Mayopolous was fired to retain Moynihan, plain and simple, said the SEC.
In response to Judge Jed Rakoff’s request for additional information before he makes a determination on whether or not to approve the Bank of America/SEC proposed $150 million settlement, the SEC filed a supplemental statement of facts. The filing indicated that Ken Lewis fired BofA general counsel Tim Mayopoulos to make way for current CEO Brian Moynihan to become general counsel in order to keep him at the bank.
The changeover happened quickly. Lewis told the board of December 9, 2008 that Moynihan, then the head of BofA’s investment banking division, was leaving the bank because his position would be eliminated in the merger with Merrill, the filing said. Moynihan was offered a position that would have required him to move to Delaware, which he declined.
By the next day, and after board members expressed disappointment in Moynihan’s departure, Lewis and BofA’s then-Chief Administrative Officer Steele Alphin had decided to replace Mayopoulos with Moynihan. The SEC cites an email between two bank directors, reacting to Lewis’ decision: “glad … Brian got saved … last of the Fleet guys and good person and team player … not sure what it does to Tim M…”
Earlier this month, Rakoff asked earlier this month why “the SEC didn’t come to the same conclusions about Mr. Mayopoulos’ termination as New York Attorney General Andrew Cuomo, who has filed a separate lawsuit in state court in Manhattan,” Chad Bray wrote for Dow Jones Newswires. Rakoff said Cumo’s suit insinuates Mayopoulos was fired because he wanted to disclose Merrill’s losses prior to the deal closing. Bray also noted that Rakoff had requested transcripts of testimony taken by Cuomo, including testimony from Mayopoulos.
Rakoff asked the Cuomo turn over the information by Friday at noon, which means his decision on whether or not to approve the settlement has been postponed until Monday.
Rakoff did not order the transcripts be turned over, so it will be quite interesting if Cuomo refuses to do so. Every time this one seems close to being over, something happens to pull us back in.
Read Chad Bray’s full report here.
Business Insider Emails & Alerts
Site highlights each day to your inbox.