Mayo Concedes He Dialed Wrong Number
Veteran banking analyst Mike Mayo is now privately conceding that a wrong number was dialed last week that made it impossible for him to participate in a Bank of America (NYSE:BAC) conference call for analysts despite lambasting the big bank for purposely shutting him out of the call, the FOX Business Network has learned.
Mayo’s mea culpa came during a series of conversations with BofA officials following his October 18 note on the bank’s third-quarter earnings. Despite showing modest profits for the quarter, Mayo said the bank's "action" of refusing to take his questions during the conference call lends credence to his overall concerns about Bank of America's management and its handling of its myriad problems, including massive liabilities tied to its Countrywide Financial mortgage unit.
“This action by the company appears to us to be more insular than they have acted in the past, and diminishes our trust and confidence in the results they presented -- even if the shares are trading up 7% post call," wrote Mayo, an analyst for Credit Agricole Securities, after the call.
But after hearing from bank officials, Mayo did some checking and discovered he was in error, a person close to BofA told FOX Business. Mayo, or one of his representatives, dialed a call-in number issued by the bank on October 11, just a week before the conference call.
But that number was changed several hours later, emails obtained by FOX Business show. Mayo or one of his representatives called the original telephone number, according to people with direct knowledge of the matter.
Mayo appears to be the only major Wall Street analyst to confuse the two telephone numbers, people at BofA tell FOX Business, and certainly the only one to complain publicly about not being able to ask questions. (Published reports have said another unnamed analyst was blocked from asking a question, as well.)
Mary Beth Kissane, a spokeswoman for Mayo, would not deny that Mayo or one of his representatives dialed the wrong telephone number. A spokesman for BofA will not deny the account, either.
Mayo’s note last Tuesday describing how he was shut out of the conference call even after alerting an operator he had a question for company officials on the call -- chief executive Brian Moynihan and chief financial officer Bruce Thompson -- concerned many institutional investors. Several called BofA complaining that the bank was improperly closing off access to one of Wall Street's most prominent banking analysts because of his negative views on the banks, FOX Business has learned.
Adding credence to Mayo’s original account was his contention that “while we entered a question to ask on the conference call (confirmed by the operator),” Bank of America ended it "without taking the call and closed the call by saying, ‘We have no further questions at this time.’”
Securities regulators have been cracking down on so-called conflicts of interest involving Wall Street research. In 2003, many of the big banks settled with regulators charges that they issued fraudulently positive stock ratings on companies in exchange for lucrative investment banking business from those companies.
Other securities regulations make it difficult for banks to ignore or block analysts who are critical of the companies they cover from obtaining information. Last year, Mayo got into a major scuffle with Citigroup (NYSE:C) after the bank refused to make its chief executive, Vikram Pandit, available for an interview with Mayo, who also published negative research on Citi, despite meeting with other analysts.
After the FOX Business Network broke the story, the bank reversed course and Mayo got his sitdown with Pandit.
But this time, it may be Mayo who has to reverse course. People close to the bank say Mayo conceded the error to BofA officials over the past week, while the bank itself said it regretted the confusion stemming from its change of the analyst call-in telephone number.
The bank has offered Mayo a chance to submit questions he would have asked on the call, which he has yet to do, the FOX Business Network has learned.
“After we saw what Citi went through last year, why would we be so dumb as to block Mayo,” said a senior official at the bank. “We got bigger things to worry about.”