Bank of America is facing scrutiny for the timing of dismissing its general counsel, Timothy J. Mayopoulos, which took place four days after bank shareholders voted to approve the Merrill Lynch merger. Mayopoulos was told he was no longer needed at the company. Now, New York’s Attorney General Andrew Cuomo and other federal investigators are examining why the bank’s executives did not tell shareholders about billions of dollars worth of bonuses as well as huge losses at Merrill Lynch before the deal, said the New York Times. Mayopoulos was let go the day the bank informed its board that Merrill was losing money at an unexpected pace. He was immediately escorted from the building without being permitted to return to his office, the people with knowledge of situation said. His dismissal came six days after Mayopoulos spoke with the bank’s chief financial officer about mounting losses at Merrill Lynch, which were not disclosed to shareholders before the deal closed. As general counsel, Mayopoulos was responsible for advising the bank on its disclosure decisions. It is unclear how he advised executives to handle the information on Merrill’s bonuses and losses, which some shareholders later said would have changed their mind about approving the merger. In testimony to Cuomo’s staff in August, Mayopoulos cited legal ethics rules and declined to provide specifics on the advice he gave the bank. Cuomo has since asked the bank in a letter to grant Mayopoulos and the bank’s other lawyers permission to respond. By invoking the confidentiality of legal advice, Bank of America was “hindering this office’s ability to make fair and fully informed decisions as to what charges, if any, to bring and whether individual Bank of America officers should be charged,” Cuomo’s office wrote. Mayopoulos is now the general counsel of Fannie Mae.
Cuomo Scrutinizes BofA’s Firing of GC
New York’s Attorney General Andrew Cuomo and other federal investigators are examining why the bank’s executives did not tell shareholders about billions of dollars worth of bonuses as well as huge losses at Merrill Lynch before the deal.
September 9, 2009