The New York Post reports Bank of America Corp.'s (NYSE:BAC) Brian Moynihan, who is a top candidate to replace Ken Lewis as CEO, may have not been a member of the bar when he offered legal advice for a little over a week during the bank's merger with Merrill Lynch.
The Post states:
In the heat of Bank of America's controversial marriage with Merrill
Lynch, the man serving as general counsel for BofA wasn't authorized to
practice law, The Post has learned.
Brian Moynihan was named
general counsel on Dec. 10, 2008, but was not technically allowed to
offer crucial legal advice until more than a week later, when he
re-activated his status with the Massachusetts Bar Association.
Moynihan is now the president of BofA and one of two internal
candidates the board is considering to replace outgoing CEO Ken Lewis.
" 'This is another fact that leads me to believe there could be something
rotten in the cotton,' Ed Towns (D-Brooklyn), chairman of the
Congressional Oversight Committee, told The Post. He is investigating
the BofA/Merrill merger."
Is there really something "rotten in the cotton" here? Not really since the Securities and Exchange Commission doesn't require a person acting as general counsel to be an active member of the bar. Moynihan hadn't practiced law since 2005, and he had to step into Timothy Mayopoulos place quickly because Mayopoulos left on Dece. 3. Moynihan's status with the Massachusetts Bar Association was
renewed by Dec.
18. Plus, the bank had outside counsel from four law firms as well: Cleary Gottlieb Steen & Hamilton LLP; Wachtell, Lipton, Rosen & Katz; Wilmer Cutler Pickering Hale and Dorr LLP; and Richards, Layton & Finger PA.
Furthermore, Mayopoulos was projecting that losses at Merrill were going to be lower than BofA was projecting. However, as it later turned out, those losses were more than BofA was projecting, so it's probably a good thing Moynihan stepped in when he did to offer Lewis advice on a possible MAC. - Maria Woehr
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