Sunday, September 29, 2013

The CEO Who Didn’t Know Too Much - WSJ

The CEO Who Didn’t Know Too Much - MoneyBeat - WSJ
"At BofAa there is a rare glimpse into how those executives slip away from culpability. Mr. Moynihan ran a major division, served on credit committees and integration committees and eventually was tapped to become CEO, but in recalling one of the biggest and transformational deals in the bank’s history, his memory was painfully short.
When presented a financial report, Mr. Moynihan is unsure if he’s seen it or if the numbers are correct. He asks the questioner to direct the question to whoever prepared the report.
“Somebody reported to somebody that reported to me would have been the people working on this,” Mr. Moynihan said. “This is very small part of what they did. I was on the steering committee, I was one of the direct reports, but it was not something that I was involved in day-to-day.”
On and on it goes like this. Dates are forgotten. Documents are sketchy. Decisions were made by someone else. Discussions? What discussions. The transcript is a tangled and frustrating mess of amnesia."
"..., there is something disturbing about Mr. Moynihan’s inability to recall even the most basic information about the Countrywide deal and its integration. For instance, when asked if he knew that Countrywide Bank originated all of the mortgages for Countrywide Financial, Mr. Moynihan said, “I don’t recall that, no.”
Big banks seem to place a premium on forgetfulness. They settle fraud cases stemming from the financial crisis for billions of dollars and hope investors will forget, if not forgive."
"Since Mr. Moynihan ascended to the role of chief executive in 2010, Bank of America has paid out more than $50 billion in settlements, the vast majority of them tied to its mortgage business or those of Countrywide."

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