Ken Lewis probe chairperson: Banks made ‘up rules as they went along’

Bank of America Corp. chief executive testified on Thursday before the House Committee on Oversight and Government Reform as they probed the bank’s purchase of Merrill Lynch.

Lawmakers grilled Lewis with questions for his alleged failure to comply with the government disclosure rules by not disclosing the mounting Merrill losses to his shareholders in November before shareholders were due to vote on the acquisition in December.

Gerry Connolly, Democrat of Virginia, as he read the December 30, 2008 board minutes from a special meeting BofA held, questioned Lewis why he failed to disclose the losses to shareholders then but instead wait until January to let them know.

Mr. Lewis responded saying there was no agreement at the time, just a commitment to work towards a solution. He also added that regulators wanted to announce everything at once, including the losses at Merrill and the government assistance, at the same time so as not to “spook the market.”

In closing, Mr Towns; committee chairperson, called for more transparency as he believed that regulators and the banks were “making up the rules as they went along.”