The B of A/Merrill Drama: SEC Says B of A Didn’t Fire Top Lawyer for Whistle Blowing

As part of a $150 million settlement with the Securities & Exchange Commission, the SEC has indicated in court filings that Bank of America’s (BAC) former top lawyer, Timothy Mayopoulos, was fired in December of 2008 to make way for future CEO Brian Moynihan, not because of his advice on the Merrill Lynch acquisition, directly contradicting the position taken by�New York Attorney General Andrew Cuomo, who sued B of A on Feb. 4.

(Mayopoulos is now top lawyer with Fannie Mae (FNM))

In a long and winding tale of frantic legal consultation, Bray describes how court papers show Mayopoulos had requested meeting with B of A’s CFO at the time, Joe Price, up until the very day he was fired, in order to consult about whether BAC had to tell the SEC of mounting losses at Merrill, which had risen to $10 billion at the time. (Merrill ultimately had a loss of $28 billion for 2008.)Though it seems as if Mayopoulos may have been about to blow the whistle — indeed, that’s what New York Attorney General Andrew Cuomo seems to believe — the SEC concludes former B of A CEO Ken Lewis merely wanted to clear the runway for Moynihan to be close to the throne:Mayopoulos was terminated in an attempt by Lewis to avert the imminent departure of the bank’s then-head of global corporate and investment banking, Brian Moynihan, by offering Moynihan the position occupied by Mayopoulos and upgrading the position to one that directly reported to the chief executive officer. There is no evidence that Joe Price, Bank of America’s then-chief financial officer who had consulted Mayopoulos on disclosure in November and December, had any knowledge of, or participation in, the decision to terminate Mayopoulos.

In a long and winding tale of frantic legal consultation,�Dow Jones Newswires’s Chad Bray this afternoon�describes how court papers show Mayopoulos had requested meeting with B of A’s CFO in December of 2008, Joe Price, up until the very day Mayopoulos was fired, in order to consult about whether BAC had to tell the SEC of mounting losses at Merrill, which had risen to $10 billion at the time. (Merrill ultimately had a loss of $28 billion for 2008.)

Though it seems as if Mayopoulos may have been about to blow the whistle,�the SEC concludes former B of A CEO Ken Lewis merely wanted to clear the runway for Moynihan to be close to the throne:

Mayopoulos was terminated in an attempt by Lewis to avert the imminent departure of the bank’s then-head of global corporate and investment banking, Brian Moynihan, by offering Moynihan the position occupied by Mayopoulos and upgrading the position to one that directly reported to the chief executive officer. There is no evidence that Joe Price, Bank of America’s then-chief financial officer who had consulted Mayopoulos on disclosure in November and December, had any knowledge of, or participation in, the decision to terminate Mayopoulos.