Chief Executive Officer Ken Lewis (AP)
In the heat of Bank of America’s controversial marriage with Merrill Lynch, the man serving as general counsel for BofA wasn’t authorized to practice law, The Post has learned.
Brian Moynihan was named general counsel on Dec. 10, 2008, but was not technically allowed to offer crucial legal advice until more than a week later, when he re-activated his status with the Massachusetts Board of Bar Overseers.
Moynihan is now the president of BofA, and one of two internal candidates the board is considering to replace outgoing CEO Ken Lewis.
The legal situation is raising eyebrows among congressional investigators, who are probing whether BofA and Lewis strong-armed the government into providing billions of dollars to backstop against Merrill losses.
“This is another fact that leads me to believe there could be something rotten in the cotton,” Ed Towns (D-Brooklyn), chairman of the Congressional Oversight Committee, told The Post. He is investigating the BofA/Merrill merger.
A BofA spokesman, Larry Di Rita, told The Post that Moynihan did what he needed to do to comply with state rules.
“Mr. Moynihan has been a member in good standing of multiple bars for 25 years. When appointed general counsel, he moved quickly to update his status from ‘Inactive’ to ‘Active,’ ” he said. “By any reasonable and sensible interpretation, Mr. Moynihan discharged his responsibilities within the spirit and letter of the requirements.”
But observers that spoke with The Post said it’s not customary for a serving general counsel to lack an active membership with a state bar association.
“This situation definitely raises ethical questions,” said Bill Singer, securities attorney at Stark & Stark. He added that the Securities and Exchange Commission does not require a person acting as general counsel to be an active member.
Moynihan graduated from Notre Dame Law School in 1984 but hadn’t practiced since 2005.
He was appointed BofA general counsel after the departure of Timothy Mayopoulos. Mayopoulos left his duties as general counsel after recommending to Chief Financial Officer Joseph Price on Dec. 3 that estimated fourth-quarter losses for Merrill weren’t going to be as high as a $9 billion estimate that other BofA officials were projecting.
On Dec. 17, Lewis reached out to the government claiming that losses at Merrill were sufficient that the merger should be nixed — a notion that Mayopoulos did not agree with, according to sources.
According to the Massachusetts Board of Bar Overseers, Moynihan re-activated his bar registration on Dec. 18 of last year.
The circumstances surrounding the general counsel role are big questions for investigators, including New York Attorney General Andrew Cuomo and Towns’ office.
Some argue that BofA could have replaced Mayopoulos with his second-in-command, Edward O’Keefe, but instead opted to bring Moynihan out of inactive duty.
The bank named O’Keefe general counsel this August.