The merger and acquisition by Bank of America with and of Merrill Lynch has drawn scrutiny from several points of the compass. One was a rejected Consent Settlement Judgment engineered between the Securities and Exchange Commission and Bank of America; another is an inquiry by the Office of the New York Attorney General; and a third is the U.S. House Committee on Oversight and Government Reform. Of these, the most reported recently have been the first and the last, the proposed SEC-BOA Consent Judgment rejected by a United States District Judge, and the refusal of BOA to turn over documents tending to reflect conversations it had with its attorneys, or that Merrill Lynch in turn had with its attorneys, before and during the merger and acquisition in which BOA ended up with Merrill Lynch.
In each proceeding to date, BOA has reportedly stood by its invocation of Attorney-Client Privilege. At the same time, in each proceeding to date BOA has also reportedly blamed its lawyers for a number of issues. The legal proceedings are addressing, in varying degrees, issues including (1) when BOA officials first became aware of Merrill Lynch's losses in 2008, particularly whether that date was before or after the Federal Government guaranteed BOA a second round of Federal Taxpayer Money for BOA's second bailout and (2) what advice was given to BOA by its lawyers when BOA both told its shareholders that BOA would review any bonuses Merrill might try to award to Merrill's officials, and did not tell its shareholders that Merrill had already paid those bonuses. See Louise Story, "A Standoff Over Attorney-Client Privilege" p. B1, col. 2 (New York Times Nat'l ed., "Business Day" Section, Monday, September 21, 2009), for some reason given a different headline Online, as "Congress Presses for Details From Bank of America on Talks".
If BOA is defending itself on the ground that it relied on the advice of its counsel in regard to these matters, then it would be opening up discovery of that advice. If BOA were a Defendant in a Bad Faith case, among other kinds of cases for example, that would be the likely ruling.
BOA, however, contends that it is not relying on a defense of advice of counsel, although BOA also contends that its officials did rely on the advice of its counsel, in simple terms. In the SEC proceeding, this did not wash. The Federal Judge rejected the proposed SEC-BOA Consent Judgment in that proceeding partly because it is "simply an evasion" for BOA to claim that it is not relying on a defense of advice of counsel while invoking the Attorney-Client Privilege in its continuing refusal to provide information and documents. Download Securities and Exchange Commission v. Bank of America Corp. (S.D.N.Y. Opinion Filed September 14, 2009), at 5 & 9 n.3.
Similarly, BOA has refused to provide information and documents to the U.S. House Committee that reflect discussions with and advice from BOA lawyers and BOA officials that would in essence reveal who at BOA knew what, and when did they know it. Reportedly, BOA relied on a bill that was rejected by Congress when BOA argued to the House Committee in response to the request for documents, that it should be able to raise the Attorney-Client Privilege against a Congressional investigation. BOA cannot raise the Attorney-Client Privilege as a reason to refuse to provide the U.S. Congress with documents requested during a Congressional investigation, if settled law is to be followed. Louise Story, "A Standoff Over Attorney-Client Privilege," New York Times, supra.
Parenthetically, making an argument based on a bill that was rejected, seems similar to making an argument based on a dissenting opinion in a case which is dead against your client's position. It is puzzling, at the least, why any advocate would apparently highlight the weakness of that position by calling attention to the prevailing authority which is directly against the client's position in the matter.
Withholding many documents did not prevent BOA from dumping on the House Committee large numbers of other documents which have nothing to do with the issues, in any event, according to this Press Release on Monday, September 21, 2009 from the House Committee on Oversight and Government Reform, "Bank of America Refuses Chairman Towns' Request for Key Documents/Bank Responds to Committee With Redacted, Irrelevant Documents". On the same day as this Press Release, it was also reported as 'news' that BOA's "chief marketing officer" would be meeting the next day with the Chair of the House Committee. Jonathan D. Salant and David Mildenberg, "Bank of America Agrees to Meet U.S. House Oversight Chairman" (Bloomberg.com, Monday, September 21, 2009).
Actually, the meeting between BOA's marketing official and the Committee Chair had been set for awhile. In fact, BOA asked that its response to the Committee's document request be delayed until that meeting. (Apparently, like all marketing personnel, BOA's marketing official has high confidence in her abilities to persuade.) The request was denied, it was previously reported. Louise Story, "A Standoff Over Attorney-Client Privilege," New York Times, supra. Still, it looks like BOA is going to get its meeting without producing any documents.
Time will tell how much more of its way BOA gets.
There is a series of posts on these issues on Insurance Claims and Bad Faith Law Blog, www.insuranceclaimsbadfaith.typepad.com, and particularly on the story of the SEC-BOA Consent Settlement Judgment as that story unfolded, beginning on August 11, 2009 and continuing on August 13, August 25, September 13, and September 14, 2009.
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