That’s the headline on CNN today. Bank of America. Here’s some copy/pasting from the Wikipedia article on BOA:
The bank on January 11, 2008, announced they would buy Countrywide Financial knowing full-well that Countrywide was being investigated by the FBI for possible fraud relating to home loans and mortgages. This purchase made Bank of America Corporation the leading mortgage originator and servicer in the U.S. , controlling 20–25% of the home loan market. But wait, there’s more.
On September 14, 2008, Bank of America announced its intentions to purchase Merrill Lynch. This acquisition made Bank of America the largest financial services company in the world. That’s world. But wait; there’s more.
The Bank, in its January 16, 2009 earnings release, revealed massive losses at Merrill Lynch in the fourth quarter, which necessitated an infusion of money that had previously been negotiated with the government as part of the government-persuaded deal for the Bank to acquire Merrill. Merrill recorded an operating loss of $21.5 billion in the quarter. With ‘the government?’ So you and I helped pay off the $21.5 billion? Wasn’t that nice of us?
Alas, we’re not done. The market capitalization of Bank of America, including Merrill Lynch, was then $45 billion, less than the $50 billion it offered for Merrill just four months earlier, and down $108 billion from the merger announcement. Nothing like ‘wise’ investments, eh?
More. Bank of America received $20 billion in the federal bailout from the U.S. government through the Troubled Asset Relief Program (TARP) on January 16, 2009, and also got a guarantee of $118 billion in potential losses at the company. Another sweetheart deal from us to them.
On August 3, 2009, Bank of America agreed to pay a $33 million fine, without admission or denial of charges, to the U.S. Securities and Exchange Commission over the non-disclosure of an agreement to pay up to $5.8 billion of bonuses at Merrill. Tisk, tisk! The actual amount of bonuses paid was $3.6 billion, of which $850 million was “guaranteed” and the rest was shared amongst 39,000 workers who received average payments of $91,000; 696 people received more than $1 million in bonuses; at least one person received a more than $33 million bonus. One person; was it the one who suggested purchasing ML?
It ain’t over just yet. In 2010, the bank was accused by the US federal government of defrauding schools, hospitals, and dozens of state and local government organizations via misconduct and illegal activities involving the investment of proceeds from municipal bond sales. As a result, the bank agreed to pay $137.7 million, including $25 million to the Internal Revenue service and $4.5 million to state attorneys general, to the affected organizations to settle the allegations. My, my, the bank of America indeed!
Speaking of ‘America’s bank,’ in January 2008, Bank of America began notifying some customers without payment problems that their interest rates were being more than doubled, up to 28%. The bank was criticized for raising rates on customers in good standing, and for declining to explain why it has done so. Criticized? Tisk, tisk!
That brings us to today, “Bank of America cutting 30,000 jobs.” Really? How odd that, in order to hold onto its market share, 30,000 people will be terminated. I don’t suppose one of them was that guy who got the $33 million bonus, do you? Say, if that $33 million were divided by each of thos fired workers, they’d have $1,100 severance check to tide them over for a bit. Just joking!
So now those 33,000 people will be on the government dole until they van get can find a job. But BoA doesn’t give a hoot about them. “We’re a much simpler company than we were 24 months ago,” CEO Brian Moynihan said.
Simpler? Oh, sure you are, Bank of America. Sure you are.