The Bank of America
The bank of America has long been known for its extraordinarily outstanding services. It has been the leading service provider in America and most parts of the world. This is not only because it has a big name but because it provides a wide range of services therefore one can not avoid it in one way or the other. This work is therefore purposed to establish when this corporation was started, who started it, where it is currently located; its current headquarters, as well as identify its current Chief Executive Officer (CEO) and his board of directors. In addition, the work will also identify some of the products it sells; determine whether it is a private or a public corporation by giving the differences between a private and a public corporation, as well as find out whether the bank has been involved in any lawsuits.
The bank of America is not only the leading bank in America but in the whole world as well. The bank was established in 1904 by Peter Giannini together with his son. The bank was initially established as the bank of Italy and it was based in Francisco in California. The aim for establishing this bank was to help small scale farmers in Italy to get loans so as to expand their businesses (Nyoz, 2008). Today, the bank serves over fifty-nine million customers worldwide with approximately 6,100 banking offices and 19,000 ATMs. Currently, the headquarters of the bank is located in Charlotte, North Carolina in the United States. The bank is under the leadership of Brian Moynihan as the CEO and he is assisted by seventeen members of staff as the board of directors (Nyoz, 2008).
The bank is aimed at providing quality services so as to satisfactorily serve its customers. As a result, is status has been built on giving the best out of what it has. The bank provides both non-banking and banking services to all its consumers which include small and large scale businesses, individuals, governments and corporations around the world. Some of the services offered include; investments, risk and finance management, banking and assets management among others. The bank is specialized in savings to individuals and organizations, checking, offering mortgages, lending loans to students, offering retirement and insurance services as well as giving credit cards.
In addition to this, the bank is known for raising capital for those who want to start businesses, business banking, issuing credit to corporate, managing cash and trading. Besides, the bank also offers gift cards and special visa cards for business organizations. The organizations use these cards to reward employees whose performances are extraordinarily outstanding in their various sections of work. The bank of America also gives Government Travel Cards to its consumers with which they can make online payments wherever they are.
To ensure that the bank is effective and sufficient in providing these services to its consumer, the services have been grouped into various segments so as to avoid confusion. Among these segments are; the deposits segment, the global card, insurance and loan, global banking, global markets and investment and wealth management segment (Nyoz, 2008). The deposits segment deals with; the generation of saving accounts, issuing certificates on deposits, maintaining retirement accounts for individuals, as well as ensuring that saving accounts for money markets are maintained. The next segment is the card services. This segment was established specifically to handle issues pertaining to the issuing of cards to the united state consumers and businesses. It also handles debit and international card services in addition to lending services. The bank of America an insurance and home loan segment which enables its consumers to access real estate services and products such as loans for mortgage, credit lines for homes, equity loans and reverse mortgages. The segment also provides insurance services to individuals, properties, credit, life insurance, casualty, disability etc (Nyoz, 2008).
Another segment that has made the bank of America a proud bank in the world is the global banking sector. This division offers high quality lending services and products such as leasing, real estate and asset lending, giving commercial loans, financing businesses, offering both indirect and direct loans to consumers and pledge facilities. The segment is also known for giving reliable solutions to treasury and capital management. Such solutions include; investment options on short-term basis, equity and debt distribution, advisory services on merger-related issues, foreign exchange services and treasury supervision (Nyoz, 2008). There is also the global market sector which serves as the coordinating body for providing finances, offering advice to both individuals and companies, clearing securities, settlement services as well as safekeeping services. Lastly is the investment and wealth management segment which provides brokerage and investment services, management of estates, monetary planning, banking and credit expertise and benefit management services (Nyoz, 2008). These are therefore the many products and services that the consumers of the bank of America enjoy on daily basis.
To determine whether the bank of America is a public or a private company, let us first travel through the differences between a private and a public company. According to Yalden (2008), a private corporation can be described as a business organization that is owned by few shareholders or non governmental associations which do not sale their share on the stock market publicly. This definition can be summarized to mean that a private corporate is that which is not owned by the government. However, depending on the location, the definition can mean differently in different countries. For instance in the united states, private owned companies are those that do not at any instant trade in the stock exchange market. In addition, the ownership of shares and/ or interests in private companies is not traded publicly. In most cases, the companies are owned by the founders and their close relatives, or family members and a handful of the investors. Besides, some private companies may allow some of their workers to be part of the shareholders. Private companies may be required to give annual reports by the government; however these reports are limited to the liabilities, assets, and other activities that are confidential to the company (Yalden, 2008, p. 609).
