It all started during the financial crisis. Banks and brokerage houses were tumbling down one after another. One of the biggest was the collapse of Merrill Lynch. Bank of America (BAC) negotiated the purchase of Merrill, but there was one hitch. BofA failed to appraise its stockholders that Merrill had approved $5.8 billion in bonuses to Merrill employees.

The agreement was struck. Everything was kept under the table until the SEC started an investigation into the matter. The SEC is famous for just giving a slap on the wrist to the biggest offenders. In this case the SEC agreed that BofA should pay a measly $33 million fine.

Continue reading Judge Approves 'Half-Baked Justice' SEC Settlement with BofA

Judge Approves 'Half-Baked Justice' SEC Settlement with BofA originally appeared on BloggingStocks on Tue, 23 Feb 2010 10:40:00 EST. Please see our terms for use of feeds.

Continue reading CIT Group to Repay 'High-Cost' Debt

CIT Group to Repay 'High-Cost' Debt originally appeared on BloggingStocks on Tue, 09 Feb 2010 09:20:00 EST. Please see our terms for use of feeds.

Continue reading Closing Bell: Earnings Season's Tough Start (AET, AA, BAC, CVX, ERTS, KBH, HIG)

Closing Bell: Earnings Season's Tough Start (AET, AA, BAC, CVX, ERTS, KBH, HIG) originally appeared on BloggingStocks on Tue, 12 Jan 2010 16:00:00 EST. Please see our terms for use of feeds.

Were we all too fast to blame AIG (AIG)?

The insurance giant's role in precipitating the worldwide financial crisis has been covered at length since it teetered on the edge of disaster in September 2008, thanks to a series of high-risk transactions executed through its financial products group. Well, Goldman Sachs (GS), which has recovered quickly from last year's woes and is already figuring out how to pay some hefty bonuses, may have played a larger role in these transactions than everyone realized.

Continue reading Goldman Sachs had bigger role in AIG than realized

Goldman Sachs had bigger role in AIG than realized originally appeared on BloggingStocks on Mon, 14 Dec 2009 08:40:00 EST. Please see our terms for use of feeds.

Continue reading Former Bank of America director says give CEO job to insider

Former Bank of America director says give CEO job to insider originally appeared on BloggingStocks on Wed, 11 Nov 2009 15:00:00 EST. Please see our terms for use of feeds.

If you've become comfortable with the current state of the housing market ... don't. Economists at Goldman Sachs (NYSE: GS) and Bank of America's Merrill Lynch (NYSE: BAC) say there's still plenty of risk in the housing market.

Alec Phillips, the head of Goldman's Washington office, said, "The risk of renewed home price declines remains significant." His "working assumption" is a drop of between 5% and 10% by the middle of next year.

Continue reading Housing market to dip again next year; Goldman says by 10%

Housing market to dip again next year; Goldman says by 10% originally appeared on BloggingStocks on Tue, 27 Oct 2009 10:20:00 EST. Please see our terms for use of feeds.

Continue reading BofA unloads First Republic for $1 billion

BofA unloads First Republic for $1 billion originally appeared on BloggingStocks on Wed, 21 Oct 2009 17:00:00 EST. Please see our terms for use of feeds.

Continue reading Bank of America execs facing charges

Bank of America execs facing charges originally appeared on BloggingStocks on Mon, 14 Sep 2009 17:00:00 EST. Please see our terms for use of feeds.

We have another fly in the ointment. Judge Jed Ratkoff of federal district court refused to approve a $33 million settlement in the SEC vs. Bank of America Corp case.

In the complaint, the SEC had alleged that Bank of America Corp (NYSE: BAC) told investors in the proxy documents for the Merrill Lynch merger that Merrill agreed NOT to award year-end performance bonuses before the merger closed.

Continue reading Judge will not approve Bank of America, SEC settlement

Judge will not approve Bank of America, SEC settlement originally appeared on BloggingStocks on Thu, 06 Aug 2009 09:40:00 EST. Please see our terms for use of feeds.

An outspoken group of Bank of America (NYSE: BAC) shareholders has been calling for CEO Kenneth Lewis's head lately, with investors none too pleased by the bank's near-disastrous acquisition of Merrill Lynch. However, testimony is hitting Wall Street today that indicates Lewis was simply following government orders by keeping hefty losses at Merrill under wraps.

Lewis testified under oath before New York Attorney General Andrew Cuomo in February, asserting "it wasn't up to me" to disclose Merrill's fourth-quarter losses toward the end of 2008.

According to Lewis, Federal Reserve Chairman Ben Bernanke and former Treasury Secretary Henry Paulson pressured him to stay mum about Merrill Lynch's troublesome balance sheet. The regulators reportedly urged Lewis to proceed with the merger, warning that the deal's failure would "impose a big risk" to the nation's financial system.

Continue reading Was Bank of America's CEO intimidated by the feds?

Was Bank of America's CEO intimidated by the feds? originally appeared on BloggingStocks on Thu, 23 Apr 2009 11:00:00 EST. Please see our terms for use of feeds.

