Bank of America CEO Ken Lewis to Step Down at End of 2009

September 30, 2009 by · Leave a Comment
Filed under: Industry News 

No surprise on this announcement.  Currently, two lawsuits have been filed against the national bank for the Merrill Lynch acquisition that included bonuses that have been alleged to “not” have been disclosed properly to shareholders and possibly, bank regulators.  Ken Lewis has really been in the hot seat since this whole financial crisis began, starting with their purchase of troubled home mortgage lender Countrywide.

It is my opinion we will see more shakeouts of top management at more banks as these deals and losses get more focus and the facts come to light.  Maybe this will be the first step for Bank of America to move forward and get back to prudent banking practices.

Bloomberg, New York – Bank of America Corp. Chief Executive Officer Kenneth D. Lewis, his credibility battered by the Merrill Lynch & Co. takeover, plans to step down at the end of this year.  No successor was named for Lewis, who will also retire as a director, according to a statement today from Bank of America, the biggest U.S. lender by assets and deposits. The resignation ends Lewis’s 40-year career at the Charlotte, North Carolina- based company, including the last eight as CEO.

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Bank of America Wins Order on $1 Billion in Colonial Bank Assets

August 13, 2009 by · Leave a Comment
Filed under: Industry News 

Bloomberg, New York Bank of America Corp. won a restraining order barring Colonial Bank, the Alabama lender under federal criminal investigation, from selling or otherwise disposing of $1 billion in cash and loans held by Colonial.

Colonial, based in Orlando, Florida, said last week it may be placed into receivership with the Federal Deposit Insurance Corp., after a planned Aug. 10 meeting with the Alabama State Banking Board. Details of the meeting weren’t disclosed.

U.S. District Judge Adalberto Jordan in Miami issued the order after Bank of America sued Colonial yesterday in Miami, claiming Colonial is holding the cash and loans as a custodian for Ocala Funding Inc. The order notes that the suit relates to more than 6,000 mortgages worth more than $1 billion.

“To the extent that the interests of the public are implicated in this case, they weigh in favor of requiring Colonial to honor its contractual obligations and avoiding what would amount to a $1 billion heist,” the judge said in an order posted online today.

Ocala is a commercial-paper vehicle sponsored by Taylor, Bean & Whitaker Mortgage Corp., the 12th-largest U.S. home lender, which received funding from Colonial. The commercial paper, or short-term IOUs, was backed by residential mortgages.

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Federal Reserve Possibly Delayed Merrill Lynch Loss Disclosures According to Internal Email

June 24, 2009 by · Leave a Comment
Filed under: Legal News 

This just shows more of the opaqueness in our U.S. financial system.   When we are looking to gain back trust and confidence, these types of findings are counter-productive but needed to put light on the issue of transparency and doing what is right now what is politically convenient.  We still do not know where $2 trillion in loan agreements or where most the money from A.I.G went.  These are important questions that should be asked and answered no matter how damaging it is.  We have totally bailout out and propped up a bunch of actors that have been liquidated and sold to the highest bidder.  Once the truth is known, then and only then will we have the information in hand to make the hard choices and put in place or enforce rules and regulations that will protect the investor and punish the overly greedy.

News (Bloomberg):

House Republican staffers said the Federal Reserve tried to control the timing of disclosures of rising losses at Merrill Lynch & Co. in the weeks leading up to its takeover by Bank of America Corp., according to a memo obtained by Bloomberg.

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Bank of America raises $13.5 billion thru stock sale

May 19, 2009 by · Leave a Comment
Filed under: Stock Market News 

Gosh I would like to know “who” or “whom” made those stock purchases.  Well it is good that they are raising that capital required to keep the proper reserve ratio.  For some reason I believe that those purchases were “sponsored” in some way, I can’t see with all this uncertainty, private investors would make such large purchases while the banks still have undisclosed assets / liabilities on their balance-sheet and they still have TARP money and stock warrants as well.   Very interesting.

News (Forbes): 

Bank of America Corp. said Tuesday that in less than two weeks it has raised $13.47 billion through the sale of 1.25 billion shares at an average price of $10.77 each.

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Bank of America Needs to Raise $33.9 Billion in Additional Capital

May 6, 2009 by · Leave a Comment
Filed under: Industry News 

Well we will see how these “stress test” results look on Thursday.  I have heard anywhere from 10 to 16 of the 19 biggest banks we need to raise additional capital to maintain an adequate reserve ratio.   The problem I have with these tests are the fact that if you look at the criteria of the tests, they really painted a recovery this year and an additional 7 to 15% decline in housing prices.  

Maybe we can keep good economic numbers while we have all of these government backed programs to prop up our failed financial system but once those need to be reigned in and all that cash that has been pushed into the system, starts to flow around.  I believe we will be in the same position as last October or even worse.  I guess we can keep our fingers crossed and our guns loaded?   

News (NY Times):

The government has told Bank of America it needs $33.9 billion in capital to withstand any worsening of the economic downturn, according to an executive at the bank.

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