Ken Lewis to Get Lesson on Fiduciary Duties

Tomorrow, Ken Lewis, the head of Bank of America goes in front of Congress to testify on the events leading to the Bank of America acquisition of Merrill Lynch. The lesson that he gets should be one that every CEO should be required to adhere to.

Ken Lewis is going to say that Paulson and his successors in the Obama administration and others twisted his arm to go through with the Merrill Lynch acquisition after he realized that Merrill was as disaster.  He is going to expect that the liberals in Congress are going to be sympathetic and he was acting in the public good and trying to avoid exacerbating a financial crisis.

I am not a Bank of America shareholder, but I hope that tomorrow is Ken Lewis’ last day.  As a small investor, I feel that it is important that CEOs understand that their fiduciary duty is to investors, and not to the government or anybody else in our system. 

Jason Rodgers
Jason Rodgers: Jason Rodgers was an experienced research analyst for a major bank prior to retiring to run his own investment consultancy in beautiful Lihue, Hawaii. Jason contributed articles to BestCashCow from 2008 to 2014.

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  • Sam Cass

    June 11, 2009

    I'm no Ken Lewis fan but you can't throw him under the bus for this. Ken Lewis' fiduciary responsibility is keeping BofA open and running. When your regulators come and tell you to do something, you have to do it. Banks operate at the pleasure of the government, not their investors. Investors are the ones who are to blame. They should understand there is no sure thing with a bank and that it is a heavily regulated and government controlled industry. And about to get more so.

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