Timothy J. Mayopoulos was the general counsel for Bank of America (B of A) until shortly before its merger/acquisition of Merrill Lynch was approved by B of A shareholders. Mr. Mayopoulos was fired from his position on the day he met with the board and the board was told that Merrill Lynch had heretofore undisclosed losses that had not been disclosed to B of A shareholders. He was escorted out of the Charlotte, North Carolina, B of A headquarters by security person-nel and was not permitted to return to his office and collect his belongings. The merger was approved and the shareholders brought suit for the banks failure to disclose the full scope of the Merrill Lynch losses.Mr. Mayopoulos gave testimony to New York Attorney General Andrew Cuomo, the official who had been inves-tigating whether information about the scope of the losses was withheld prior to the shareholder vote on the Merrill Lynch merger/acquisition. Mr. Mayopoulos, however, declined to disclose to Mr. Cuomos office the content of the advice he gave to the bank, citing legal ethics rules.Mr. Cuomo asked B of A to waive the privilege because its refusal was hindering his offices ability to investigate what happened in the days leading up to the merger/acquisition. B of A initially refused to waive its attorneyclient privilege. However, when an SEC investigation began, the bank waived the privilege and then settled the SEC case for a $150 million fine. The shareholder litigation is ongoing.B of As then CEO, Kenneth D. Lewis, testified that Mr. Mayopoulos was fired because B of A had more execu-tives than it needed following the merger.Mr. Mayopoulos went on to become general counsel for Fannie Mae, and ultimately, its CEO, but, in an ironic note, Mr. Mayopoulos still resides in Charlotte, North Carolina on the same street as Mr. Lewis. The neighborhood block parties during the summer of 2009 must have been tense.

What is the lawyerclient privilege and when does it apply? Does it apply to general counsel as well as to outside counsel? When is the privilege waived? Why do you think Mr. Mayopoulos stood so firm on his refusal to answer questions about what happened in the days leading up to the merger and his termination? What do you think really happened in the lead-up to the merger?