Bank of America: Key Acquisitions
Bank of America Corp. (BAC), also known as Bank of America and BofA, is an American multinational investment bank and financial services holding company. It is the second-largest banking institution in the United States and services individuals, small and midsize businesses, corporations, and governments.
Bank of America’s areas of banking includes investment management, financial management, risk management, investment banking, wealth management, and commercial banking.Bank of America’s Merrill Lynch Acquisition
Bank of America’s acquisition of Merrill Lynch, Pierce, Fenner & Smith, Inc. in 2008 saved the latter from bankruptcy. It also made BofA the world’s largest financial services company, the leading underwriter of global high-yield debt, the number three largest underwriter of global equity, and the ninth biggest adviser on global mergers and acquisitions. While the deal was originally valued at $50B, Bank of America shares dropped soon after the merger closed and the final price ended up being around $29.1B.
Merrill Lynch, Pierce, Fenner & Smith became two Bank of America divisions: Bank of America Merrill Lynch (BAML), now BofA Securities, and Merrill Lynch, now Merrill.
BofA Securities, which is Bank of America’s multinational investment banking division, offers services related to mergers, acquisitions, lending, equity and debt capital markets, risk management, trading, liquidity and payments management, and research.
Merrill, which is Bank of America’s investing and wealth management division, is headquartered in Manhattan. With over 14,000 financial advisors, Merrill oversees $2.3 trillion in client assets. It also runs the electronic trading platform, Merrill Edge.
Our experienced investment fraud attorneys at Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyer.com) represent investors who have suffered losses because of the negligence or misconduct of a BofA Securities, Merrill Lynch, or another Bank of America broker or financial advisor.
SSEK Law Firm has recovered many millions of dollars for retail investors, retirees, businesses, institutional investors, and high-net-worth individual investors and their families. Contact us at (800) 259-9010 today.Bank of America Has Been Subject to Many Investigations in Recent Years
Since the 2008 financial crisis, Bank of America has been the subject of numerous investigations, lawsuits, and controversies. Here are several of them:
- 2009: After receiving $45B in bailout funds from the Troubled Asset Relief Program (TARP), and possibly another $5.2B in government bailout money by way of American International Group (AIG), Bank of America paid back the $45B and left the program. This occurred following concerns by US lawmakers about how program recipients were spending the funds.
- 2009: The Securities and Exchange Commission (SEC) fined Bank of America $33M over an agreement to pay up to $5.8M in Merrill bonuses, which shareholders weren’t told about while deciding whether to approve the acquisition. Some $3.6B in these bonuses were paid, including a $33M bonus to at least one individual. Several weeks after the Commission announced its fine, a federal judge approved a revised version of the settlement that raised the fine to $150M.
- 2010: Bank of America paid $137.7M, including $25M, to the Internal Revenue Service (IRS) to settle municipal bond fraud allegations. The US government had accused BofA of defrauding hospitals, schools, and state and local government organizations.
- 2012: A class action securities fraud lawsuit accused the bank of not telling shareholders about key information regarding the Merrill acquisition before the merger vote was settled for $2.4B.
- 2014: To settle allegations that it sold toxic subprime loans and other mortgage-linked securities, Bank of America agreed to a nearly $17B settlement with the US Justice Department. This included paying $7B to municipalities, pension funds, homeowners, and borrowers that lost money because of faulty loans.
- 2014: Bank of America agreed to pay $6.3B to Freddie Mac and Fannie Mae over mortgage fraud claims accusing Countrywide, which the bank acquired in 2008, of approving mortgage loans to risky borrowers while making taxpayers guarantee billions of dollars in bad loans. BofA also agreed to repurchase $3.2M of mortgage bonds from Fannie and Freddie.
In addition to acquiring Merrill Lynch in 2008, Bank of America has also acquired several financial institutions and registered broker-dealers. Below, is a list of some of the key acquisitions made by Bank of America in the last two decades.
- 2004: FleetBoston Financial, then the seventh-largest bank in the US, for $47B.
- 2005: Credit card giant MBNA for $35B (now FIA Card Services), making BofA a leading foreign and domestic credit card issuer
- 2006: United States Trust Company for $3.3B from Charles Schwab Corp.
- 2007: LaSalle Bank Corporation from ABN AMRO for $21 billion.
- 2008: Countrywide Financial (now Bank of America Home Loans) for $4.1B
For over 30 years, SSEK Law Firm has successfully represented thousands of investors. Our savvy broker fraud lawyers are not afraid to fight for our clients against Bank of America or any of the other big Wall Street firms.
We work with investors in the United States and abroad with claims against US-based firms in cases alleging unsuitability, churning, unauthorized trading, misrepresentations and omissions, failure to supervise, and other types of securities fraud.