The drama continues: Thain attacks Bank of America
Apr 27th 2009 7:30AM
Updated Dec 3rd 2009 11:08AM
Bank of America (BAC) has gotten into trouble for everything -- from succumbing to government pressure to close its deal with Merrill Lynch to the size of Merrill bonuses to the sale of the CEO's Porsche to the CFO. And now it gets one more straw on the camel's back.
John Thain, former CEO of Merrill, who would have become a senior officer at the bank after the buyout but left B of A under pressure, says that the bank has made false comments about his role in the marriage of the two companies.
"Getting fired is one thing. But nobody has the right to say things that they know aren't true," said Thain during one of a series of interviews with The Wall Street Journal. Thain specifically says that B of A was aware of and approved the huge bonuses paid to some Merrill staff in December.
The fascinating part about the news and rumors swirling around the bank is that no one can tell for certain which comments by the central characters are true and which are lies. Bank CEO Ken Lewis says he was pressured by then Treasury Secretary Henry Paulson to close the Merrill deal or risk having his board pushed out. Paulson was allegedly acting on a request by Fed chief Ben Bernanke. Bernanke has denied that, at least partially. The war over what B of A knew about Merrill's losses and bonuses has gone on for months. So far, no one has been able to figure out who is telling the truth.
As the pitched battles go on, shareholders have to watch as management wastes time and the bank faces more losses.
Douglas A. McIntyre is an editor at 24/7 Wall St.