the attorney-client privilege in an investigation in all but the most extreme circumstances."
Bank of America has “spent thousands of hours and produced hundreds of thousands of documents in response” to the investigation, Liman wrote. The bank has made witnesses available. Senior management has testified. “Based on all of that evidence, we believe that the Proxy Statement and the other disclosures complied with all applicable laws, rules and regulations,” Liman said in the letter.