A embattled Bank of America executive has been stripped of responsibility for a key money-making division — months after a high-profile outcry over the overwork death of a junior banker within the division.
Gary Howe, the fiery boss of Wall Street giant Financial Institutions Group (FIG), lost oversight of the fintech investment banking team in August, people familiar with the matter told the Post. Bloomberg also reported on the fintech move last week.
Mr. Howe's FIG unit employed Leo Lukenas III, 35, a former Green Beret. He died in May after allegedly logging 100-hour work weeks to help close a multibillion-dollar merger.
Mr. Lukenas' death has put a harsh spotlight on Wall Street's pressure-cooker culture, and brought harsh scrutiny to BofA's guardrails for young bankers and whether management turned a blind eye to the long hours employees worked. It has come under scrutiny.
The bank said Mr. Howe will not face any disciplinary action immediately following Mr. Lukenas' death.
But last Monday, it was reported that about 50 of New York FIG's 150 employees in the high-paying fintech division would be moving to the Technology, Media and Telecommunications (TMT) group. According to Bloomberg.
Star Banker Matthew Sharnoff — Ranked as the second highest According to MergerLinks, FIG members last year brought the total amount of transactions they led to all banks and were among those transferred to TMT, the people said.
Kevin Brunner, the bank's global M&A chairman and global head of TMT, told the outlet that the move is part of an industry-wide shift to software in financial services.
Some interpreted the reduction in Howe's team by about a third as a potential blow to his future at the bank.
“This was a power move against Gary,” a person familiar with the bank told the Post, adding that it would make it more difficult for Mr. Howe to get his bonus.
Another person close to the bank speculated that CEO Brian Moynihan was quietly encouraging Mr. Howe to make an appearance.
“Bank of America doesn't fire people,” said a former BofA executive. “There will probably be a change in title and a reduction in salary. I don't think Gary will arrive within six months.”
Labor lawyers speculate that the bank may be trying to distance itself from Mr. Howe in the face of a possible lawsuit.
“We are confident that there was an internal investigation,” Philippatos partner Tabil Rahman, who has handled cases against many large banks but is not involved in the Loukenas case, told the Post. .
“I see he's an Autumn guy.”
Mr Howe, 54, has not commented since Mr Lukenas suffered a fatal blood clot in his heart on May 4.
There is no evidence that long working hours contributed to Lukenas' death.
Howe did not respond to multiple requests for comment. Shortly after Lukenas died, he disconnected his LinkedIn account.
Matthew Corder, Head of Global Corporate and Investment Banking, said: “We have the full support of Gary as the leader of our Global Financial Institutions Investment Banking Group, and we continue to invest in this major franchise.” said.
Howe last week announced the addition of George Matsuzaka as co-head of global insurance. He was global head of insurance at UBS.
In early August, BofA introduced a new monitoring system that required junior bankers to report hours worked daily instead of weekly, a junior banker who worked with Mr. Lukenas told the Post.
The decision came at about the same time as an explosive response from the Wall Street Journal. Revealing how BofA works Managers instructed their direct reports to lie about long hours, even when they exceeded the 80-hour limit. The restrictions were introduced more than a decade ago after the death of a 21-year-old intern who worked three days straight.
“They called me in the middle of the week and said let's try not to get to 80 hours,” a junior banker who worked with Lukenas told the Post.
The banker said he previously worked about 100 hours a week after lifting the restrictions, which are overseen by executive-level “staff” reporting to managers like Howe.
“If you are working after 2 a.m., you must immediately report the transaction to the managing director,” the person said.
“They're trying to change the culture. Let's see how long that lasts.”
Nevertheless, a former senior BofA executive said Mr. Howe was also responsible for verifying business hours.
“Gary is paid to ensure that junior bankers are not overworked,” the former executive said. “If someone was working 100 hours week in, week out, that should raise red flags.”
Mr. Howe received his MBA from the prestigious Wharton School in 1994. After a brief stint at JPMorgan, he spent nine years at Credit Suisse First Boston before joining Swiss rival UBS in 2005.
During his six-year tenure at UBS's FIG division, Mr. Howe told colleagues at UBS that he was a relative of the family behind the De Beers diamond empire, according to people who worked with him. He reportedly had a reputation for being harsh on young bankers. He's at UBS.
