He and McColl made their names gobbling up and assimilating other financial institutions. It would seem to me that he didn't pay too much attention to the Due Dilligence phase when they were offered to step into the Merril Lynch deal. Once it was his, or he had committed B of A to the deal, I think he may certainly had an "OH SH!T!" moment.

What the general public doesn't know is that the governing agencies for these financial institutions, FDIC, OCC, NCUA, etc. basically allow a collection of the healthy banks to bid on the assets and liabilities of a failing institution. Information is distributed a week or so before the planned closure so the acquiring banks can perform due dilligence on what parts of the failing institution they want to take.

My guess is that Lewis thought, "What a nice feather to have in my cap, taking down Merril Lynch," and bid the buy at a price guaranteed to win it. His ego got in the way of reason. Ooops!