The $19 Billion Woman

One day early last month, a 42-year-old mother of four raised $19.29 billion, about the size of Jordan’s gross domestic product, by selling just less than 1.3 billion new shares of Bank of America. It was the most money ever raised by an already-public U.S. company, and it allowed her bank to repay its $45 billion TARP loan, shaking loose all the baggage that went along with it.

Lisa Carnoy’s record-breaking deal could well be looked back on as one of the profoundly great ruses in the history of capitalism if, say, a cataclysmic implosion of commercial real estate loans plunges the country into new and deeper misery. In that case, why investors scooped up a billion shares in a reeling bank with no permanent chief executive and a serious collection of contaminated assets will be something to consider.

Most likely, though, history will be kinder, and the deal will be seen as a turning point in the fate of one of the most important financial institutions still standing. Either way, those billions will define the career of Ms. Carnoy, quietly one of the most powerful women on Wall Street. If she included her team’s personal fitness programs and favored yoga positions in a pitch to Lululemon Athletica, as she once did, you can imagine the zigzagging artfulness that went into her own bank’s offering.


OF THE HUNDREDS OF BANKS that received troubled asset relief program funding, none were given more than Bank of America: It alone got well more than GMAC, Morgan Stanley and U.S. Bancorp combined. And as one of the last to pay back the money, it had to deal not only with the continuing shame of being propped up by the federal government, but with the curbs on corporate spending, executive pay and dividend increases.

In September, The Wall Street Journal reported that the bank had been trying to “wrestle themselves free of the government’s grip.” But the Treasury wouldn’t take back its $45 billion until the bank—which had acquired the dodgy mortgage colossus Countrywide three months before agreeing to buy Merrill Lynch, Ms. Carnoy’s old firm—could show it would stand on its own feet.

That wasn’t going to be easy. To naked eyes, BofA was wobbly. Finding a replacement for Chief Executive Ken Lewis, who announced in the fall that he’d step down at year’s end, was not going well. Candidates bristled at the government compensation regulation that came with TARP. And while Mr. Lewis fought off shareholder lawsuits accusing him of concealing Merrill’s sorry state before the merger, there were investigations from Congress, the S.E.C. and the New York attorney general, too.

Throughout the autumn, Ms. Carnoy prepared the kind of gigantic offering that could raise money to pay back Washington. Four or five times, teams were brought in for false starts: “Fifteen people were on deck,” she said about one near miss, “to have multiple all-nighters and get this done over a weekend.” Their packed luggage returned home.

On Wednesday, Dec. 2, Ms. Carnoy gathered with colleagues in a 19th-floor conference room to hear from the Treasury and from the Federal Reserve, whose board had to approve the stock offering. “You want to make sure if your mother says yes, that your dad also agrees,” said Dan Cummings, head of equity capital markets for the Americas.

“It was methodical,” said an official at the Treasury, which used the department’s stress tests to determine if banks could afford to stand on their own. “We laid out what we wanted to do, how we wanted to do it, and this was a nice conclusion.”


MS. CARNOY’S CORNER OFFICE in the Bank of America Tower on 42nd Street is decorated with a football, four tennis balls, a basketball, two Foster’s cans, a Mets lunch box, a Mets home plate and a Louisville Slugger baseball bat. She is an eccentric conversationalist, sporadically bursting into large laughter, then settling into long and odd silences.

Last year on Wall Street, equity capital market underwriting was the biggest driver of fees, not M&A advising. Revenues rose 51 percent to $42.1 billion. “I think what we do is provide judgment and guts under duress,” she said Monday, “to have the confidence and conviction that we could do this whole deal, that we could do it in a day, that it would be successful for our investors.”

The $19 Billion Woman