Gallery
| BIG WINNER | rnBANK OF AMERICA EXECUTIVES rn LAUGHING ALL THE WAY FROM THE BANK | rn
The second-largest bank in the United States paid a settlement of $2.4 billion last month in a class-action lawsuit brought on by its shareholders. Bank of America investors accused executives of not being open about the financial condition of advisory firm Merrill Lynch when the bank proposed buying it during the height of the U.S. financial crisis. The $20-million deal was first proposed on Sept. 14, 2008, the same week Lehman Bros. collapsed. Bank of America executives later disclosed that Merrill Lynch was on its way to a $27.6-billion loss that year—a major hit for the bank, which was undergoing its own financial woes. Former B of A CEO Kenneth Lewis was fired for the deal and still faces civil charges, though that case is likely to grind to a halt now that shareholders have settled. So what makes this a Winning story for Bank of America? Though Lewis lost his job, not a single bank exec faced criminal charges—a rarity in a settlement of this size. And $2.4 billion is a drop in the bucket for B of A, which has paid out $29 billion in meltdown-related settlements since 2009. Which may be why, despite paying out the largest securities class-action lawsuit settlement of its kind in history, the bank continues to deny there is any truth to the allegations brought forth by shareholders. Executives insist they just want to put this behind them, and get on with the business of banking.
rnBank of America executives
| BIG WINNER | BANK OF AMERICA EXECUTIVES LAUGHING ALL THE WAY FROM THE BANK |
The second-largest bank in the United States paid a settlement of $2.4 billion last month in a class-action lawsuit brought on by its shareholders. Bank of America investors accused executives of not being open about the financial condition of advisory firm Merrill Lynch when the bank proposed buying it during the height of the U.S. financial crisis. The $20-million deal was first proposed on Sept. 14, 2008, the same week Lehman Bros. collapsed. Bank of America executives later disclosed that Merrill Lynch was on its way to a $27.6-billion loss that year—a major hit for the bank, which was undergoing its own financial woes. Former B of A CEO Kenneth Lewis was fired for the deal and still faces civil charges, though that case is likely to grind to a halt now that shareholders have settled. So what makes this a Winning story for Bank of America? Though Lewis lost his job, not a single bank exec faced criminal charges—a rarity in a settlement of this size. And $2.4 billion is a drop in the bucket for B of A, which has paid out $29 billion in meltdown-related settlements since 2009. Which may be why, despite paying out the largest securities class-action lawsuit settlement of its kind in history, the bank continues to deny there is any truth to the allegations brought forth by shareholders. Executives insist they just want to put this behind them, and get on with the business of banking.
