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Ken Lewis and customer service
One of the problems with big bank mergers, the kind Ken Lewis championed throughout his career as CEO, is the lack of concern about customer service.
Invariably, customer service at banks gets worse–and often more costly–the bigger a bank gets. And that certainly was the case with Bank of America.
My personal beef with BofA and its customer service concerns it ATMs.
I became a BofA customer after the Lewis-led bank bought FleetBoston Financial in 2004. (I became a Fleet customer when it acquired New Jersey-based Summit Bancorp in 2000–but that’s another story).
One good thing Fleet did with its ATM machines–in New Jersey, at least–was sell postage stamps. It was nice convenience and a customer perk that eliminated trips to the Post Office. Email may be king, but sometimes you still need to send an old-fashioned snail gram.
BofA’s lawyers are very busy indeed
Is that seat hot enough for you yet, Mr. Lewis?
The CEO of Bank of America has another legal headache, the Charlotte Observer reports. The Justice Department and the FBI in Charlotte, N.C., are investigating the bank’s star-crossed acquisition of Merrill Lynch. the paper says. The report has few details about the investigation, other than it has been under way for six months:
The FBI involvement opens up the possibility of criminal charges, although the scope and possible outcome of the probe remain unclear.
Come on Massey: man or mouse?
Bank of America’s settlement with the Securities and Exchange Commission sheds some light on the shambolic merger agreement the bank struck with Merrill Lynch last autumn, and how it neglected to inform its own investors of the monster bonuses it then allowed Merrill to carry off.
The word “allowed” is the mot juste here, by the way. The key schedule to the merger agreement (undisclosed by BofA but revealed by the SEC) makes it clear that BofA authorised what was in the end a payola of $3.6 billion in accelerated bonuses to Merrill bankers, 60 per cent of which was paid in cash.
John Thain was right
John Thain has been pilloried for the billions of dollars in bonuses paid to Merrill Lynch employees despite the firm’s $27.6 billion loss for 2008. He has taken the brunt of the criticism because Bank of America has said that the decision to pay $3.6 billion in Merrill bonuses before the end of the year, before the deal closed, was solely Thain’s. The former Merrill CEO has protested, telling the Wall Street Journal in April that “the suggestion Bank of America was not heavily involved in this process, and that I alone made these decisions, is simply not true.”
It turns out that true to his reputation as a straight-arrow Boy Scout, Thain was telling the truth. BofA was not forthcoming on the bonus process, according to the Securities and Exchange Commission, which says that the bank made “false and misleading statements” about bonuses in its joint proxy statement on the deal. The S.E.C.’s complaint, which BofA agreed to settle by paying a $33 million penalty, says:
Failing upwards at BofA
The ouster of Bank of America’s chief risk officer, Amy Woods Brinkley, should not cause anyone to shed any tears.
Even though Brinkley was one of the few top female executives working on Wall Street, her departure is well deserved and has nothing to with gender inequality in the world of finance as some might suggest.
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The Wall
