By Dan Ferris in the S&A Digest:

So much for the oft-touted regulatory principle of full disclosure. Turns out Hank Paulson and Ben Bernanke aren't crazy about full disclosure when it reveals the huge cracks in the banking system.

Earlier this year, Bank of America CEO Ken Lewis testified under oath before New York Attorney General Andrew Cuomo that Paulson and Bernanke told him to keep quiet about the huge losses at Merrill Lynch (although Lewis denies the losses were at issue). Highlights from the testimony published in the Wall Street Journal reveal how Paulson tried very hard to work around the rules that would have required disclosure.

I've been telling you over and over again to avoid investing in big banks because nobody inside or outside the companies knows what they're worth. When you've got the secretary of the Treasury behind the scenes trying to hide important information from Bank of America shareholders... how can you ever expect to know enough to buy Bank of America shares?

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More posts on banks and the boondoggle:

New report reveals Feds forced Bank of America to keep quiet on boondoggle

Hank Paulson is either stupid or criminally negligent, Part II

Jim Rogers' No. 1 trade right now