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Kai Ryssdal: We are going to go back in time a little bit today. To last December and a meeting between Bank of America CEO Ken Lewis, Fed Chairman Ben Bernanke, and then Treasury Secretary Henry Paulson. They were discussing B of A's pending acquisition of Merrill Lynch. Lewis was apparently having second thoughts about the deal. Because according to testimony from Lewis that was released today by New York State Attorney General Andrew Cuomo, Paulson and Bernanke leaned on him pretty hard to get with the program.

So far it's very much a yes-you-did, oh-no-I-didn't story. But Marketplace's Steve Henn reports that what was said is part of a much bigger issue.

STEVE HENN: If Henry Paulson and Ben Bernanke really told the CEO of Bank of America to keep quiet about losses at Merrill Lynch, they were probably breaking the law. That's according to Lynn Turner, former chief accountant at the SEC.

LYNN TURNER: If these allegations are proven true, both Bernanke and Paulson should be prosecuted by the SEC to the fullest extent of the law.

Paulson told investigators that he threatened to have Ken Lewis fired but that he didn't instruct Bank of America to withhold material information. Ken Lewis says he did.

This isn't the only time officials have allegedly pressured companies concerning SEC disclosures. Regulators reportedly leaned on Freddie Mac executives not to reveal that an administration foreclosure prevention program could cost the company $30 billion. John Coffee, a securities expert at Columbia University, says there's an inherent problem when firms are privately run in name only.

JOHN COFFEE: I'm afraid that produces these kinds of very difficult kinds of shadow governance regimes.

And pressures on management to do things to do things government wants. Things like preventing foreclosures or stopping financial meltdowns. Which is why Coffee says...

COFFEE: At the same time we need an independent agency that will protect investors and try to make certain that they do get full and fair disclosure.

That agency is supposed to be the SEC. But when regulators pushed Bank of America to buy Merrill Lynch, the SEC was kept in the dark.

In Washington, I'm Steve Henn for Marketplace.