While a number of other banks and brokerages have settled charges that they improperly marketed auction-rate securities, Bank of America (NYSE: BAC) has been a bit of a hold out. Pressure from government legal authorities is charging that the NY State Attorney General has been especially forceful in trying to bring the big financial services firm to its knees.
The question is why BAC has taken so long. A number of other companies got this issue behind them weeks ago. According to Reuters, most firms in the industry "agreed to buy back a total of at least $44 billion of the securities from individuals, nonprofits and small businesses."
Regulators love making "examples" of corporations who move slowly on big industry settlement talks and Bank of America is risking penalties and sanctions by being one of the last to the negotiating table. It is not likely to do shareholders any good if the firm gets to be the poster boy for a government crackdown on auction-rate bad behavior.
Bank of America should have settled when its peers did.
Douglas A. McIntyre is an editor at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
9-05-2008 @ 3:14PM
Dana Pierson said...
Why are so many people surprised by the shenanigans of these large corporations in this country. Somehow we have learned to believe that these are 'benevolent dictatorships', destined to operate for the benefit of the general public. AND, thereby, operating in an open honest manner will allow ALL to benefit. They are operated on the premise that 'more is better' and that 'greed is good'...never mind the 'morality' or 'Christian value' of their beliefs. The American public needs to wake up to the fact that though we live in a Democrat Republic, corporations are nothing more than dictatorships guided by greed and only interested in their 'brokerage' power in Washington D.C to influence their wish for 'laissez-faire' business climates....which Republicans are more than happy to accomodate while they dine on Lobster and fine wines with their lobbyists.
Free enterprise and capitalism are good things. And, allow the average man/woman in this country to start businesses and benefit from their profit and hard work. But, corporations are conglomerates bent on the destruction of small businesses and absorption of markets all powered by greed. There is no guarantee that the United States should allow these corporations to operate willy-nilly without regulation or guidelines. It is time we woke up and put the brakes on this greed factor and return these large conglomerates to responsible citizens and the patriots they claim to represent.
9-05-2008 @ 3:46PM
bill said...
bank of america is the biggest crook of all in my opinion. no one even comes close to them.