Justifiably angry BofA shareholders

Fortune reports this afternoon how NationsBank† Bank of America shareholders (like me) are understandably angry about the (apparently) lousy due diligence done in the September acquisition of Merrill Lynch.

The M&A consultants got $20m for a weekend’s worth of work, but the more serious problem is the contribution of the Merrill boat anchor to the $95b drop in BofA market cap since then (or the $70b lost since the election).

Unfortunately, the accountability here is pretty much nil. The BofA board can say this is a one-time deal, based on incomplete information during turbulent times — which is all true. The purchase was a big risk, and it turned out badly.

Less convincing is when they were sold a bill of goods on Merrill: making the tough decisions is supposedly why they get so much money. They made the decision to buy — not the consultant or the shareholders. Even if there were recourse against the consultant, it would be for some fraction of the fees, not the incidental and consequential damages.

Absent Merrill, BofA would probably be the largest healthy bank in America, the unchallenged position it enjoyed in the 1960s and 1970s. Now many suspect that it’s the next Citibank.

† Bank of America was a San Francisco-based bank founded in 1904 (as the Bank of Italy) by A.P. Giannini. Once the world’s largest commercial bank, it disappeared when its brand and assets were acquired by Charlotte-based NationsBank in 1998.