The SEC Slaps Bank of America's Hand

When CNBC interrupted the banter of its morning hosts on Aug. 3 with "breaking news" that the Securities & Exchange Commission had filed charges against Bank of America (BAC), the first reaction was that an imminent showdown between the SEC and the bank would push its embattled CEO, Ken Lewis, a step closer to the exit. Already shareholders had voted to strip Lewis of his chairmanship and federal regulators had imposed tough sanctions that required BofA to overhaul its board, tighten up its risk management and lending practices, and give the government a clear succession plan—a move that by itself suggested the government was losing patience with Lewis. The prospect of a battle with the SEC—which was alleging that the bank had failed to inform investors about nearly $6 billion in bonuses that Merrill Lynch was paying top executives on the eve of its takeover by BofA—would seem to be the last straw for Lewis.

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