How Bank of America's $4 Billion Mistake Cost Investors Their Dividend Increase

After initially passing the Federal Reserve's recent round of stress tests and being granted the ability to raise its dividend and initiate a share repurchasing program, Bank of America (NYSE: BAC  ) has now notified the Fed that it mistakenly reported $4 billion in additional capital. The bank will now be forced to suspend its planned increases to shareholder distributions.

In this segment from Tuesday's Investor Beat, host Alison Southwick and Motley Fool analysts Mike Olsen and Brendan Mathews look at how an error of this size could have happened, and just how badly this could damage the credibility of both the bank and the Fed's stress tests. Mike also mentions that this demonstrates just how many unknowns there truly are for investors in banks of this size.

Big banking's little $20.8 trillion secret
There's a brand-new company that's revolutionizing banking, and is poised to kill the hated traditional brick-and-mortar banks. That's bad for them, but great for investors. And amazingly, despite its rapid growth, this company is still flying under Wall Street's radar. To learn about about this company, click here to access our new special free report.


Read/Post Comments (1) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 30, 2014, at 7:47 PM, Hansen wrote:

    Bank of America has reported revenues of $22.8 billion for the quarter, topping analysts’ expectations by $420 million, and adjusted earnings of 35 cents a share, above analysts’ estimates of 27 cents. http://goo.gl/OGFpNN

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2935882, ~/Articles/ArticleHandler.aspx, 12/18/2014 11:35:01 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement