Bank of America (NYSE: BAC) CEO Ken Lewis has very few supporters right now, with the inexplicable exception of the board of directors at his own company.
But don't worry, Ken: Analyst Richard X. Bove of Rochdale Securities is leaping to your defense.
"The politicians and the press are trying to get Ken Lewis fired for adding value to shareholders' investment," Mr. Bove wrote in an e-mail message to his clients. "In this new world where success should be punished this may be a new low point."
Dealbook has more from that e-mail note, but all of this begs the question: Is Mr. Bove on crack? At the beginning of 2007, shares of Bank of America were trading at more than $50 per share. In February of 2009, they crated to below $4 per share. With the help of government welfare that allowed one of the most powerful financial institutions in the world to avoid insolvency, the stock has rebounded to around $16 per share.
The market has brought Bank of America's stock up quite a bit from the depths it plunged to, but still, the notion that people are upset with Ken Lewis for adding value to shareholders' investment is possibly the dumbest thing I've heard in the past 24 hours. And when you follow financial news for a living, that's saying a lot.
And then there's the little matter of settling SEC charges of securities fraud with taxpayer money. There are few hard and fast rules in the world of corporate management, and I don't claim to have Mr. Lewis's expertise. But not committing securities fraud is one of them, and it's absolutely appalling that the board has allowed Lewis to stay in place with a track record of value destruction and SEC fraud charges.
It may well be that Ken Lewis is being unfairly scapegoated. But the notion that people are upset because he is adding value is absolutely insane.
Closing Bell: When We All Love the PIIGS (NBG, SQNM, PG, ERTS, KO)
Serious Money: Cheapest Stocks List Shrinks from 26 to 21
Chasing Value: Hasbro Earnings Makes My Point
Reader Comments (Page 1 of 1)
8-09-2009 @ 10:59AM
bob schick said...
zac, you are a fraud, a stupid greedy naked shortsellling fraud
8-10-2009 @ 10:13AM
rkj2 said...
I have to ask : is Zac Bissonnette on crack ??
Some serious lack of logic:
1/ Even if the price tanked, has the company during this crisis increased its future net worth or no ? If Mr. Zac is unable to comprehend that, what is the point of this article ?
2/ "....is possibly the dumbest thing I've heard in the past 24 hours. And when you follow financial news for a living, that's saying a lot." ....
Then perhaps Zac needs to give up this job since he is clearly no good at something being done for a living. If so arrogant and self-important is the assumption that by following financial news Zac knows a great deal or is right, did he see the crisis coming in end 2007 ? I don't think so .... so much for intelligence borne of following financial news A LOT !
8-11-2009 @ 7:40PM
jbs5533 said...
When is Paulson going to be held responsible for this? Everybody is dumping on Lewis and Paulson admits he put a gun to the guys head when he wanted out. The deal was not completed when Merrill gave out the bonuses, what was Lewis supposed do, he didn't have any authority.
Paulson let Lehman go under so his old firm Goldman could have less competiton. Goldman would be out of business if he didn't ball out AIG. Had he saved Lehman like he did Bear Stearns alot of the entire crisis could have been avoided.
8-23-2009 @ 8:05PM
Larry said...
Bank of America Executive offices
100 Tryon St.
Charlotte North Carolina 28255
RE: Predatory Bank of America practices
To The Policy Makers at B of A,
My name is Larry Brown and I hold a substantial position in Bank of America stock. I am also a Merrill Lynch and B of A client.
As a shareholder, I have a vested interest in B of A’s management making decisions that are not conspicuously foolish.
Last week I entered my local B of A branch to make a deposit and inquire about a charge on my checking account. I was told that the minimum requirement on my “free checking account” had been raised from $1,000 to $1,500. I told the bank manager that I had not been notified and she replied that notices went out but that they might have been mistaken for junk mail upon which I asked her to reverse the charge which she did.
It is my observation that raising the limit for checking at this point in time, during a recession, if not depression when so many Americans are struggling is a terrible public relations move and short sighted business sense. I am seriously considering closing all of my B of A accounts and moving my banking to Bank of the West where checking is still free. To me, that ten dollars is bad PR and a matter of principle but to many Americans it is two or three nights of food on the table and you are making a conscious choice to gouge.
I would also remind you that if it were not for the tax dollars of those you are gouging, you would have had to close your doors in bankruptcy, so given that you are living like vampires, on the blood of those who maintain your “undead” status, what you are doing is all the more despicable and treasonous.
If this situation is not rectified I will remove both my bank account from B of A and my life savings and investments from Merrill Lynch. I am almost even on my last B of A purchases and as soon as I can break even, I will sell my B of A stock because I believe your judgment to be very poor and your manner of doing business immoral and unconscionable. I am going to send a carbon copy of this letter to the Los Angeles Times and a copy of this email to every friend in my book and urge them to boycott B of A as well. I am considering organizing volunteers to spend an hour or two a day in front of my local branch pointing out your predatory practices to customers.
I would be glad to change my mind if you have the common sense to know that morality aside, the public is on a very short fuse and will see this as the treacherous exploitation it is. You will lose business with these slimy and unconscionable tactics.
Sincerely,
Larry Brown