Tuesday, Dec. 08, 2009

Lewis vs. Thain

As the world of high finance teetered last year, Ken Lewis and John Thain emerged as heroes. By arranging for Bank of America to buy Merrill Lynch, the two CEOs — Lewis at B of A, and Thain at Merrill — seemingly avoided another ripple-effect collapse like the one from Lehman Brothers. But by January, the new union was rocked by controversy. Even as Bank of America took tens of billions of dollars in government aid, Merrill paid out $3.62 billion in bonuses to its top employees. The scandal quickly turned personal, with Lewis firing Thain and claiming B of A had nothing to do with the premerger payments. Thain publicly shot back. "The suggestion Bank of America was not heavily involved in this process and that I alone made these decisions is simply not true," he said in an interview. "Getting fired is one thing. But nobody has the right to say things that they know aren't true." In September, Bank of America agreed to pay $33 million to settle a Securities and Exchange Commission investigation into the bonuses, but a judge overruled the settlement, saying it unfairly hurt bank shareholders, and ordered a trial for next year.