Updated from Sept. 30

Shares of First Marblehead ( FMD) plunged 10% Monday after the loan processor confirmed that big customer Bank of America recently backed out as a co-manager on an upcoming $1.68 billion educational loan securitization.

Boston-based First Marblehead filed an updated registration statement for the offering in which Citigroup was substituted as a co-manager on the deal for BofA.

A First Marblehead spokesman gave no explanation for BofA's decision to pull out of the deal, which is lead by Deutsche Bank.

On Friday, TheStreet.com first reported that BofA had backed out of the offering in the wake of the gift-giving scandal involving former First Marblehead Chairman and CEO Daniel Meyers and a one-time top BofA student loan executive.

Last Tuesday Meyers resigned from First Marblehead in conjunction with the firm's disclosure that he had given $32,000 in gifts to the BofA executive when she was heading up the student-loan division of the nation's second-biggest bank.

It isn't clear if BofA's decision is directly related to the gift-giving scandal. If it were, it would be the first indication that the Charlotte, N.C., bank is reassessing its dealings with First Marblehead in the wake of the Meyers revelation.

Officials with BofA declined to comment.

Any move by BofA to scale back its relationship with First Marblehead could be significant, given that BofA is First Marblehead's second-biggest loan processing customer. First Marblehead, in its most recent fiscal year, serviced $2.7 billion in educational loans, of which $632 million was underwritten by BofA.

In the wake of the scandal, a number of Wall Street analysts expressed concern that it would hurt First Marblehead's relationship with its three main customers, J.P. Morgan Chase ( JPM), BofA and Charter One, a division of the Royal Bank of Scotland.

Friedman Billings Ramsey analyst Matt Snowling says the gift-giving scandal "raises serious issues for the company" because nearly 80% of its loan-servicing work comes from those three clients.

In the securitization, the closing of which has been pushed back a month, First Marblehead pools and services a series of bonds backed by the revenue generated from educational loans issued by the National Collegiate Student Loan Trust. The bonds are being sold to institutional investors.

In fact, some of the loans backing the bonds are educational loans issued by BofA.

From a practical standpoint, BofA's decision to pull out of the securitization deal probably will have little impact on the deal getting completed. BofA was one of several co-managers on the securitization.

Before the scandal erupted, Moody's Investors Service had given a provisional investment-grade rating to the notes. The rating agency has not indicated any intention of revising its ratings.

What is clear is that BofA has moved swiftly in dealing with the scandal after being tipped off by an unidentified whistleblower about the gifts Meyers had given Kathy Cannon, a former senior vice president in the bank's student loan operation. Within the past month, Cannon was asked to leave the bank for violating its policies on avoiding conflicts of interest.

Shirley Norton, a BofA spokesman, said Cannon left the bank after "appropriate" action was taken.

It was only after Cannon left BofA that First Marblehead officials learned of the gift-giving by Meyers. Sources say the loan-servicing firm was apprised of the incident by BofA officials.

Nt everyone is concerned about the health of the business relationship between BofA and First Marblehead. One of First Marblehead's biggest bulls, Tom Brown, manager of Second Curve Capital, says he expects First Marblehead and BofA to take steps to strengthen their business ties in the next few weeks. Brown says BofA's decision to withdraw as a co-manager on the securitization is of little concern to him.

"All we are doing is speculating," says Brown.

Of course, Brown has plenty of reasons to hope the ties between BofA and First Marblehead weather the gift-giving scandal.

Over the past nine month, Second Curve has bought 3.5 million shares of First Marblehead stock. As of mid-September, the $550 million hedge fund had amassed enough of First Marblehead to build a 5.4% equity stake in the Boston-based firm.

On Monday, First Marblehead fell $2.45 to $22.95.