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Bank of America's Last, Best Hope

Stocks in this article: BAC JPM WFC

NEW YORK ( TheStreet) -- As a big bank with big legal problems, the choice for Bank of America (BAC) couldn't have been too complicated: hire Gary Lynch.

It worked for Credit Suisse (CS)in 2001, when the bank was reeling from cases accusing the firm of getting kickbacks from clients to whom it dished out shares of hot technology IPOs.

Also for Morgan Stanley (MS), whose legal team was in a shambles, having lost a whopping $1.5 billion verdict to Ronald Perelman involving appliance maker Sunbeam Products in 2005. Lynch took over the legal team in 2006, and Morgan Stanley had the verdict overturned in 2007.

Gary Lynch

Lynch is probably best known, however, for successfully bringing government cases against Ivan Boesky and junk bond pioneer Michael Milken in the 1980s while he was head of enforcement at the Securities and Exchange Commission. The SEC tried and failed to bring cases against Milken twice before Lynch, who is expected to join Bank of America in the fall and did not respond to a request for comment for this article, ultimately succeeded.

"He's got, in terms of background, the ideal experience set to help a large complex financial services firm like Bank of America," said William McLucas, partner at law firm WilmerHale. McLucas worked for Lynch at the SEC, before eventually becoming head of enforcement himself.

Portraits of Lynch in his SEC days, in the books "Den of Thieves" and "Eagle on the Street," suggest a determined-but-merciful enforcer. While pursuing a historic case against Milken, for example, and helping the Justice Department win its criminal conviction of the financier, he showed surprising restraint--especially considering he was only in his mid-30s at the time.

"Lynch said that despite the breadth of Drexel's violations and its belligerent attitude, the decision had been made not to strip it of its license to do business," wrote David Vise and Steve Coll in "Eagle on the Street." Drexel nonetheless ended up filing for bankruptcy about the same time Milken pled guilty to various securities and tax law violations.

Stanley Sporkin, who preceded Lynch as SEC enforcement chief and spent several years as his supervisor, says Lynch was willing to come up with creative solutions to avoid shutting down firms that had broken the rules.

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