Auditors Investigate Communication Breakdown In Upper Echelons At BofA
The Wall Street Journal reports an internal investigation is underway at Bank of America to figure out why it disclosed bad news to investors without first consulting the bank's top finance executive. On March 18th, BofA issued a press release vaguely stating that its plan to raise stock dividends had been rejected by federal regulators. A few days letter, the bank was more explicit in a filing with the SEC, saying the Federal Reserve had "objected" to the proposed dividend increase following a "stress test" of all major U.S. financial institutions. Shares in the bank dropped nearly 4 percent in the days after that disclosure. But the Wall Street Journal reports BofA CFO Chuck Noski didn't know the SEC would be so revealing and the episode raises questions about CEO Brian Moynihan's management style. From the Journal: "When he got the job at the beginning of 2010, Mr. Moynihan pledged to U.S. regulators that he would seek consensus among bank executives to improve the company's decision making. Regulators had been concerned that prior management had become too insular, leading to poor decisions prior to the financial crisis. "But changing his stripes hasn't been easy. Before his promotion, Mr. Moynihan was known for saying "this is the way" and "it shall be done," said one person familiar with the situation." "The 51-year-old CEO "is really working at changing his style" but there are still signs of struggle, said the person familiar with the situation."