Contact: John Harrington – 707.252.6166
FOR IMMEDIATE RELEASE
February 24, 2006
Napa, California
Business As Usual: Compromising Customer Data
SEC agrees with Bank of America that the loss of data for nearly 2 million customers is "ordinary business."
The Securities and Exchange Commission (SEC) is allowing the Bank of America to keep a shareholder resolution off the annual proxy ballot; the resolution requested more information on how the company intends to safeguard the confidential personal financial information of its customers.
"Bank of America and the SEC both believe that losing customer confidential information is an 'ordinary business' occurrence, and shareholders do not need a report on how the company plans on keeping customer data from being lost or stolen," said John Harrington, President/CEO of Harrington Investments, Inc. (HII), a Napa, California-based socially responsible investment advisory firm which filed the resolution.
HII has been asking Bank of America to address this issue since 2004, when it first filed a shareholder resolution requesting a report on "the company's policies and procedures for ensuring that all personal and private information pertaining to all Bank of America customers will remain confidential in all business operations 'outsourced' to India or any other offshore location." At the 2004 annual meeting the proposal received 9.01% of the vote; however, when it was re-filed in 2005, the bank convinced the SEC to allow it to be excluded from the proxy statement, claiming it was "ordinary business."
"The SEC is increasingly siding with corporate management to keep information from being disclosed to shareholders," Harrington continued. "What makes the SEC decision even more disturbing is that the resolution was advisory only, and if it had received a majority of votes, the board of directors would not be required to implement it. Corporate management is unaccountable to owners, and our federal regulatory agency provides no protection for shareholders and the public."
Since Bank of America customers have continued to experience security breaches, HII filed another proposal in 2006, asking for a report on the company's policies and procedures for protecting its customers in all of its business operations. Nearly two million Bank of America customers have had their personal information compromised during the last 14 months.
Harrington concluded by saying: "Bank of America shareholders are at risk, legally and financially, if corporate management continues to ignore its fiduciary duty to safeguard customer confidential information, the loss of which can result in identity theft, an internationally recognized white collar crime that increases daily."
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