I looks like things are getting a little ugly in the corporate divorce between former Merrill Lynch CEO John Thain and Bank of America chief Ken Lewis.
Last week, Thain, who once was considered in some circles to be Lewis’ successor at BofA, resigned from his Merrill post amid reports that he awarded bonuses to himself and others at Merrill and ordered a cost renovation of his office before the merger between his troubled firm and BofA was completed.
An internal memo by Thain that was released today certainly gives the appearance that Lewis and other BofA execs weren’t that much in the dark regarding Merrill’s balance sheet and Thain’s other missteps during the merger of the investment bank with the nation’s largest commercial bank, according to a Wall Street Journal blog.
Maybe it’s an attempt by Thain to reverse the public damage he’s suffered to his reputation.
But it certainly increases the doubt that Lewis and BofA were completely blind to what was happening at Merrill in its final days of independence.
7 Comments
They are all crooks. Since we have nationalized BofA there is no reason for us not to fire all of them.
Looks like BoA didn’t do its due diligence very well, in its haste to grow into a bloated financial supermarket like Citi. Now BoA is crying and needs more taxpayer money to save itself. Is there no bottom to the pit? These executives should be punished for the greedy blindness that drove their extreme risk-taking. We should create a way to protect those with relationships with this bank, one of the most poorly managed banks in the world’s history, divvy up what paltry net assets BoA has left, and let BoA die the natural death it deserves.
Well said inquisitive.
I’m a bit apprehensive to place all the blame at BOA’s feet on this. As CEO of Merrill, I believe Thain outright lied and misled on numerous occasions, with the biggest whoppers stated when the television lights were on him. I fully expect an investigation and prosecution for Thain.
BOA had very limited time to perform due diligence, and were being strong-armed by Treasury to do this deal. I would imagine a considerable amount of trust would have been placed in the words of Mr. Thain.
BofA executives knew or should have known what they were buying. While it is likely true that Thain lied to them it was their job to investigate beyond just his claims. For them to claim ignorance is a statement that they are incompetant. So, we have a Hobbs choice: BofA management is either clueless or they are crooked. Either way they need to be fired.
What is not said here is that BOA tried to walk from the merger. What is now known is that the Treasury pushed for the merger to go through by gauranteeing bad assets to push for the merger. What is also known is that Thain made bonuses available to executives after the merger go ahead was pushed through. Lewis could not reverse the bonuses because they were done by Merrill’s Board and by Thain. Atty. General Cuomo may have the final say on this act and hopefully get the money back.
Audit the lot of them, and see where they’ve been making their political donations, and garnering favor in congress.