Bank Of America's CEO Surrounds Himself With His Buddies
Two seemingly unrelated stories breaking across the Bloomberg wire have caused some on Wall Street to speculate about the possibility of a major shakeup at Bank of America, the nation’s largest bank holding company when ranked by total assets.
At midnight on September 21, Bloomberg News reported that Bank of America is firing up to 400 of its global banking and market division employees, citing sources who have been briefed on the matter. CNBC also independently confirmed these layoffs.
The employees range in seniority from managing directors to junior analysts.
Later in the morning on September 21, Bloomberg News ran another story reporting BOA CEO Brian Moynihan’s hiring of three key executives into “influential posts”. Although none of the executives report directly to Moynihan, all three executives — Terry Laughlin, Mike Lyons, and Lauren Mogensen — worked with Moynihan during his Fleet days. Tony Plath, a professor of finance at University of North Carolina at Charlotte, observes: “Those people are there to tell Brian what is going on and to make sure he doesn’t get stabbed in the back.”
There has been speculation that Bank of America may need to drastically slim down in order to comply with new regulatory capital rules. Analyst Dick Bove believes that BOA may need to part with certain divisions of Merrill Lynch, or shed other assets. Some watching the company believe it may sell part of its stake in Blackrock. And insiders say that a blood bath may be coming next to the fixed income unit, with many in both the front and back offices losing their jobs.
You have to wonder if the three executives who joined Merrill from the outside in recent years — Thomas Montag, Sallie Krawcheck , and Charles Noski — are nervous about three new executives with long-standing relationships so close to Moynihan.
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