A public corporate on the other hand can be described as any legal body or organization that is initiated and owned by the government so as to undertake all the profitable activities on behalf of the founder government (West Publishing Company, 1915). In most cases, public corporations are considered to be an element of this government. In addition, public companies are usual established so as to take part in money making affairs. They are mostly characterized by distinct legal form that is governed by public objectives. Besides, these bodies can be owned by the government fully of partially. When fully owned, it implies that they are a hundred percent belonging to the government and when partly owned then it means that some percentage of the shares is owned by private entities and individuals (West Publishing Company, 1915). In the United States, public corporations are established to ensure smooth flow of cash to specified segments of the countries economy so as to make these sectors more transparent and efficient. The main purpose for the establishment of such entities is to improve the availability and reduce the credit cost on borrowing to the citizens. Shares in public companies are open to the public and its shares can be traded in the stock exchange market (West Publishing Company, 1915).
Following these definitions and differences, we can comfortably determine whether the bank of America is a private or a public corporation. To start with, the bank was established by an individual who saw the problems of the young farmers and saw the urgency of helping them getting some loans so as to boost their businesses. Thus unlike a public corporation which is established by the government and for the government, the bank of America was established by an individual for the individuals. Looking closely at the issue of shares and membership, the bank was owned by the Giannini family and some few shareholders. In addition, its shares are not freely traded in the stock market thus making them not open to the public. Therefore from these few descriptions, it can comfortably be declared that the bank of America is a private corporation.
Despite of its leading service delivery and maximum satisfactory to its consumers, the bank of America, like any other bank, has been involved in major lawsuits in the recent years. Among these is the Ponzi scheme which involved the establishment of a new branch in long island. The case was filed in the federal court and it claimed that the bank of America helped Mr. Nicholas cosmos to run the Ponzi scheme worthy $380 (Wayne 2009). According to the class action, the bank helped in establishing, equipping and even hiring staffs for the scheme which was counterfeit. The new branch was established in Mr. Nicholas’s firm headquarters. As a result, the court argued that the bank of America was involved in the scheme knowing that the plan was false. The bank was at the front line in the scheme and without which Mr. Nicholas would not have had such a successful scheme. The bank of America was therefore charged $400 million by the court which was to cater for the damages. Meanwhile, Nicholas surrendered to the authorities what he had called “private bridge loans” that had guaranteed investors forty-eight to eighty percent returns in a year (Wayne, 2009). However the bank denied these accusations claiming that it was not aware of the suit. The suit went on to explain that some of the staffs of the bank of America worked for Mr. Nicholas at his office in West Hempstead, which was just some miles from the bank of America’s Agape branch. To add on this, the suit claimed that the bank of America also supplied on-site delegates at the Agape branch with computer systems and other banking equipment that facilitated the easy access to the accounts operated by the bank (Wayne, 2009). Primarily, the bank had established an active branch in the Agape office which was operated by its representatives. This was however contrary to the normal practices of banking as required by the law. As a result, the representatives had first hand information that was Nicholas was channeling some of the money to his private account and not engaged in any lawful business in whatever way.
Another major lawsuit is that which was filled on 5 April, 2010 by Hagens Berman Solob Shapiro LLP, a law firm that deals with the rights of consumers and class-action (Business wire, 2010). The firm claimed that the bank was deliberately withholding finances that were meant to liberate homeowners from home foreclosures. Hagens Berman Solob Shapiro LLP accused the bank for systematically slowing down the access to funds that were assigned for the Troubled Asset Relief Program (TARP) to homeowners in California by failing to honor their requests. The homeowners had requested that the bank should make some adjustments on the mortgage services offered by the bank or provide substitute solutions that would protect their homes from facing foreclosure (Business wire, 2010). The bank had received $25billion from the government so as to provide solutions for the many cases of foreclosures that struggling home owners were facing, but instead, the bank slowed down the adjustment processes so as to use the money for its own interests as Hagens Berman Solob Shapiro LLP reported. As a result, several homeowners among them the Bayramians were required to close their home when their efforts in reducing their monthly payments with the bank had failed severally. The bank consequently postponed the payments for a period of three months without informing the Bayramians that their home-loan adjustments would go through after twelve months. After some months, the bank returned to them claiming that it will make arrangements under the TARP but failed to make follow up making the Bayramians to face home foreclosure (Business wire, 2010).
