Bank of America's legal liabilities cost shareholders $91 billion since 2008, says robert s. Sutter. Shareholders gave four board members a resounding boo at a meeting in May 2015. Only 67% of shares cast were in favor of board's corporate-governance committee chairman. The day before the meeting, sutter met privately with Chairperson of the audit committee.
Bank of America's legal liabilities cost shareholders $91 billion since 2008, says robert s. Sutter. Shareholders gave four board members a resounding boo at a meeting in May 2015. Only 67% of shares cast were in favor of board's corporate-governance committee chairman. The day before the meeting, sutter met privately with Chairperson of the audit committee.
Bank of America's legal liabilities cost shareholders $91 billion since 2008, says robert s. Sutter. Shareholders gave four board members a resounding boo at a meeting in May 2015. Only 67% of shares cast were in favor of board's corporate-governance committee chairman. The day before the meeting, sutter met privately with Chairperson of the audit committee.
How did Bank of Americas legal liabilities cost its shareholders
$91 billion since 2008?
From personal experience, I would argue that it is because the companys board has been AWOL. Other shareholders seem to agree. When they met on May 6, 2015 to elect the companys directors and approve various proposals such as those relating to its pay practices, Bank of America shareholders gave four board members a resounding boo. Only 67% of shares cast were in favor of Thomas May, who runs the boards corporate-governance committee, down from 98% last year. Three other board members up for election received only 72% support from shareholders, well down from last years figures. The day before the shareholder meeting, I met privately with Sharon Allen, Chairperson of the Audit Committee of the board. I hoped to discuss her role in protecting the shareholders from the mischief of Bank of America management. What occurred at was very revealing. The meeting arose as a result of information gleaned from a longtime battle I have waged with the bank over an $83,000 mortgage dating back to 1996 and resulting in the loss of my home. As a business person knowledgeable about corporate governance issues I knew that directors have fiduciary duties to protect shareholders and other stakeholders from management improprieties. I asked for the meeting to share with the audit
committee the troubling information I had learned during my
fight with the bank. Perhaps I was nave, but I expected the audit committee to listen to my story and to resolve my issues believing that such a resolution would be in the interest of all involved. I remembered how the Chairman of Enrons Audit Committee testified before Congress saying: nobody told me anything. I wanted to make sure the Bank of America Board was aware of fraudulent practices at the bank dating back to 1996. Ignorance cannot be used as an excuse. I had asked that James Cheek, independent outside disclosure counsel for the audit committee, attend the meeting. He was appointed to his post under settlements the bank reached with the Securities and Exchange Commission and the New York State Attorney General. But Mr. Cheek did not appear. In his place was Jana Litsey, chief of litigation for the bank, who dominated the meeting in an attempt to sanitize the conduct of Management. Rather than getting answers from Ms. Allen relating to her fiduciary duty, I heard excuses from Ms. Litsey. Despite my good faith effort to advise Ms. Allen of the banks practices, I was stonewalled when asked for her point of view. Though the Bank of America board is supposed to be independent of management, it clearly was not in this meeting. My insight on the subject results from the fact that on March 1, 1996 Nationsbanc Mortgage Corporation, a predecessor of Bank of America, fraudulently invoked the jurisdiction of the Cuyahoga County Court of Common Pleas by claiming to be the owner and holder of my note and mortgage. This was simply
untrue. In Ohio, the Ohio Supreme Court determined that a
plaintiff in a foreclosure action must have standing at the time it files the complaint in order to invoke the jurisdiction of the court. (Fed. Home Loan Mtge. Corp. v.Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017at 41-42.) After pretending to own my note and mortgage, the bank continued to litigate against me vigorously for over 11 years, hiring a major law firm Jones Day. All over an $83K mortgage. We lost our home of 29 years in 2007 under the color of law. Where is the board of directors at Bank of America in all of this pursuant to their fiduciary responsibilities to make sure the bank is run in the best interests of shareholders and stakeholders? I can tell you by experience, nowhere to be found. Without independent directors protecting the interests of shareholders and stakeholders a management proven to be too big to fail and too big to jail will only be emboldened to continue the actions that have proved so harmful to so many. How harmful? Consider these figures from Bank of Americas most recent annual report. Excluding expenses of internal or external legal service providers, litigation-related expense of $16.4 billion was recognized for 2014 compared to $6.1 billion for 2013. The annual report also makes references to managements inability to determine possible liabilities related to its mortgage
practices. This is not rocket science, my past requests for audits
of compliance made to management and the board could certainly have led to quantifying for shareholders the exact exposure amounts to be included in the banks annual report and federal filings. This is a blatant omission of disclosure by Management. Federal securities laws also impose liability on directors for intentional or reckless misrepresentations or material omissions made in offering documents or proxy solicitations. In short, the Bank of America board must shape up or ship out.
09-09-09 SEC V Bank of America Corporation (1:09-cv-06829) DR Joseph Zernik's Affidavit and Appendices in Opposition To Settlement Then Pending Before The Court S