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!
Vodpod videos no longer available.
(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:
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.
Hank Paulson on the Hill…
Reminder, here is where we were almost a year ago now, the world was ending and Hank was in a sea of flotsam and jetsom trying to keep us afloat..do I like what he did, hell no, am I glad TOTUS and Timmeh werent alone at the reins then? Hell yes!
Update: Video as it is available…
Watching them grill Hank on the Hill
Live feed here
IMO this is bad, very very bad..
This is what they would do with a CIA investigation of ‘Torture’…go back and question shxt they knew about and never opened their mouths about before to look good….
They are going back and questioning every aspect of decisions they KNEW at the time were being madem, that they rolled over for..
After 9/11, after the collapse of Lehman, things were not ‘normal’
Never thought I could feel bad for Hank but I do..
This is a witch hunt and a kangaroo court and a clusterfark all rolled into one…
These people have NO CLUE about the financial system, and the things they are allowing Team TOTUS to do RIGHT NOW IMO far outweigh what Hank did with TARP and BofA and Merrill…
Shit Chrysler Senior Debtholders were threatened a few months ago, none of these Congress critters made a peep..
These are the same tools who LOVED them some Hank in October of 2008…
Hank does not look well….
The Critters are frankly really interrogating him at this point…cutting him off…beating him up and bullying him in fact with emails he has never seen…this is a guy they schmoozed like crazy, a guy who like it or not saved the system form collapsing, I do not agree with everything they did and didnt want TARP but we HAVE A FINANCIAL SYSTEM TODAY b/c Hank did something, unlike the Congress who was clueless and led by Nancy who was busy interfering with national elections and not minding the store….
Dennis Kucinich has bene on a MISSION to get Ken Lewis fired and BofA shareholders a nifty lawsuit, he is on CNBC now attacking Paulson….
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
Market Mover Thursday: Bernanke under subpoena on the Hill, Jobless claims up, Final GDP for 1Q -5.5%…
Rep. Darrell Issa, R-Calif., says the Federal Reserve failed to disclose details about its involvement in Bank of America’s controversial acquisition of Merrill Lynch, and today Fed Chairman Bernanke will testify before the House Oversight Committee about the deal. Rep. Issa discusses the allegations with CNBC.
Vodpod videos no longer available.
*FD- MiM are shareholders of BofA (and Merrill now also BofA, lol)
On this week’s jobless claims and GDP revisions (CNBC):
The number of people filing new jobless claims jumped unexpectedly last week, and the total unemployment benefit rolls rose to more than 6.7 million. In related news, the economy tumbled at a 5.5 percent pace in the first quarter, but appears to be doing better now.
The department said initial claims for jobless benefits rose last week by 15,000 to a seasonally adjusted 627,000. Economists expected a drop to 600,000, according to Thomson Reuters. The number of people continuing to receive unemployment insurance rose by 29,000 to 6.74 million, slightly above analysts’ estimates of 6.7 million. The four-week average of claims, which smooths out fluctuations, was largely unchanged, at 616,750.
Extended Benefits Unemployment Numbers up also:
Millions of Americans also are receiving jobless benefits through a federal extension enacted by Congress last year. For the week ending June 6, more than 2.4 million people received benefits under the extension, which adds 20 to 33 weeks on top of the 26 weeks typically provided by states. About 288,000 people also are receiving benefits under state emergency programs, bringing the total jobless benefit rolls to nearly 8.8 million that week. The extended benefits data lags initial claims by two weeks.
GDP:
…Gross domestic product, which measures total output within U.S. borders, dropped at a 5.5 percent annual rate in the first quarter after shrinking 6.3 percent in the fourth quarter of last year and 0.5 percent in the third quarter. The GDP reading was the final one for the first quarter. The Commerce Department initially said it contracted 6.1 percent, then revised that to 5.7 percent and finally to a 5.5 percent fall. GDP is expected to decline again in the current quarter ending June 30 though less severely than in the first quarter.
The Consumer:
…Consumer spending, which fuels two-thirds of U.S. economic activity, increased at a downwardly revised 1.4 percent rate instead of the 1.5 percent previously estimated….
Moderate in the Middle 