Bank of America: Here Are Our New Executives…Oh Yeah, and We’re Being Sued
Bank of America (NYSE:BAC) has named new heads of investment and corporate banking in the Middle East and North Africa. Wadih Boueiz, a 13-year veteran of Merrill Lynch, and Hakim Karoui will co-head the integration of the two businesses in the region.
“This is a very smart move. Integrating the corporate and investment bank will help BofA to leverage its balance sheet and grab more business opportunities in emerging markets,” said a source familiar with the matter, according to Reuters. Bank of America’s 2008 acquisition of Merrill Lynch helped create the infrastructure for this model to succeed in emerging markets.
This change in management is the newest development in a round of executive reshuffling that began earlier in the year. Bank of America’s former boss of Middle East and North African investment banking was hired by Italian bank UniCredit. On October 12, Bank of America appointed Aukse Jurkute and Roman Zilber to co-head an integrated corporate and investment initiative in Russia. Several top players at the bank, like well-known deal maker Andrea Orcel — now at UBS AG (NYSE:UBS) — have recently left.
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Bank of America has also been targeted by a lawsuit filed by U.S. homeowners. According to Bloomberg Businessweek, Bank of America, JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C), and The Royal Bank of Scotland Group (NYSE:RBS), among others, are being sued because of their involvement in the LIBOR manipulation scandal. The plaintiffs allege that the manipulation made their mortgage repayment rates more expensive, and led to the repossession of their property.
Barclay’s (NYSE:BCS) is the only bank to have settled with regulators over the scandal. The bank paid 290 million pounds ($469 million) and saw two executives resign. It’s unclear exactly what role Bank of America played in the alleged manipulation, but this lawsuit piled on to a growing stack filed against the bank recently.
New York District Attorney Eric Schneiderman has already sued Bank of America over its use of the MERS mortgage registry earlier in the year, and could target the bank again in a new round of lawsuits related to unsavory practices surrounding mortgage-backed securities sold during the financial crisis.
Additionally, the government and Bank of America are being accused of contaminating the independent review process regarding foreclosures. The Office of the Comptroller of the Currency is supposed to be evaluating millions of foreclosures by multiple banks between 2009 and 2010. However, it has been suggested that banks have decisive influence over the process, homeowners lack any real authority to challenge the review, and the government is not providing the support it promised.