Bank of America (NYSE: BAC) CEO Candidate Facing Scrutiny

Greg Curl, the Chief Risk Officer for Bank of America (NYSE: BAC) and one of the leading internal candidates for the Chief Executive Officer (CEO) position at the bank is currently being sought for additional questioning by the office of New York’s attorney general, Andrew Cuomo.  The New York Times reported on Tuesday that the office of the New York attorney general contacted Bank of America lawyers and expressed concern over previous testimony given by Curl regarding its takeover of Merrill Lynch.

The concern by Bank of America over New York’s interest in Curl is particularly troubling as Bank of America’s Board of Directors is currently meeting to select a new CEO to replace the retiring Kenneth Lewis, and Curl is considered to be one of the top internal candidates.  The difficult decision now lies with the Board to select an internal candidate such as Greg Curl and continue to deal with distraction of the the Merrill imbroglio, or an outside candidate who is untarnished and not under investigation.

The current CEO of Bank of America, Kenneth Lewis, announced his retirement at the end of September amid a multitude of internal and external problems, a slumping economy, and his own legal battle with New York Attorney General Andrew Cuomo over disclosures of Merrill Lynch bonus payments just before the Bank of America acquisition in January.

As the Chief Risk Officer for Bank of America, and known for his deal making skills, Greg Curl led the negotiations with Merrill Lynch representatives for the takeover of the failing firm.  State and federal lawmakers have since pilloried Bank of America, and Curl, over the failure to disclose not only the huge losses at Merrill Lynch, but the millions of dollars paid to Merrill executives prior to shareholder approval of the deal on December 5 of last year.

The New York attorney general’s office opened an investigation in the spring of 2009 and questioned Curl during the spring and summer.  A Bank of America spokesperson stated that “Mr. Curl provided his testimony on two occasions, several months apart, to the best of his recollections of events that had occurred as much as one year earlier. We are confident in the consistency and truthfulness of the Bank of America testimony.”

Regardless of the outcome or length of the investigation of Greg Curl, it remains to be seen whether the Board of Directors will choose to appoint him as the new CEO, or strike off in the direction of hiring an outsider to right the troubled banking giant.  The two day Board of Directors meeting will commence on Tuesday with the new CEO appointment likely being a top priority.