He’s baack! John Thain takes reins at CIT Group…
Happier Days
Hardly seems fair does it? Ken Lewis loses his spot at BofA, gets civil complaints filed against him by Cuomo, gets grilled by CongressCritters as attorneys drool on their TVs hoping for a magical shareholder class action suit, and Thain walks into a new CEO suite with hardly a scratch.
Vagaries of the dice toss or a deal with Beelzebub? Maybe it’s just that Ken is from Charlotte and John is from The Street? Must be his ‘Goldman’ parachute, heh. FD-MiM are Merrill/BofA shareholders….Our multitude of posts on the BofA Merrill merger and post merger brouhaha here..
Mashup by BluTaiger
John Thain has been chosen to run lender CIT, after a year in which he was ousted from Merrill Lynch and the business lender teetered on the brink. Thain will start as chairman and chief executive immediately, CIT said late yesterday, replacing interim head Peter Tobin.
Thain, 54, led Merrill for a year, when he was shoved out in January 2009 after the company was bought by Bank of America in a controversial merger. The former president of Goldman Sachs and the New York Stock Exchange has been out of work since. CIT, a major business lender that expanded into subprime mortgages and student loans during the boom, filed for bankruptcy last year after the government refused to give it a second infusion of rescue funds.
It emerged from bankruptcy in December, after managing to unload more than $10 billion in debt. “Much has been accomplished in recent months to position CIT for renewed success,” Thain said. CIT executives face compensation restrictions because it received funds from the Troubled Asset Relief Program. According to reports, Thain will receive $500,000 in salary and $5.5 million worth of restricted CIT shares. He could also earn another $1.5 million in restricted shares.
That’s a pittance compared to what he was making at Merrill Lynch. When he joined, the bank agreed to a $44 million compensation package…
You know who should pay the shareholder suits? STANLEY O’NEIL, he destroyed Merrill IMO….
Update: CNBC reports Lewis to step down by end of year; Cuomo/BofA Smackdown: It’s On! (again)
Update 09/30: Charlie Gasparino is reporting that Ken Lewis has been pushed out (the stmt says he stepped down but I call BS)!! This is HUGE! WOTS was he had TOTAL BACKING OF THE BOARD! Recall BofA is centred in Charlotte, NC far from the Wall St shenanigans but Lewis got sucked into the ‘eeeevil banker’ canard PLUS the added bonus of ‘hide the bonuses’ with Thain. I for one would never want Andy Cuomo on my trail if I had a blessed thing to hide!
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(Reminder FD- MiM are shareholders in both BofA and were MER shareholders as well pre merger)
Bank of America’s CEO Ken Lewis, the embattled head of the nation’s biggest bank, told the board he plans to step down by the end of the year.
Lewis wasn’t asked to step down and the decision was not the result of any regulatory action, sources told CNBC. No successor has been named yet….
Original post after the break:
Update: Paulson to Lewis on BofA Merrill Merger, An Offer He Couldn’t Refuse?
Update: In Depth View via Bloomberg:
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Our previous posts on the Clash of these Bank, Trading and Finance Titans here
Disclaimer: MiM are Merrill/BofA shareholders, our view is pretty damn biased as a result..
Was Timmeh in the room and in the loop? He was head of NY Fed then, betcha he was in the loop…..
Andrew Cuomo has his teeth in and he has that bulldog lockjaw thing happenin’ as he gets ready to run in 2010, Cuomo v Giuliani would be sweet!
Ken Lewis is SOL, shareholders are rightfully pixxed as all get out if he let Hank bully him into waiving withdrawing form the merger under MAC provisions. Material Adverse Change, which is what the MER losses were at that point according to Lewis’ testimony to Cuomo
…BUT even if he stood up to Hank and pushed ahead and went to court in DE, Hank is right in what he told Lewis anyway, DE is a tough fight on MAC, and it would have likely turned out BofA could NOT withdraw under MAC as with proper DUE DILIGENCE they should have KNOWN these losses were coming…either way Lewis is Fired CEO Walking…
Breaking: BofA to pay $33m penalty in settlement…SEC charges BofA with making material false stmts on Merrill deal…CIT Group shares halted for news pending….
Update 5: BofA Spokesman: Ken Lewis ABSOLUTELY has the full support of the Board…
Happier Days...
Update 4: BofA to pay $33 million penalty as part of settlement. Gee as a shareholder can I get part of that? Suuuure, after all WE are the wronged parties.. AS IF!
BofA is settling the charges, “without admitting or denying guilt”. Well now TAXPAYERS will wind up SOL when shareholders sue…after all we will not allow their capital ratios to fall….Pfft.
Developing via CNBC
Breaking II: Now SEC is charging BofA with making materially false, misleading statements in connection with the Merrill merger….oh boy….
We are shareholders. We have covered this extensively see our posts on Thain/Lewis here and here and here and here
This is NOT about the failure to use the Material Adverse Change clause to escape the merger, this is the bonus issue Cuomo was on top of…
From Mary Thompson CNBC:
SEC: BofA agreed to pay up to $5.8B in Merill bonuses, contrary to statements in the merger agreement…
Oh Andrew Cuomo must have gotten them in the depositions of Thain and Lewis, oh boy….
Hope to Good Lord it is news of a buyout or capital infusion of some magnitude and not a bankruptcy….
Our previous post on CIT Group here
Okay CIT Group just raised the purchase price on the tender offer.. no biggie.
Update: Bernanke gets Grilled on the Hill…
Update: Ben doing very very well in his testimony, Markets are ecstatic about it, Dow up 148…
Fed Chairman Bernanke under subpoena before Issa and Towns’ House Oversight and Government Reform Panel on BofA/Merrill merger
CNBC Live Stream Here
Ben’s prepared statement:
…Bernanke, in prepared testimony to a House committee investigating the matter, said he did not threaten action against Bank of America’s CEO Kenneth Lewis or the bank’s board members if they decided to abandon the takeover.
“Neither I nor any member of the Federal Reserve ever directed, instructed or advised Bank of America to withhold from public disclosure any information relating to Merrill Lynch, including its losses, compensation packages or bonuses or any other related matter,” the Fed chief said.It marked Bernanke’s first public comments since the House committee launched an investigation earlier this year into whether he or other government officials bullied Bank of America to stick with its plan to combine the two financial powers after Lewis found out about Merrill’s financial woes….
FD-MiM are shareholders…a list of our previous posts here
Moderate in the Middle 