“People complained about his attitude, his respect for others and the hours he put people to work,” a UBS official said. “People were unhappy working 100 hours a week.”
Mr. Howe's obsession with pitchbooks has raised eyebrows at UBS, where junior bankers spend more time than other bankers assembling their pitchbooks, and UBS officials say they often ask why. He said he had doubts.
“He seemed to think he could win business by putting together a big book,” a UBS official said of Howe. “We were wasting our time writing pitch books that no one would see and that wouldn't bring us any business. These books were full of analysis of deals that we wouldn't get. ”
UBS passed on Mr. Howe in 2011 when it was selecting a head of FIG, according to people familiar with the matter. He then landed at Lazard's FIG division, but Howe gained another reputation for not bringing in good enough deals, a source with direct knowledge of the situation said. According to the source, he was forced to leave in 2019.
A few months later, Mr. Howe joined BofA as co-head of Americas FIG Banking. The South African was promoted in 2021 to lead the global FIG division alongside Will Addas and Giorgio Cocini.
Sources close to the bank said Mr. Addas was more focused on the concerns of ordinary people, but left last year to devote more time to his family.
At that point, according to a junior banker who worked with him, the FIG division under Howe became “a much rougher division without him.”
Indeed, Mr. Howe's first task was to enforce the company's post-pandemic return-to-office mandate, while Mr. Adas has been more lax on this, the people said.
“I remember when Will went home on a Friday, we came in the following Monday and Howe reset expectations that everyone needed to be in the office by 9:30 a.m. and be in the office four days a week. ” said a young banker.
The person described Mr. Howe as a tough boss, but said he, Mr. Lukenas and others worked long hours to try to get ahead.
Rival JPMorgan also introduced an 80-hour weekly cap on junior bankers last month. This is the first restriction enacted by the nation's largest financial institution.
In 2013, BofA instituted safety measures for its employees after Moritz Erhard, a 21-year-old investment banking intern, died from an epileptic seizure after working nearly 72 hours non-stop.
Under the new policy, junior bankers will be prohibited from working more than 80 hours a week unless they have permission from regulators and there are important reasons to make an exception, the people said.
Junior bankers will also be prohibited from working on Saturdays or holidays without approval from the chief operating officer, according to five people with direct knowledge of the policy.
“Rules were put in place to prevent what happened to (Moritz) from happening,” said a former BofA executive.
A former BofA human resources executive added: We were geeky about it. ”
Officials at the New York FIG division typically have vice presidents and directors who earn about $350,000 a year walking the floor and talking to junior bankers and colleagues, and more than half of the 150 employees are junior bankers. It is said that he was a member of .
Lukenas, who lived in Brooklyn with his wife and two young children, had been in a rough patch since being hired in March 2023, according to a recruiter the former Green Beret contacted two months before his death. It seemed like he was tired of the long hours.
He wasn't the only stressed-out young banker at BofA looking for an exit plan. Several people in Mr. Howe's department have been looking for jobs at rival banks over the past year, a senior banker at the bank with direct knowledge of their calls told the Post.
Douglas Walters, managing partner at Gray Fox Recruitment, said Lukenas complained that he worked more than 100 hours a week and had too little time to spend with his family, according to Reuters.
“He made comments like, 'I'll take a 10% (salary) cut in exchange for sleep time,'” Walters told the outlet in May.
At the time of his death, Mr. Lukenas was working on helping BofA client UMB Financial acquire Heartland Financial for $2 billion. The deal was signed on April 29, three days before Lukenas suffered a fatal blood clot.
“The day before he passed away, there was a group call about a deal with UMB, and he was excited to get it done,” said a junior banker at BofA.
Although there is a lack of evidence that long hours contributed to Lukenas' death, some family members believe it may have been a factor.
“I don't think anyone would work those hours and be under stress,” one relative told the newspaper on condition of anonymity.
Mr. Howe was killed along with about 50 other Bank of America employees at Fort Liberty (formerly known as Fort Bragg) in North Carolina, according to people who also attended the funeral. I attended the funeral of Mr. Lucenas.
At the end of the service, U.S. Army officials played a recording of Earth, Wind & Fire's “September,” honoring Lukenas' request as a Green Beret in case he was killed during military operations, officials said. added the person.
