BofA Firing Under Investigation

Shortly after Bank of America shareholders voted to approve the bank’s acquisition of Merrill Lynch, Bank of America’s general counsel, Timothy J. Mayopoulos was unceremoniously fired by the chief risk officer. The dismissal, which was given no explanation, has now come under investigation by federal investigators, led by New York Attorney General Andrew Cuomo.
 
In particular, the timing of the firing, which occurred on the same day as Bank of America informing its board of directors that Merrill Lynch was losing money at a surprising pace, has come under scrutiny. Mayopoulous had just discussed Merrill Lynch’s financial situation with the bank’s chief financial officer six days before, which were not then disclosed to shareholders.
 
Mayopoulos’ job involved advising the bank on its disclosure decisions, but it is not yet clear what Mayopoulos advised the bank concerning the disclosure of Merrill Lynch’s financials, information that many stockholders say would have changed their votes on the merger agreement. According to Cuomo, Bank of America needs to disclose this information or else risk hindering the investigation.

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