"Companies that find themselves facing these really big issues need people like Gary, and he’s clearly among the best," according to former SEC Commissioner Joseph Grundfest, who's now a Stanford Law professor.  He added that Gary Lynch is “a problem solver, in a way that transcends the narrow legal questions and is able to address the larger business and political policy issues.  And the reality is that a company like Bank of America has to simultaneously solve all of those questions."

Gary Lynch, 60, is joining Bank of America as Global Chief of Legal, Compliance and Regulatory Relations, a newly-created position.  General Counsel Ed O’Keefe will report to him.   Mr. Lynch will try to repeat his past successes with tackling legal disputes at Morgan Stanley and Credit Suisse.   However, Lynch is likely to face a greater variety of issues at Bank of America than at his previous firms.  BofA was among the 14 largest U.S. mortgage servicers that agreed with federal regulators to review all foreclosed loans from 2009 and 2010, and pay back losses in cases that were mishandled.

BofA CEO Brian Moynihan, 51, brought in Mr. Lynch - who returns to New York after being based in London since 2009 - to deal with lawsuits and investigations tied to soured loans from the housing boom, and other legal "skeletons in the closet."   For example, BofA, which last week posted its first profit in 3 quarters, had its capital plan rejected by the Federal Reserve last month.

"It’s a great challenge, and he’s more than up for it.  Regulators will be receptive to him because he has the experience and knows what their concerns are, but also because he’s a straight shooter."  -- Harvey Pitt, former SEC Chairman (2001-2003) who currently head Washington-based consulting firm Kalorama Partners.

        Gary Lynch Profiled.   Lynch started at the Securities and Exchange Commission in 1976 and headed the Enforcement Division from 1985 to 1989 - during which time he led investigations of Ivan Boesky, the former takeover investor who was convicted of insider trading, and Michael Milken, the high-yield bond chief at Drexel Burnham Lambert Inc. who went to prison for securities violations.

Lynch, who earned his law degree in 1975 from Duke University, and in 2001 went to Credit Suisse First Boston when John Mack became its CEO;  Lynch was one of Mack’s first hires.  Lynch helped negotiate a $100 million settlement in 2002 related to charges CS First Boston allotted sought-after shares of IPO's in exchange for investor kickbacks in the form of higher commissions.

Lynch was recruited to Morgan Stanley in 2005 by John Mack - who had recently returned to "his old stomping ground" - shortly after the firm lost a $1.57 billion verdict in a case brought by financier Ronald Perelman.  That verdict led the then-general counsel to step down. In 2007, the Morgan Stanley won an appeals court decision that overturned the verdict.

Less than 2 months after Mack stepped down as M. Stanley’s CEO, Lynch announced in February 2010 that he would give up his role as chief legal officer - though he remained with the firm as vice chairman and advised on policy and strategy issues until he left last month.

Lynch is among at least 3 former SEC enforcement directors helping oversee legal departments at the largest global banks.  Deutsche Bank AG General Counsel Richard Walker stepped down at the agency in 2001.  JPMorgan Chase & Co. top legal officer Stephen Cutler joined the firm in 2006, about a year after he left the SEC.

"Lots of people can litigate in court, but few people know how to negotiate with regulators because you’ve been there and done that yourself.  The major banks are still going to have complicated negotiations with the SEC and other financial regulators, and it’s good to have someone who knows how the other side thinks and how to persuade the other side."   -- John Coffee, Columbia U. Law Professor. 

[Bloomberg, 4/16]