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September 22, 2009

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House looks for Merrill answers

A UNITED States House of Representatives panel has told Bank of America Corp that it cannot use attorney-client privilege to withhold from Congress details on its purchase of Merrill Lynch, The New York Times reported yesterday.

The chairman of the House Committee on Oversight and Government Reform, Representative Edolphus Towns, gave the bank a noon deadline yesterday to provide answers and legal documents about the merger, the Times said.

The bank late on Saturday asked Towns for a delay until after today. But a spokesman for Towns said on Sunday that he was sticking to the deadline, the newspaper reported.

Compliance with the panel's request would force Bank of America to reveal information that would affect a range of other investigations into the merger, the report said.

In a sternly worded letter last Friday, Towns, a Democrat, said the bank must divulge when it became aware of the enormous losses at Merrill last year, when it received a commitment from the federal government for a second round of bailout money and what legal advice its management received about whether it had to disclose those developments to the bank's shareholders, the Times reported.

Bank of America has been subject to a wave of civil litigation since it purchased Merrill Lynch on January 1.

The Securities and Exchange Commission and the attorneys general of New York and North Carolina are investigating whether Bank of America failed to disclose to shareholders Merrill Lynch's operating losses and bonus payments before the merger was approved.

The Charlotte Observer reported last Friday that the US Department of Justice and Federal Bureau of Investigation were conducting a criminal probe in the case.


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