Thursday, October 15, 2009

Screw the shareholders?

Posted By on Thu, Oct 15, 2009 at 12:49 PM

FU BofA, and everyone that looks like you too.

As a key U.S. House committee scrutinizes the role of board members in Bank of America's acquisition of Merrill Lynch, an exchange between two bank directors reveals their reaction to the deal's ripple effect on stockholders.

"Unfortunately it's screw the shareholders!!" Chad Gifford wrote fellow director Thomas May on Jan. 15 as the two listened in on a board conference call that carried news that the Charlotte bank would slash its once-lucrative shareholder dividend to a penny.

"No trail," May wrote back, probably aware that their e-mails could be made public later.

The clipped, salty exchange between the two longtime colleagues is among the documents provided to the House Oversight and Government Reform Committee and to New York Attorney General Andrew Cuomo. Both are investigating whether the bank properly disclosed information to its shareholders about certain aspects of the Merrill deal, including the company's mounting losses. They are also investigating whether the government inappropriately pressured Bank of America to complete the deal.

The Jan. 15 call was on the evening before Bank of America, which had weathered the credit crunch relatively unscathed, reported its first quarterly loss in 17 years. The call was two weeks after the bank closed its purchase of Merrill.

The next e-mail that's provided in the document is Gifford's one-word message to May at 5:51 p.m.: "interesting"

Two minutes later, May wrote back: "WOW"

It's not clear what they were discussing. The e-mails show that Gifford had forwarded de Molina's message to May.

Gifford then reminded his colleague of the conference call that was taking place.

"Concentrate on the phone!!!" he wrote, at 5:54 p.m.

"Screw You," May wrote back.

A minute later, Gifford typed: "Unfortunately it's screw the shareholders!!"

Bank of America, which had increased its shareholder payout for more than 30 years, would announce the next morning that it was slashing the quarterly dividend to a penny. It had recently been as high as 64 cents, though the bank had to cut it to 32 cents the previous October.

"No trail," May reminded Gifford two minutes later, at 5:59 p.m.

"Only stated in the context of a horrible economy!!! Will effect everyone..." Gifford replied.

"good comeback. Holy (expletive) on the people" May wrote.

"Amaaazing..." Gifford wrote at 6:03 p.m. That's the end of the document.

Read more at Charlotte.com.

"(The Ken) is a gigantic failure."

Tags: , , , , , , , , , , ,

Pin It
Submit to Reddit
Favorite

Comments

Subscribe to this thread:

Add a comment

Creative Loafing encourages a healthy discussion on its website from all sides of the conversation, but we reserve the right to delete any comments that detract from that. Violence, racism and personal attacks that go beyond the pale will not be tolerated.

Search Events

www.flickr.com
items in Creative Loafing Charlotte More in Creative Loafing Charlotte pool

© 2017 Womack Newspapers, Inc.
Powered by Foundation