The resignation of Dan Sontag from his position as the head of the brokerage unit at Bank of America gives lie to a months long disinformation campaign waged by the bank against its own employees. It may well take years–and further personnel changes–before the “thundering herd” will trust its corporate parent again.
Back in June, we reported that a “secret coup” was underway at Bank of America to unseat Dan Sontag, the 31 year Merrill veteran who had taken over the brokerage business after the departure of Bob McCann following the merger with Bank of America. The reaction from Merrill Lynch was to deny the story, both to members of the press and by sending around an email to all its brokers.
“It’s completely without merit,” Selena Morris told Dan Freed of TheStreet.com. Freed characterised her comments by saying Morris had “strongly denied” our report.
An email sent from management to the financial advisers across America warned them that a “fictitious” story was circulating on the internet. The next day, Sontag himself held a “townhall meeting” with Merrill employees to deny that he was leaving the firm.
Just two months later, Sallie Krawcheck was brought in to run the brokerage and Dan Sontag had resigned.
It’s not just denying a story about internal politics that has landed Bank of America in hot water. It’s the extreme lengths the bank went to deny the story. The bank might have just declined to comment or offered a perfunctory denial. Instead, it issued “strong denials” and used the phrase “completely without merit.” Worse, it sent its own employees an email that later turned out to be fictitious itself. This has damaged Bank of America/Merrill’s reputation both among members of the media and with its own employees.
We spoke with a few of Merrill financial advisers today who told us they feel badly burnt by this process, kept in the dark by their new masters in New York and Charlotte, North Carolina.
“The lesson in all this is that they’ll say anything they find convenient, and who cares about the truth?” one FA said.
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