As BofA (BAC) Replaces Board, Sources Say It Has Been Operating Under Secret Regulatory Sanction
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Sources, cited in a WSJ article this morning, have suggested that Bank of America (NYSE: BAC) and federal regulators have previously agreed to a Memorandum of Understanding, allowing the bank to operate under a veil of secrecy while it has been repopulating its Board of Directors.
According to the people familiar with the situation, the agreement was penned in early May, just after BofA's Ken Lewis was relieved of his Chairman role by shareholders. Since then, seven directors have been booted from BofA's Board, while four new directors have been appointed.
The sources have also indicated that BofA will face a series of deadlines in July and August, but terms related to these dates could be revised if sufficient action isn't taken, as determined by government officials.
The news of this "under the radar" agreement couldn't really come at a worse time; as I am typing this, former Treasury Secretary Hank Paulson is in Washington being grilled by Congress on his role in the supposedly forced acquisition of Merill Lynch by BofA.
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