Bank of America Corp. shareholders on Wednesday soundly rejected a proposal to create a committee of independent directors to review the bank's mutual fund trading policies.
The proposal by the AFL-CIO Reserve Fund, which owns 1,000 Bank of America shares, also called for the committee to report to shareholders on how well Bank of America complies with securities laws. About 8.32 percent of the votes cast favored the proposal, Bank of America said.
The fund made the proposal after the bank and FleetBoston Financial Corp. agreed in March to pay $515 million and give up $160 million of fees to settle charges that they helped favored clients trade mutual funds improperly at the expense of ordinary shareholders. The settlement involved no admission or denial of wrongdoing.
Charlotte, North Carolina-based Bank of America bought Fleet on April 1, becoming the No. 2 U.S. bank. It has said it is taking several actions that comprise what Chief Executive Kenneth Lewis has called a "comprehensive road map" to improve fund policies.
"The board's opinion (is) that the company has gone well beyond" the AFL-CIO proposal, said Charles "Chad" Gifford, Bank of America's chairman, at the bank's annual meeting in Charlotte. "It is absolutely our expectation that this comprehensive road map that Ken talks about will take place," he said.
As part of the settlement, Bank of America committed to ensure "best-in-class" governance policies for the board of trustees of its Nations Funds.
Eight fund directors are to depart within one year for their role in letting the Canary Capital Partners LLC hedge fund trade funds quickly to exploit pricing inefficiencies.
"These directors clearly failed to protect the interest of investors," New York Attorney General Eliot Spitzer, who engineered the settlement, said at the time.
Separately, Bank of America shareholders on Wednesday elected 19 bank directors and ratified PricewaterhouseCoopers LLP as the bank's auditor for 2004. Shareholder proposals on the annual meeting date, director elections, charitable contributions and customer privacy were also rejected.
The annual meeting, which lasted about 70 minutes, was monitored by Webcast.