Saturday, February 26, 2005

It looks as if Bank of America misplaced something last December:

Bank of America Corp. has lost tapes containing personal financial information for 1.2 million accounts of federal employees, including US senators and members of the Defense Department.

The tapes contained personal information, including Social Security numbers, addresses, and account numbers for employees in several government agencies....

Bank of America first discovered in December that the tapes had been lost and alerted the Secret Service, but it did not make the loss public until yesterday....

According to a spokesman for the Defense Department, 900,000 of the customers were defense employees....

Oh well -- at least the chairman of Bank of America was severely punished at the end of December:

An eight-figure severance package and a special deal on Boston Red Sox tickets are among the benefits Bank of America (BAC) Chairman Charles "Chad" Gifford will get when he retires on Jan. 31.

Gifford will receive severance pay of about $16.4 million, plus cash incentives of up to $8.67 million, when he retires, the No. 3 U.S. bank said in a Securities and Exchange Commission filing.

...According to the filing, Gifford will for the next five years be paid $50,000 a year for consulting services, and given use of a company jet for up to 120 hours a year.

He will also have the opportunity to buy up to four tickets for as many as 15 Red Sox baseball games of his choosing each year "for as long as he requests," the filing said....

Gifford had been CEO of Fleet Financial before Bank of America bought it and made him BofA's chairman. The CEO (and now chairman) of BofA is Kenneth Lewis. He certainly seems to run a tight ship:

Enrico Bondi, the man overseeing the restructuring of bankrupt milk giant Parmalat, says he will likely add BofA to a roster of financial firms (Citigroup, Credit Suisse, UBS, Deutsche Bank et al.) he is suing over Parmalat's collapse. BofA's alleged sin was to cover up Parmalat's crumbling finances while peddling the Italian company's bonds to unsuspecting investors.

The Bondi threat follows recent testimony by a onetime BofA worker in Milan that he accepted $27 million in kickbacks for helping to fob off some of those Parmalat bonds when the company was teetering on insolvency.

"The reputation that [BofA] management built over the last few years is shot," says Richard Bove, an analyst at Hoefer & Arnett....

The bad news for the bank started in October 2002. That's when BofA and 17 other banks were hit with a suit alleging they sold WorldCom bonds, now close to worthless, without the diligence that was due. BofA, rejecting an offer to settle for $447 million, is fighting the suit.

In September last year New York Attorney General Eliot Spitzer sued BofA for helping hedge fund Canary Capital illegally trade mutual fund shares. BofA's Lewis fired several staffers and paid $375 million to settle the charges, a quick response that won cheers from Wall Street.

Then, in February, a group of institutional investors, including HSBC, sued the bank, alleging that it allowed a hedge fund client to print out phony returns bearing the bank's name before it lost $571 million and was shut down. The bank denies any wrongdoing.

In March BofA paid $10 million to the Securities & Exchange Commission for not handing over e-mails promptly during an insider trading investigation and, most damning, not disclosing that some of the requested documents had been destroyed. In July BofA paid $69 million to settle a suit brought by Enron shareholders accusing it of off-balance-sheet maneuvers designed to hide debt. BofA says it paid to avoid the "distraction" of litigation and that it "broke no law." ...

Sounds like just the sort of outfit you want handling sensitive personal data about senators and Defense Department employees, no?

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