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BofA's Ken Lewis "Has Bigger Problems" Than Paulson Affair, Alpert Says

Posted Jul 16, 2009 05:33pm EDT by Aaron Task in Newsmakers, Banking
Related: BAC, XLF, SKF, FAS, FAZ, ^DJI, ^GSPC
Ben Bernanke was the big winner of Hank Paulson's Congressional testimony Thursday, says Dan Alpert, founder of the boutique investment bank Westwood Capital.

In addition to defending as "appropriate" his own handling of talks with Bank of America's Ken Lewis over the Merrill deal last year, the former Treasury Secretary defended Bernanke by declaring he wasn't acting on the Fed's behest. That's big news because Bernanke may have been as much of a target today as Paulson or Lewis. 

And while Bank of America shareholders may still be smarting over Ken Lewis' failure to disclose the heated talks with the government last year, the bank "has bigger problems than just this," Alpert says.

Specifically, Alpert referred to a Wall Street Journal story which revealed BofA is operating under a "memorandum of understanding" with the FDIC, which he describes as "a fairly big sanction."

Whether this will be a major issue on Bank of America's conference call Friday remains to be seen. But, once again, Ken Lewis has some ‘splaining to do.

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