BulletProofBlog the blog on crisis communications

News earlier this month – that New York State Attorney General and gubernatorial aspirant Andrew Cuomo filed a fraud suit against former Bank of America head Ken Lewis and the bank’s former Chief Financial Officer – did not surprise most observers. Even if the lawsuit does not support Cuomo’s run for higher office (which it does), he’d already spent months investigating BofA executives for allegedly depriving shareholders of material information about Merrill Lynch’s financial condition and the bonuses the bank was going to pay prior to the completion of the 2008 acquisition.

BofA responded to Cuomo with a spirited defense. Particularly powerful was the bank’s sharp reminder that “the SEC had access to the same evidence as the NYAG and concluded that there was no basis to enter either a charge of fraud or to charge individuals.” And, with former U.S. Attorney and legal superstar Mary Jo White defending Lewis, the fight has only just begun.

From a legal perspective, that’s all well and good. Alas, however, there are other perspectives, equally if not more important. As I commented in Forbes, the Merrill deal is “still the burr under the saddle of a lot of folks.” As long as that matter remains front-center, it will dominate perceptions among all of the bank’s most important constituencies and remain a drag on BofA’s business potential. Indeed, there’s already talk that BofA may be forcing named defendant CFO, Joseph Price out of the bank altogether because “the businesses need attention that Price may not be able to give as he deals with the lawsuit.”

As the ordeal continues – chronicled on front pages daily – the bank must confront formidable hurdles. With unemployment still high and consumer confidence up only slightly, all financial institutions must work hard to regain the trust they’ve lost. In BofA’s case, the more quickly they reestablish themselves as a means for depositors and customers to secure economic stability, the more quickly a much-needed alternative storyline can gain traction.

Michael W. Robinson is a Senior Vice President and Chair of the Corporate Practice at Levick Strategic Communications, the nation's top crisis communications firm. He is also a contributing author to Bulletproof Blog. Connect with Levick on Twitter: @Levick.