Tuesday, October 6, 2009

BofA UPDATES: Emergency CEO and Some Federal Pressure (but not to hide the bonuses)

Good Morning! Two quick notes, reported across the media outlets yesterday afternoon and this morning:

Preceding Ken Lewis' signal for early retirement, the company created a committee to name an emergency CEO. Post-Lewis-announcement, the efforts have been accelerated and a contingency plan is expected to be submitted to the board for approval this week. This contingency plan is also expected to be submitted to government regulators for approval (BofA received TARP funds). Pending both approvals, the plan would only come into affect if the current legal drama forces Lewis to step down even earlier than announced.

Separately, an other BofA committee is investigating long-term replacements for the CEO. The final list will also be submitted to the board and the federal government for approval.

And finally, TARP Special Inspector General Neil Barofsky was also investigating the matter of whether the federal government unduly pressured BofA into the Merrill deal. Barofsky concluded that while Fed and Treasury pressure was applied to BofA to complete the deal, federal officials did not advise withholding public disclosure of the Merrill bonuses.


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