Cuomo's complaint, filed Thursday in state Supreme Court inManhattan, charges that BofA hid Merrill's "staggering losses" thathad reached $16.2 billion by the time shareholders voted inDecember 2008 to approve the merger. Following the shareholders'approval, BofA's management then manipulated the federal governmentby falsely claiming that they would back out of the deal through aclause in the merger agreement unless they received billions ofdollars in Troubled Assets Relief Program funds, according to thecomplaint.

"This was an arrogant scheme hatched by the bank's topexecutives who believed they could play by their own set of rules,"Cuomo says in a statement. "In the end, they committed an enormousfraud and American taxpayers ended up paying billions for Bank ofAmerica's misdeeds."

A BofA spokesman tells that the bank is"disappointed" that Cuomo filed the charges, "which we believe aretotally without merit. The evidence demonstrates that Bank ofAmerica and its executives, including Ken Lewis and Joe Price, atall times acted in good faith and consistent with their legal andfiduciary obligations. In fact, the SEC had access to the sameevidence" as the New York AG, but reached the conclusion "thatthere was no basis to enter either a charge of fraud or to chargeindividuals. The company and these executives will vigorouslydefend ourselves."

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.