In-House Counsel

SEC Says BofA GC Didn’t Get Fired over Legal Advice

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The Securities and Exchange Commission is putting a damper on speculation that former Bank of America general counsel Timothy Mayopoulos got fired because of his legal advice.

In a court filing on Wednesday, the SEC says Mayopoulos got fired to create a position for Brian Moynihan in an effort to keep him from leaving, according to stories in the New York Law Journal and the Wall Street Journal Law Blog. Moynihan served as general counsel for 44 days before taking over as CEO.

The SEC position reinforces congressional testimony by Moynihan that, before his appointment as general counsel, he had planned to leave Bank of America because he was not pleased with the position he would get after the merger.

Mayopoulos had told the House Oversight and Government Reform Committee that he was given no reason for his dismissal. He recounted how the bank’s chief risk officer told him to leave—immediately. A human resources representative asked him for his corporate ID, company credit card, office keys and BlackBerry.

Some panel members had suggested the dismissal could have been triggered because officials didn’t like Mayopoulos’ legal advice on whether the bank had a legal reason to escape from a planned merger with Merrill Lynch.

The SEC explained the firing in a supplemental statement of facts filed in the SEC’s case against Bank of America. U.S. District Judge Jed Rakoff requested the information.

Other papers disclosed in the case reveal that then-CEO Ken Lewis was briefed on legal decisions not to reveal mounting losses at Merrill Lynch before shareholder approval of the merger, the Wall Street Journal (sub. req.) reports. Lewis relied on the advice of “expert legal counsel,” according to his lawyer, Mary Jo White.

Mayopoulos has testified he counseled against disclosure, but he wasn’t aware of a $2 billion increase in the estimated loss at Merrill, an assertion disputed by Bank of America’s finance chief, the Wall Street Journal says.

The American Lawyer reports that there was “near-instant consensus” about not needing to disclose among Lewis, Mayopoulos and outside lawyers at Wachtell, Lipton, Rosen & Katz.

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