- The Washington Times - Thursday, October 1, 2009

NEW YORK | Ken Lewis, the embattled chief executive officer of Bank of America Corp., is leaving the company, succumbing to nearly a year of strife that followed his company’s acquisition of Merrill Lynch & Co.

The bank said late Wednesday that Mr. Lewis, 62, would retire as CEO and also leave the company’s board by the end of the year. The company said his successor will be selected by the time he steps down Dec. 31.

The news, coming after shareholders had stripped Mr. Lewis of his chairman’s title earlier this year, wasn’t surprising because of the intense pressure he came under after the Merrill deal. Mr. Lewis had said he would stay on as CEO until after the company’s financial problems were resolved, a process expected to take several years.

However, with the bank also under heavy criticism from government officials, Mr. Lewis was increasingly seen as vulnerable.

“He’s had a big target on his chest for the whole Merrill Lynch deal, and I can only imagine the emotional stress he’s endured ” said Alan Villalon, senior research analyst at Minneapolis-based First American Funds, which owns Bank of America stock.

Since the Merrill deal closed Jan. 1, it was learned the investment bank with the knowledge of Bank of America executives gave billions of dollars in bonuses to employees even as it asked for more bailout money from the government. The deal was made a year ago at the height of the financial crisis.

New York Attorney General Andrew M. Cuomo last month subpoenaed five members of Bank of America’s board as part of an investigation into the Merrill deal.

Bank of America had settled a separate investigation into disclosures about the Merrill bonuses with the Securities and Exchange Commission, but a federal judge threw out that $33 million settlement last month, saying it was unfair and needlessly penalized the bank’s shareholders. The judge ordered the case to go to trial Feb. 1.

Investors may have some concerns over the lack of an immediate successor, but those will likely be temporary, Mr. Villalon said.

“They probably won’t operate long without a CEO,” he said. “If somebody comes from the outside, or even internally, it gives a set of fresh eyes.”

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