Breaking: Lewis throws Thain overboard…Thain ‘resigns by mutual agreement’ from Merrill/BoA…

…But can Ken Lewis survive the kerfuffle?? Full Disclosure, I am a Merrill, now BofA shareholder. So Thain helped Merrill survive in one sense and did his full fiduciary duty to Merrill *perhaps* by keeping it alive through the BofA merger…but did Ken Lewis do his FD by BofA shareholders? And what about due diligence on the deal in mid December when the losses started mounting?

Bank Of America Personnel

In this Sept. 15, 2008 file photo, Merrill Lynch Chairman and CEO John Thain, left, smiles as Bank of America Chairman and CEO Ken Lewis, speaks at a news conference in New York. Thain will remain with Bank of America after it completes its acquisition of his investment bank, and serve in a role similar to the job he's held at Merrill. He will oversee global corporate and investment banking and most of BofA's global wealth and investment management operations. (AP Craig Ruttle)

And no one will cover this, but I want to know, did BofA’s refusal to voluntarily modify mortgages under FDIC outline by Sheila Bair, ultimately cause it’s own continued losses and pain in the Merrill MBS losses? Cause if so, isn’t that ironic? ( if no less painful to me as a shareholder or homeowner, very Alanis Morrisette) !!! I betcha the answer to that is a great big YES. Harakiri by stupidity and refusal to help the little guy eh? IT’S THE HOUSING STOOPID!!!!

On another note, this Thain/Lewis melodrama is an ongoing conflict we will see repeated b/w commercial banking and Wall St corporate cultures….yep…notice how CITI never got past that in its ginormous amalgamation of diverse corporate cultures…(For those keeping track the BofA/Merrill group combined has 25 Billion in TARP funds at last count)

CNBC reports:

Thain’s resignation comes less than a week after Bank of America was forced to seek $20 billion in government bailout money to absorb Merrill, which it agreed to buy last September amid the credit crisis.

The extra government money was needed because of an unexpected $15.31 billion loss by Merrill in the fourth quarter. The government also agreed to share in losses on about $118 billion in Merrill debt.

The relationship between Lewis and Thain has been strained because of Merrill’s unexpectedly large loss.

Merrill, meanwhile, decided to move up its year-end bonuses, doling out cash just days before it was officially acquired by Bank of America, it was reported earlier Thursday.

Expect LOTS more on those bonuses Merrill paid out….

WOTS is that Ken went to Treasury mid-December to say the merger was in jeopardy when the Merrill losses kept mounting as the market continued downward….Lewis has indicated Treasury told him ‘do the deal we have your back’!

So, Ken apparently feels this is sufficient to cover HIS fiduciary duty to the BofA shareholders since he never told them/us about the pending Merrill losses prior to the BofA shareholder vote on the merger…

Someone… Ken clearly, has the long knives out for Thain, Charlie Gasparino is on CNBC Live releasing the details of the million dollar makeover Thain gave his exec suite at Merrill…I was burned by Thain as a New York Stock Exchange shareholder also, that tanked on his watch too…but how much is what was happening on the street at the time?

Will we BofA shareholders in the common stock live to see another year as a free company of capitalism? How much farther can our common share equity be diluted by capital injections by the government? Inquiring minds, and my mom’s pension fund, want to know!!!

More as it continues to develop….

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January 22, 2009. Tags: , , , , , , , , , , , , , , . CITI, citigroup, Economy, Finance, Foreclosures, Housing, Music, Politics, Popular Culture, TARP, Wall St.

9 Comments

  1. Cuomo/BofA Smackdown: It’s On ! (again) « Moderate in the Middle replied:

    […] *MiM are shareholders in both firms. Our previous posts on BofA/Merrill’s merger, bonuses, staffing, stock prices and reporting etc here . Our coverage of Cuomo’s initial move on BofA in March of 09 here. More  posts on Thain/Lewis here and here and here […]

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  2. Breaking: SEC charges BofA with making material false stmts on Merrill deal…CIT Group shares halted for news pending…. « Moderate in the Middle replied:

    […] are shareholders. We have covered this extensively see our posts on Thain/Lewis here and here and here and  […]

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  3. Making Their Move against the Fed: Bernanke under fire on BofA/Merrill: Email trail… « Moderate in the Middle replied:

    […] Our previous posts on Thain/Lewis here and here and here […]

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  4. Bernanke under fire on BofA/Merrill: Email trail… « Moderate in the Middle replied:

    […] Our previous posts on Thain/Lewis here and here and here […]

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  5. Breaking: AG Cuomo: Bank of America ‘interfering in bonus probe’…Thain v Lewis, it’s on!!!… « Moderate in the Middle replied:

    […] see our previous post on Lewis V Thain here and here […]

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  6. nokia tema replied:

    thank you;)

    Like

  7. ginaswo replied:

    thank you for the very informative comment!!! good Gawd so there werent even Economies of Scale in business ops at all?? this looks like the disaster that was the failure to integrate in CITI all over again…

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  8. FoolsGold replied:

    Thain was great for Merrill lynch employees. He paid them bonuses.

    Bank of America invested hard to come by cash at the hight of the crisis into rescuing Merrill Lynch. It is true that Merrill Lynch clients are highly lucrative, but the financial advisors are very mobile as well. Mr. Ken Lewis made a huge mistake.

    The mistake has continued. During the integration/transition several business and technology decisions to go with the Merrill Lynch technology systems have been made. Can you imagine – Bank of America is moving to batch based overnight processing Merrill systems which require 7+ hours to process daily transactions?? This in the days of global markets is unimaginable.

    It’s not only Thain who sold Lewis a bridge, but Merrill Lynch business and technology have also sold old systems to BofA. Here again the combined team did not look at the business as usual costs of Merrill systems.

    Obviously, this is not the end. Thain departure was public, but there will be hundreds of internal losses due to decisions made which will continue to haunt this business and its clients.

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  9. » Breaking: Lewis throws Thain overboard…Thain ‘resigns by mutual agreement’ from Merrill/BoA… replied:

    […] thecool-nerd.com wrote an interesting post today onHere’s a quick excerpt …But can Ken Lewis survive the kerfuffle?? Full Disclosure, I am a Merrill, now BofA shareholder. So Thain helped Merrill survive in one sense and did his full fiduciary duty to Merrill *perhaps* by keeping it alive through the BofA merger…but did Ken Lewis?? (For those keeping track the BofA/Merrill group combined has 25 Billion in TARP funds at last count) […]

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