There's been no shortage of heartstring-jerking reports from the current economic crisis -- seniors whose retirement accounts have been wiped clean; families relocating from homes to motels; MBAs forced to wear their resumes on sandwich boards.

However, in my humble opinion, today's news might be the most pathetic: Sesame Workshop, the nonprofit organization that produces the classic Sesame Street TV show, is slashing 20% of its 355-member workforce.

Continue reading Wall Street takes its toll on Sesame Street

Wall Street takes its toll on Sesame Street originally appeared on BloggingStocks on Thu, 12 Mar 2009 11:40:00 EST. Please see our terms for use of feeds.

A report today in the New York Post suggests that shareholders are anxious to oust Kenneth Lewis, CEO of Bank of America Corporation (NYSE: BAC). The paper says that a group of angry investors, spearheaded by Jerry Finger, has compiled a list of demands to present at the bank's next annual meeting. Finger and his irate mob will request that the roles of CEO and chairman be split, and the outspoken investor said it's safe to assume that a brand-new chief executive is also high on his wish list.

Finger made headlines last month by filing a class-action lawsuit against B of A, alleging that its merger with Merrill Lynch failed to protect shareholders' interests. New York Attorney General Andrew Cuomo is now investigating that very same matter, and reports say that the AG may demand the return of $4 billion in bonuses to Merrill employees that were rushed through prior to the merger's completion.

Continue reading Will Bank of America shareholders show CEO Kenneth Lewis the door?

Will Bank of America shareholders show CEO Kenneth Lewis the door? originally appeared on BloggingStocks on Mon, 02 Feb 2009 12:30:00 EST. Please see our terms for use of feeds.

Continue reading Wall Street, 2009: Deaf, blind, and just plain dumb

Wall Street, 2009: Deaf, blind, and just plain dumb originally appeared on BloggingStocks on Fri, 30 Jan 2009 16:40:00 EST. Please see our terms for use of feeds.

Continue reading Wall Street has been strip mining America

Wall Street has been strip mining America originally appeared on BloggingStocks on Fri, 30 Jan 2009 15:25:00 EST. Please see our terms for use of feeds.

Continue reading Is John Thain being made the fall guy?

Is John Thain being made the fall guy? originally appeared on BloggingStocks on Wed, 28 Jan 2009 14:00:00 EST. Please see our terms for use of feeds.

An era of greed that began with the election of Ronald Reagan has come to an abrupt end. That means that the seething emotions of greed and envy that come along with bonus time at investment banks will have fewer dollars attached to them. And talent will flow to government and academia rather than Wall Street. This could be good for the U.S.

Some of those masters of the universe in the investment banking industry have seen the value of their stock tumble (and many of them are going without bonuses this year). Here are some of the "casualties":

Continue reading Masters of the universe take a pay cut

Masters of the universe take a pay cut originally appeared on BloggingStocks on Tue, 27 Jan 2009 11:40:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>bBACbailoutexecutive compensationexecutive payExecutiveCompensationExecutivePayfeaturedGSjohn thainJohnThainlloyd blankfeinLloydBlankfeinmerrill lynchMerrillLynchvikram panditVikramPanditwall streetWallStreetTue, 27 Jan 2009 11:40:00 ESThttp://www.bloggingstocks.com/2009/01/26/john-thain-to-repay-1-2-million-for-87-783-rug-and-other-offic/http://www.bloggingstocks.com/2009/01/26/john-thain-to-repay-1-2-million-for-87-783-rug-and-other-offic/http://www.bloggingstocks.com/2009/01/26/john-thain-to-repay-1-2-million-for-87-783-rug-and-other-offic/#commentsFiled under: Bank of America (BAC)

John Thain may look like superman, but he's only human. According to my brother William D. Cohan's article in Fortune, Thain contributed mightily to his efforts to get himself fired following the takeover of Merill Lynch by Bank Of America (NYSE: BAC). Now Thain is trying to salvage his reputation by offering to repay Bank of America for the $1.2 million he spent to decorate his office.

Thain's career suicide involved five key steps:

• Thain tossed out his Merrill deputies Greg Fleming and Robert McCann;
• He was late to disclose some $15.31 billion in trading losses that may have derailed the deal if they had been disclosed earlier;
• He took a year-end vacation at Vail and signed up for this week's Davos fest (against his boss, Ken Lewis's advice);
• He paid $4 billion in bonuses to Merrill workers before the deal closed -- although Bank of America knew about them so Thain should not get all the blame for these;
• He spent $1.2 million to redecorate his office.

Now Thain is going to try to partially reverse the damage from the last item in his career suicide process.

Continue reading John Thain to repay $1.2 million for $87,783 rug and other office decor

John Thain to repay $1.2 million for $87,783 rug and other office decor originally appeared on BloggingStocks on Mon, 26 Jan 2009 10:25:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>bacinthenewsmerrill lynchMerrillLynchthainMon, 26 Jan 2009 10:25:00 ESThttp://www.bloggingstocks.com/2009/01/22/thain-resigns-from-bank-of-america/http://www.bloggingstocks.com/2009/01/22/thain-resigns-from-bank-of-america/http://www.bloggingstocks.com/2009/01/22/thain-resigns-from-bank-of-america/#commentsFiled under: Bank of America (BAC), Headline News
Former Merrill Lynch CEO John Thain has resigned from his post at Bank of America (NYSE: BAC), not long after the consummation of a merger that threatens that company's very survival.

