NEW YORK (

TheStreet

) -- Poor Ken Lewis.

The 62-year-old former

Bank of America

(BAC) - Get Report

CEO left without fanfare, after

a great deal of grief

, foregoing compensation for the previous year. His departure from the bank that he led for nearly a decade, and toiled at for a few more, was the result of controversy surrounding his decision to buy

Merrill Lynch

-- a purchase that regulators urged him to pursue.

Within weeks of his departure, the U.S. government filed

civil charges

against him personally, as well as against B of A itself. Now, within days of that, the former CEO of Merrill, John Thain, comes riding back to Wall Street on a golden chariot, hand-picked to lead the recently bankrupt lender

CIT Group

(CIT) - Get Report

, his selection having been

approved by regulators

.

The choice might have stung less if Lewis hadn't ousted Thain from Merrill's top seat for his own questionable decisions.

Thain was the one who crafted the sizable bonus packages that were distributed to Merrill's thundering herd, even if Lewis signed off on them as well. Thain also watched as losses piled up toward the end of 2008, without saying a word to shareholders or the public.

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His departure came after a backlash of public criticism, too. Thain spent $1.2 million on a lavish redecorating spree as Merrill Lynch crumbled, including $35,000 on the infamous "commode with legs." He had been pushing for a $10 million bonus package, a request he finally abandoned when it became clear that shareholders and taxpayers would no longer stand for signs of Wall Street greed.

None of this is to say that Thain is incapable of turning around CIT. Before taking the helm at Merrill, the 54-year-old bespectacled banker restored the New York Stock Exchange's sheen, taking it public and broadening its business horizon. And he certainly did well for Merrill shareholders -- or better than they otherwise might have fared -- by wooing Lewis into the merger at the crisis peak. Had Merrill not found a partner that weekend, the stock might have ended up worthless, and those bonuses might have been nil.

The choice of Thain by CIT's board and the government says something about their opinion of his capabilities, too. CIT is one of the largest lenders to small- and medium-sized businesses, an area that the Obama administration has squarely set its sights upon

for economic growth

. Thain seems to recognize this.

"What attracted me here is that CIT is a company that's very important to small- and medium-size businesses," he told

The New York Times

. "If we're going to see the U.S. economy continue to grow and see new jobs, we have to

provide financing

to those companies."

CIT's lead director, John Ryan, told the

Times

that the board saw "tremendous upside" in Thain, and compared him to an "Olympic-class athlete with a lot of potential going forward" to return the business to profitability.

The timing of the announcement is also telling, since New York State Attorney General Andrew Cuomo apparently exonerated Thain from

facing charges last week.

As Cuomo sued Lewis, former CFO Joe Price and Bank of America last week, he said that Merrill Lynch was "transparent in providing its financial information."

Thain's hiring and compensation package were also green-lighted by regulators, including the Federal Reserve, Federal Deposit Insurance Corp., and the Treasury Department, which still has a say on pay, despite losing its TARP investment when CIT went under. Thain will be receiving a $500,000 salary and restricted shares are worth $5.5 million today, but can't be sold for a number of months or years.

The payout is no where near as heady as Thain's Wall Street days, but his tenure at CIT will be one of redemption, not flashiness. Meanwhile, Lewis & Co. will be defending themselves either in back-room deals with Cuomo's office, or in a Manhattan courtroom. Then they'll move onto the other courtrooms around the country, where

litigious investors

are waiting on pins and needles for that decision to be revealed.

--

Written by Lauren Tara LaCapra in New York