|  | | 2009 News and Press Releases | | |
HEADLINE NEWS:
Bank of America Waives Attorney-Client Privilege, The Agreement With The Securities And Exchange Commission Could Portend Tougher Investigations Of Corporations.
Marie Leone
CFO.com. October 13, 2009
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EXCERPT: When executives read about how Bank of America is waiving its right to attorney-client privilege to cooperate with government investigations into its merger with Merrill Lynch, they will feel as though they are having a flashback to 1999. That was the year that then–Deputy Attorney General Eric Holder released his stunning "Holder Memorandum" to an onslaught of sharp criticism from the legal and corporate communities. Written under Attorney General Janet Reno during the Clinton Administration, the Holder memo laid out factors that federal prosecutors should consider when deciding whether to levy criminal charges rather than civil charges against corporations, recalls litigation attorney Sara Shanahan, a partner at Sherin and Lodgen. "We all know what can happen in criminal prosecutions," adds Shanahan, referring to Arthur Andersen, which surrendered its license to audit public companies after it was found guilty of criminal charges related to how it handled the Enron audit. According to the Holder memo, a prosecutor can look at several factors to determine whether a company is giving its full cooperation to the government. These factors include whether the company has waived its "attorney-client and work product protection" as well as whether it has provided timely and voluntary disclosures of wrongdoing. The memo, says Shanahan, put pressure on companies to waive their legal rights. In return, they hoped to get lenient treatment from prosecutors. On Monday night, Bank of America agreed to hand over to the Securities and Exchange Commission and other government arms documents related to the legal advice BofA received in connection with its merger with Merrill Lynch last year. The SEC is investigating whether BofA executives knew about the massive losses at Merrill before it merged with the brokerage house and whether the bank misled investors by withholding that information. |
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