A Glaring Omission in Bank of America's Moynihan Announcement

Sometimes, it's better not to leave things unsaid. Bank of America (BAC), which announced on Wednesday that Brian Moynihan will become the firm's new chief executive officer, made a glaring omission in its press release about Moynihan.As the New York Times noted, the press release neglected to mention that Moynihan had been promoted to the position of general counsel in December, 2008 -- five days after the acquisition of Merrill Lynch was announced and twenty-one days before the deal closed. You'll recall that decisions about bonuses and disclosures to shareholders that were made during that time led to an avalanche of class-action lawsuits and regulatory investigations of the deal.%%DynaPub-Enhancement class="enhancement contentType-HTML Content fragmentId-1 payloadId-61603 alignment-right size-small"%%

In September, for example, Ohio Attorney General Richard Cordray sued Bank of America for allegedly concealing billions in losses while allowing the company to pay $3.8 billion in bonuses at the end of 2008, although Mr. Moynihan was not named as a defendant. Congress is also investigating the merger and in September, a federal judge rejected a proposed $33 million settlement Bank of America had worked out with the SEC, related to the charges.

None of this is to say that Moynihan was responsible for any alleged wrongdoing during his time as general counsel. It is just surprising that the period while he was general counsel, no matter how difficult for Bank of America, was ignored. Bank of America's press release simply says:

Moynihan, 50, has held senior leadership positions at Bank of America representing experience across virtually all business lines. He currently is president of Consumer and Small Business Banking. . . From 2007 to 2009, Moynihan served as president of Global Corporate and Investment Banking, leading a business delivering a wide range of financial services products and services to more than 140,000 clients around the world, ranging from small, high-growth and middle-market companies to large multinational corporations, government entities, financial sponsors and institutional investors.

Why did Bank of America leave out that critical part of Moynihan's tenure? It can't be blamed on space restrictions: The company was able to find room to mention that Moynihan is a former chairman of the Travelers Aid Society of Rhode Island and Providence Haitian Project, Inc.

In a phone interview, Bank of America spokesman Scott Silvestri did point out that if you go to the press release on the PRNewswire site and then click on the executive biography sidebar to the press release, it opens up a PDF file of his biography. And there it is --if you read down to the end of the third paragraph. It says: "He also has served as general counsel for the company."

Touché. The biography in the actual press release was 209 words compared with 284 in the PDF attachment. Still, it's interesting that "former chairman of the Travelers Aid Society" made the cut for the abbreviated version but general counsel during period leading up to the closing of Merrill Lynch acquisition did not.

Read Full Story