Bank of America Corp. Vice Chairman Gary Lynch, the Wall Street lawyer brought in to help the lender clean up its financial crisis-era mess, is retiring.
Lynch, 66, will step down April 1, according to a statement on the Charlotte, N.C.-based bank’s internal website. He was the firm’s general counsel for four years before being succeeded by David Leitch in November 2015.
Bank of America spent more than any other U.S. lender to resolve legal and regulatory disputes in the wake of the credit crisis, largely tied to its acquisitions of Countrywide Financial Corp. and Merrill Lynch & Co. Chief Executive Officer Brian Moynihan has resolved most of the bank’s legal problems and is now focused on paring costs at the country’s second-largest lender.
Lynch’s departure brings an end to a career that spanned epochal chapters in the history of Wall Street.
From 1985 to 1989, as chief of the enforcement division of the U.S. Securities and Exchange Commission, Lynch led the SEC’s investigations of insider trading cases. He played a central role in the commission’s dogged pursuit of an obscure offshore trading scheme that eventually led to the arrest of Dennis Levine, a mid-level investment banker at Drexel Burnham Lambert Inc. who traded on inside information related to upcoming mergers and acquisitions.
That case helped break open one of the biggest financial scandals of the 1980s. The commission discovered evidence against arbitrager Ivan Boesky and ultimately, Michael Milken, the Drexel junk bond evangelist who revolutionized corporate finance. The SEC reached settlements with Boesky and Milken, while separately, they pleaded guilty to criminal charges brought by the Justice Department. Drexel filed for bankruptcy in 1990.
After the SEC, Lynch followed a well-worn path from the commission to a corporate law firm, joining Davis Polk & Wardwell LLP. In 2001, he was named general counsel at Credit Suisse First Boston, where he helped the investment bank resolve charges that it allocated lucrative stakes in dot-com firms’ initial public offerings to “friends and families” of favored clients.
In 2005, Morgan Stanley CEO John Mack hired Lynch to serve as the bank’s general counsel. In that position Lynch held a front-row seat for the financial crisis of 2008, during which Bear Stearns Cos. and Merrill Lynch were sold and Lehman Brothers Holdings Inc. filed for bankruptcy protection. A decision by the Federal Reserve to let Morgan Stanley and Goldman Sachs Group Inc. become bank holding companies helped shore up the two investment banks during the worst of the crisis.
In 2011, with Bank of America facing a morass of legal challenges and lawsuits, Moynihan hired Lynch as general counsel. In addition to settling many of the government’s cases, Lynch was willing to fight. The bank refused to accept charges that it defrauded Fannie Mae and Freddie Mac when its Countrywide subsidiary removed some of the normal checks on subprime loans and instead created a “high-speed swim lane” for these loans to be securitized and sold to the government-sponsored enterprises.
The bank lost the case at trial, but in 2016, an appeals court overturned the verdict, handing a victory to Bank of America and vindication to Lynch.
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