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BankAmerica president quits
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October 20, 1998: 4:06 p.m. ET
David Coulter, who engineered risky D.E. Shaw buyout, resigns suddenly
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NEW YORK (CNNfn) - BankAmerica President David Coulter, the would-be successor to top executive Hugh McColl and architect of a risky hedge fund partnership, resigned abruptly Tuesday from his high-profile post.
The sudden departure leaves a gaping hole in BankAmerica management's top tier but apparently gave Wall Street a reason to look twice at BankAmerica shares.
The company's shares (BAC) were up 2-7/8 at 55-3/4, more than 5 percent, on the New York Stock Exchange following the news.
Analysts said Coulter's resignation comes as no surprise, adding it serves as proof that the nation's second-largest financial institution takes seriously the concept of accountability.
"Under the new Bank of America, Hugh McColl clearly is not going to tolerate much in the way of serious error, and this was a misjudgment somewhere along the line and obviously Mr. Coulter had to pay the price," said Jim McDermott, an analyst with Keefe, Bruwette and Woods.
In his resignation statement Coulter said, "It is with regret that I announce my resignation effective Oct. 30. The decision was extremely difficult for me, both personally and professionally. BankAmerica is a strong, stable and sound financial institution."
Last week, BankAmerica shares hit the skids after it disclosed more than $370 million in trading losses tied to D.E. Shaw & Co., a New York securities fund. The bank announced later it would buy $20 billion in fixed-income securities from Shaw, in efforts to protect its $1 billion investment, adding it will liquidate the securities over time.
(Click here for a chart of BankAmerica's stock activity)
Under their alliance, BankAmerica reportedly lent Shaw about $1 billion for its investment portfolio in return for a 50-percent stake in the fund's profits and losses.
The portfolio includes about $10 billion in U.S. securities, in addition to Japanese bonds.
The unusual hedge fund buyout came as BankAmerica reported a 78 percent slump in third-quarter net income, which it attributed to global economic volatility. 
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Bank of America
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