A week after Bank of America gets $20B in federal welfare, John Thain bids adieu
Posted by
Brian (aka trav007)
Jan 22 '09, 11:05
|
CNBC
By: Charlie Gasparino, On-Air Editor | 22 Jan 2009 | 02:01 PM ET
Former Merrill Lynch CEO John Thain agreed to resign from Bank of America less than a month after the brokerage giant was acquired by the nation's largest bank for $19.4 billion.
The decision came after Thain met this morning with Bank of America CEO Ken Lewis to discuss his future at the recently merged firms. Thain became Bank of America's [BAC 6.02 -0.66 (-9.88%) ] head of global banking, securities and wealth management after the merger closed on Jan. 1.
Thain's resignation comes less than a week after Bank of America was forced to seek $20 billion in government bailout money to absorb Merrill, which it agreed to buy last September amid the credit crisis.
The extra government money was needed because of an unexpected $15.31 billion loss by Merrill in the fourth quarter. The government also agreed to share in losses on about $118 billion in Merrill debt.
The relationship between Lewis and Thain has been strained because of Merrill's unexpectedly large loss. Lewis' own job status has come under question because of the Merrill acquisition and as Bank of America shares have tumbled.
"This is a huge crisis of credibility," said David Dietze, chief investment officer at Point View Financial Services in Summit, New Jersey. "Someone has to fall on a sword."
|