Merrill fallout claims BoA's Thain

23 January 2009

Former Merrill Lynch CEO John Thain has resigned from his position at Bank of America (BoA) as the fallout from the firm's record fourth-quarter losses continued.

According to reports, Mr Thain handed in his resignation following a meeting with BoA chief Kenneth Lewis just three weeks after the bank's acquisition of Merrill Lynch was officially completed.

Sources told Bloomberg that Mr Lewis had lost confidence in the former Goldman Sachs executive after apparently feeling he was not adequately updated about the scale of Merrill's $15.4 billion loss.

Mr Lewis was also said to be upset about bonuses paid to Merrill employees and the departure of the firm's head of investment banking, Gary Fleming, amid rumours that he was "driven out" by Mr Thain.

However, other insiders claim BoA executives had daily access to Merrill's results during the fourth quarter and that they were "deeply involved" in discussions about year-end bonuses.

Bloomberg said Mr Thain's recent behaviour implies he did not anticipate his departure. He reportedly spent $1.2 billion on refurbishing his office at the World Financial Centre in New York and as recently as this week had purchased BoA shares.

His resignation yesterday saw that stock fall by 15 per cent.

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development