McCollum Pushing for Closer Review of Bank of America
Florida Attorney General Bill McCollum on Monday said he’s weighing whether to join a lawsuit against Bank of America for duping investors during its controversial takeover of Merrill Lynch in 2008.
Following up on actions last week by New York Attorney General Andrew Cuomo and a request from Chief Financial Officer Alex Sink, McCollum called on a top state finance official to brief the governor and cabinet Tuesday about possible legal action against the bank and its top executives.
McCollum sent a letter to Office of Financial Regulation Commissioner Thomas Cardwell asking Cardwell to report Tuesday on whether Florida can also go after the bank for fraud.
"I look forward to your explanation of OFR's perspective on Bank of America's acquisition of Merrill Lynch, including your description of your enforcement tools in relation to Bank of America, what remedies exist on behalf of Florida shareholders, and what you have done with your authority," McCollum, who is also a Republican candidate for governor, wrote.
Last week, Cuomo filed civil fraud charges against Bank of America alleging that former CEO Ken Lewis and others withheld information from stockholders during the takeover of Merrill Lynch, an event seen by some economists as a watershed moment in the financial crisis enveloping the nation.
Cuomo charged that Bank of America officials knew of Merrill Lynch’s precarious financial state and did not inform stakeholders. In August, the bank agreed to pay $33 million to settle Securities and Exchange Commission charges surrounding the $50 billion purchase. Lewis resigned in December.
On Friday, Sink, McCollum’s likely Democratic opponent should he win the GOP nomination, made a similar request. She applauded Cuomo’s efforts and asked the attorney general to determine if Florida could take action on behalf of the Florida Retirement System and citizens who suffered losses as a result of the alleged fraud.
In a statement, Sink also reiterated earlier calls for the State Board of Administration to pursue lawsuits against financial institutions if they have misled Florida’s pension fund.
The Bank of America scandal has already become political fodder in the gubernatorial campaign. Sink retired in 2000 as president of Bank of America’s Florida operations.
McCollum campaign manager Matt Williams on Monday dismissed Sink’s Friday statement as a public relations stunt:
“Alex Sink’s request for an investigation into former employer Bank of America – while shameless in its transparency as a politically-motivated exploit at taxpayer expense – is a clear sign she wishes to inoculate herself from her disastrous record as a banker that eliminated thousands of Florida jobs while raking in millions in salaries and bonuses,” Williams said in a statement.
Noting that the CFO was the first to call for a stricter review of Bank of America's impact on Florida pensioners, Sink campaign spokeswoman Conchita Cruz on Monday questioned the focus of McCollum's letter.
"I think the CFO last week was saying that `if the AG in New York could do this, why can't we do this here,'" Cruz said. "Now, he seems to be saying `me too, but not me.' That's not a very strong statement."