The mysteries of the Bank of America, Merrill Lynch deal

The substance of Timothy Mayopoulos' testimony before the house panel was overshadowed somewhat by the disgust the Congressmen displayed for Brian Moynihan, who did not come off as credible and may have hurt his chances to run the bank. Mayopoulos was the general counsel who was fired so that Moynihan could take his job--at least that's what we were lead to believe.

But Mayopoulos' testimony offered the clearest picture of exactly why Bank of America did not disclose the massive losses at Merrill Lynch to shareholders. There were four reasons, notes the New York Times: 

1) There was no previous statements, so there was nothing to update.

2) People should have been expecting big losses.

3) The proxy had warned of possible adverse conditions, though the Times could not find a specific warning in the risk factors section.

4) People should have know the industry was in turmoil and the impact would be broad.

That was the legal reasoning. Does it make sense? There are other mysteries to be sure, including why Mayopoulos was fired.

For more:
- here's the article