‘US Aid Will Boost Shares’
BoA emails claim US regulators told them its subsidised purchase of Merrill Lynch would ‘boost shares’.
“The chairman of the Federal Reserve indicated it [the Bank of America and government assisted purchase of Merrill Lynch & Co] would be structured in a manner such that BAC stock should go up when announced,” Chief Financial Officer of Bank of America Joe Price said in a December 29 e-mail to executives, according to report in Bloomberg. BoA had agreed to acquire broking firm Merrill Lynch after US regulators put up $20bn in fresh capital and agreed to provide $100bn in backstop loans and mortgage securities. But BoA’s shares nose dived following the deal as the market ‘attacked’ them, tumbling 47 per cent in six trading days.
