Lessons from Bank of America

Widely honored for its corporate philanthropy and community involvement, Bank of America suffered a reputational setback when it admitted to the Justice Department that it had engaged in a conspiracy to rig bids in the municipal bond derivatives market. Story here.

To its credit, the Bank stepped forth willingly to report its misconduct and was granted leniency as part of the Justice Department's Antitrust Corporate Leniency Program. Nevertheless, Bank of America must pay $137 million in restitution.

Going forward, it helps the Bank that several employees were convicted of wrongdoing, and the abuse was not widespread. Nevertheless, this case points up the importance of strong financial controls and accountability--even for the most responsible corporate citizens. It also points out the importance of immediate remedial action by a corporation, once it discovers bad behavior.

(c) 2010 Adonis Hoffman