When it rains it pours on Bank of America (Stock Quote: BAC)!
As though they didn't have enough bad press already (such as angry customers and outraged former employees taking to the Web), CNNMoney now reports that “New York Attorney General Andrew Cuomo unveiled a major legal action against senior Bank of America executives Thursday over its controversial purchase of Merrill Lynch, including bringing civil charges against its former CEO Ken Lewis.”
You remember Ken Lewis. Bank of America’s former CEO got a massive, almost $64,000,000 retirement package when he left the company a few months back amid controversy surrounding the bank’s purchase of Merrill Lynch. Evidently Bank of America may not have been entirely upfront during the acquisition process.
And let's not forget the fact that Mr. Lewis was at the helm as Bank of America foreclosed on American homeowners hit by the downturn... and as the bank's credit card division raised rates (sometimes doubling them) for no apparent reason on long-time customers in good standing. Nice work.
Karma sucks, Mr. Lewis. Although schadenfreude is surprisingly sweet.
UPDATE 2:29 p.m. ET: A spokesperson for Bank of America issued the following statement to MainStreet, via e-mail: "We find it regrettable and are disappointed that the NYAG has chosen to file these charges, which we believe are totally without merit. The evidence demonstrates that Bank of America and its executives, including Ken Lewis and Joe Price, at all times acted in good faith and consistent with their legal and fiduciary obligations. In fact, the SEC had access to the same evidence as the NYAG and concluded that there was no basis to enter either a charge of fraud or to charge individuals. The company and these executives will vigorously defend ourselves."