Another lawsuit that was filed against the bank of America is that of Gender discrimination. Three women advisors claimed that the bank discriminated all women working for it by not giving them equal opportunities as the men workers. The case was filed on 30th March, 2010 in the federal court by Adam Klein, the plaintiffs’ lawyer (Feminist wire, 2010). The complaints claimed that women financial consultants in bank were treated like substandard citizens. They are discriminated in terms of compensation, employment opportunities, and professional support among other terms of employment. Female workers also face discrimination in terms of account distribution, up front finance, partnership chances and disbursement rates among other compensation benefits (Feminist wire, 2010).
In conclusion, the bank of America is the leading bank in the entire world and it was established in 1904 by Peter Giannini with the assistance of his son. The bank was initially set up in Francisco, California and it was meant to serve small scale farmers from Italy. With time the bank expanded through mergers to a worldwide service provider with its headquarters in Charlotte, North Carolina in the United States of America. The bank is currently governed by Brian Moynihan as the CEO with seventeen members of the board of directors under him. With a strong leadership team since the beginning, the bank has managed to serve over fifty-nine million customers all over the world with approximately six thousand banking offices and nineteen-thousand Automated Teller Machines (ATMs). The bank of America’s main goal is to ensure quality services to its consumers. Following this, the bank has ensured that it lives up to its promises by ensuring that it gives the best to its customers. The bank therefore offers a wide range of products and services to its world wide consumers. Some of the products and services offered by the bank include; insurance services, checking, lending to students, providing mortgages, managing cash and trade, giving financial and investment advices to both individuals and corporations, etc. the bank is also involved in capital up lift for new and young businesses, credit issuing, business banking, as well as giving gift and visa cards for business organizations.
To ensure smooth running of all the activities that the bank is committed in, the management has been divided into various segments. These include; the deposit segment which deals with maintaining savings and retirement accounts and issuing certificates on deposits. Card services sector is also another segment that is specialized in issuing cards to consumers and businesses based in the United States. There is also the home loan section which offers mortgages, equity loans and credit lines to homeowners. The other segment is the global banking sector which offers services such as leasing, financing businesses, real estate and asset lending, commercial and direct loans etc. in addition, there is the global market sector which handle matters to do with advices to both individuals and companies, security clearing, safekeeping and settlement among others. Lastly is the investment and wealth management segment which provides brokerage and investment services, management of estates, monetary planning, banking and credit expertise and benefit management services.
The bank of America can be classified as a private corporation because it has all the characteristics and qualifications of a private company. This is because it was not founded by the government like many public corporations and its shares are not traded in the exchange market. In as much as the bank has been offering quality services to its consumers, it has also been involved in some of the major scandals that have resulted to lawsuits. Among them is the Ponzi scheme which involved Mr. Nicholas Cosmo and the bank where by the bank funded a fake scheme for Nicholas by providing him with finances and even equipping and staffing a new branch in Nicholas’s firm headquarters. Nicholas had claimed that the scheme would enable his costumers to earn up to eighty percent of their savings per year. Since some of the workers in the new branch were representatives of the bank of America, they realized that Nicholas Cosmo had no legal business with the bank instead he channeled the money to his own account. Another lawsuit that was filed against the bank of America is that which involved Berman Solob Shapiro LLP class-action firm and homeowners. The firm claimed that the bank had delayed to make adjustments on mortgages and loans that were meant to rescue home owners from home foreclosures. Further, the Berman Solob Shapiro LLP informed the court that the bank of America had received twenty-five billion dollars from the government so as to cater for homeowners in the Troubled Asset Relief Program (TARP). Instead, the bank delayed some of the adjustments and used the money for its own interests leading to the closure of some homes among them the Bayramians’. The last lawsuit is that in which the bank was accused for gender discrimination against its female workers. The case was filed by three female monetary advisors who claimed that the bank did not give equal opportunities and benefits to the female workers as it did to the male workers.
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