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How Did Bank Of America Breach Ethical Standards

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How Did Bank Of America Breach Ethical Standards
1. Did Bank of America breach ethical standards by failing to disclose the extent of Merrill’s losses and its agreement to pay year-end bonuses to Merrill executives? Bank of America agreed to pay $2.43 billion to settle a class-action lawsuit with investors who owned or bought its shares when the bank purchased Merrill Lynch in 2008. Bank of America acquired Merrill Lynch in late 2008 during the financial crisis. The $50 billion deal came as Merrill Lynch was within days of collapse, effectively rescuing it from bankruptcy. (Patel, n.d.) In retrospect I believe that the CEO of Bank of America Mr. Lewis, had a civil and ethical duty to inform the shareholders who were at financial risk of the adverse conditions that were present in the Merrill Lynch merger. The same measure should be held for the CEO Merrill Lynch John Thain, who misguided shareholders by not disclosing the financial state that Merrill Lynch was truly in. Even continuing to pay bonuses as if the companies performance justified this. From a different viewpoint, Mr. Lewis was also holding responsibility for the overall health of the U.S. and global financial system. Another major crisis to the financial system would have had adverse impacts on Bank of America shareholders and customers. Millions of shareholders clearly had a major stake in the decisions facing Lewis. The CEO must also take into …show more content…
Analyze the leadership changes at Bank of America after the financial crisis. Why might/might not these changes be effective? Its my personal belief that by eliminating the executives involved Bank of America was openly admitting guilty for their lack of disclosure to shareholders. Bank of America appears both unwilling and unable to address the causes of its reputational risks through improved practices and serving customers. Without sound practices, multibillion-dollar legal costs are lurking behind every corner. And without customer service, the company is vulnerable to disruption. (Reeves,
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