The wires today are abuzz with reports of Ken Lewis ousting Merrill head honcho John Thain. (Remember the firms merged this month.)
Here's what I said two months ago:
But it's time now for Ken Lewis to walk away from this deal. He's been duped by the more sophisticated Wall Streeters on this one. John Thain appealed to Ken's gargantuan ego and it worked like a charm. Lewis may as well have been a fanny-pack wearing tourist at a professional poker table - he was bent over that easily.
Here's the post-bend-over kiss-and-tell from today's Charlotte Observer:
Lewis' loss of confidence in Thain was due to a combination of factors, according to a source familiar with the matter. Merrill had been losing executives, and the bank heard concerns about his leadership from employees and investors. In addition, Lewis learned of Merrill's rising losses from the Merrill transition team, not Thain himself. When Lewis later talked to Thain, he didn't seem to have a good explanation, the source said.
Thain also went to Vail, Colo., on vacation in December at a time when Merrill's problems were emerging. Although Thain was working on the trip, the move was not perceived well at Bank of America, the source said. Thain also had planned to fly this week to the World Economic Forum in Davos, Switzerland, even though some Bank of America officials had signaled he shouldn't go.
Thain's payment of bonuses to Merrill employees before the deal closed also has emerged as a new black-eye for the bank.
Bank of America spokesman Scott Silvestri said today that Thain made the decision to pay the bonuses in December instead of the normal time of January. Merrill was an independent company at the time but informed the Charlotte bank of the decision, Silvestri said. He declined to say when the bank learned of Thain's decision.
December was a critical month for the merger. The bank has said it learned of rising losses at Merrill in the middle of the month, after shareholder approval on Dec. 5 but before the acquisition closed Jan. 1. Bank of America CEO Lewis last week said he considered backing out of the deal, but proceeded under the urging of regulators.
Last week, Bank of America said Merrill posted a fourth-quarter loss of more than $15 billion, largely because of writedowns related to the fallen value of securities. That loss, though, wasn't counted as part of Bank of America's own $2.4 billion fourth-quarter loss.
The bank wouldn't say how much Merrill paid in bonuses. Merrill disclosed compensation and benefits expenses of $15 billion for 2008, down 6 percent from 2007.
So, let's see....
Thain *hid* losses from Ken Lewis.
He went on vacation in December to Vail when the losses were coming to light AND just before the close of the merger.
AND, worst of all, he engineered a looting of the company by its employees at the midnight hour.
HOW THE 'EFF CAN MERRILL'S TOTAL COMPENSATION ONLY BE DOWN 6 PERCENT FROM 2007?!?!?!?!
Now almost as bad as what Thain and Merrill Lynch did to shareholders and taxpayers is the shameless scapegoating from Ken Lewis.
He's trying to get the blame-fingers pointed at Merrill, Thain, and the *regulators* who ALLEGEDLY made him do the deal. Ken Lewis, with all this smoke and his BAC stock purchase is doing his very best to keep the focus off him and the fact that BAC is trading at $5.71 today - an 18 year low.
For sure, John Thain screwed Ken Lewis. But Kenny Boy showed up commando in a pink mini-skirt, wore a blonde wig, and toted a bottle of lube.
Sorry for the graphic imagery, but if you want a whitewash of this heinous crime you're going to have to look elsewhere.