"Ken Lewis flew to New York today to talk to John" and "they mutually agreed that his situation was not working and he resigned," Bank of America spokesman Robert Stickler told The New York Times.

Ken Lewis was upset with Mr. Thain partly because the merger was a disaster and partly because he realized that Thain did not have a strong grasp of the company's operations. Worse, Thain had made earlier than planned bonus payments to Merrill Lynch employees shortly before the deal was done.

And all of this came before the news of Thain's wasteful spending on interior decor was made public.

There is one silver lining though. Bank of America's spokesman was honest enough to say that "things were not working out" instead of hiding behind the usual "He resigned to spend more time with his family and charitable endeavors."

Score one for transparency.

Thain resigns from Bank of America originally appeared on BloggingStocks on Thu, 22 Jan 2009 14:15:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>BACBank of AmericaBankOfAmericaJohn ThainJohnThainMerrill LynchMerrillLynchThu, 22 Jan 2009 14:15:00 ESThttp://www.bloggingstocks.com/2009/01/22/merrill-lynch-spent-1-22-million-redecorating-for-john-thain/http://www.bloggingstocks.com/2009/01/22/merrill-lynch-spent-1-22-million-redecorating-for-john-thain/http://www.bloggingstocks.com/2009/01/22/merrill-lynch-spent-1-22-million-redecorating-for-john-thain/#commentsFiled under: Scandals, Bank of America (BAC)

The Daily Beast (where I also write a column) columnist and CNBC reporter Charlie Gasparino reports that Merrill Lynch CEO John Thain spent $1.22 million to redecorate his office last year while the company slashed jobs and fought for its survival.

Citing documents obtained by the site, Gasparino reports that the company spent $800,000 "to hire famed celebrity designer Michael Smith, who is currently redesigning the White House for the Obama family for just $100,000."

I was going to make a reference to former Tyco CEO Dennis Kozlowski and the $6,000 shower curtain, but one of Gasparino's sources beat me to it. Thain's version of an emperor's office includes:

• Area Rug: $87,784
• Pair of chairs: $28,091
• Pendant Light Fixture: $19,751

Now, $1.22 million is not a material amount of money given the scope of Merrill's problems, but it is indicative of how out of touch and arrogant John Thain was and presumably is. The fact he spent $230,000 in one year on a single driver will also do little to muster political support for additional bailout initiatives, and gives a huge amount of ammunition to the "Tell Wall Street to go to hell" crowd.

Not a good move, Mr. Thain, not a good move. If he has any class he'll offer to reimburse the company for those expenses, but I doubt that he will. Even if he does, it's too late.

Merrill Lynch spent $1.22 million redecorating for John Thain originally appeared on BloggingStocks on Thu, 22 Jan 2009 13:01:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>BACBank of AmericaBankOfAmericainthenewsJohn ThainJohnThainMerrill LynchMerrillLynchThu, 22 Jan 2009 13:01:00 ESThttp://www.bloggingstocks.com/2009/01/15/will-bank-of-america-get-a-120-billion-bailout/http://www.bloggingstocks.com/2009/01/15/will-bank-of-america-get-a-120-billion-bailout/http://www.bloggingstocks.com/2009/01/15/will-bank-of-america-get-a-120-billion-bailout/#commentsFiled under: Bank of America (BAC)

That's right folks -- you're not the one who bought Merrill Lynch without doing any due diligence. But that doesn't mean you're not paying for it. Bank of America (NYSE: BAC) CEO Ken Lewis is the one who skipped that due diligence and now he's shocked to discover that Merrill Lynch is full of toxic waste. So he threatened to back away from the deal and guess who is stepping up? You are.

How much are you going to fork over so Ken Lewis can have his Merrill Lynch? You'll pay $20 billion for a capital injection and cover $100 billion in potential losses. To be more specific, a deal for the U.S. to invest $20 billion in Bank of America and to divide $118 billion in losses between Bank of America and the government is imminent. Bank of America would be responsible for the first $10 billion; the government would take on the next $10 billion in losses and then the government would absorb 90 percent of the next $98 billion. If this deal closes, the government will own $45 billion worth of Bank of America.

I find it interesting that $120 billion can go out of the taxpayer's pocket and into a bank's with the snap of a finger. By contrast, when the automobile industry wanted 10% of that amount we were involved in weeks of political wrangling, which ultimately resulted in a failed bill in Congress. And once again, it was us taxpayers who ended up forking over the money to bail out these big companies with their multimillion dollar management.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College. Portfolio published his eighth book, You Can't Order Change: Lessons From Jim McNerney's Turnaround at Boeing on December 26, 2008. He has no financial interest in the securities mentioned.

Will Bank of America get a $120 billion bailout? originally appeared on BloggingStocks on Thu, 15 Jan 2009 20:46:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>bank of americaBankOfAmericamerrill lynchmerrill lynch merMerrillLynchMerrillLynchMerThu, 15 Jan 2009 20:46:00 EST