Anonymous' Perplexing Leak of Bank of America Documents

Anonymous' Perplexing Leak of Bank of America Documents - WSJ

Bank of America Corp. (BAC) has been bracing for a release of documents by WikiLeaks, the group claiming to have the computer hard drive of a Bank of America executive. But on Monday the Charlotte, N.C. lender found itself the target of yet another whistleblower with its own set of internal documents.

That might be bad news for the bank if the allegations weren't so perplexing.

The group, known as "Anonymous," posted a series of e-mails between employees of Balboa Insurance, a division Bank of America recently sold to Australia's QBE Insurance Group Ltd. (QBE.AU). Balboa underwrites so-called "force place insurance" when a mortgage lender or investor determines that an additional policy is necessary.

A member of Anonymous claimed via Twitter that the emails represented "fraud" because the bank hid foreclosure errors from "federal auditors," among other charges.

But it isn't clear from the emails exactly what the alleged wrongdoing was. Even so, the press widely picked up the story, suggesting the hypersensitivity to leaks of internal Bank of America documents, which WikiLeaks founder Julian Assange promised would come early this year and be damning.

This leak wasn't it. The emails, dated from November 2010, concern an error about whether certain homes that required flood insurance were located in a flood zone, according to one former employee.

The person who shared the e-mail exchange with Anonymous is Brian Penny, a former employee of Balboa. About 80 documents pertaining to flood insurance were approved for removal from an internal system due to the error, according to Penny and a former employee of Balboa Insurance who asked to remain unnamed. Penny said the bank removed files so auditors wouldn't be tipped to the mistake.

"Why are we removing all record of this error?" one former employee asked in one of e-mails released Monday. "This just doesn't seem right."

The bank didn't deny the existence of the e-mails but denied any wrongdoing. The former Balboa employee is trying to generate interest in "documents that he stole from the company," a Bank of America spokesman said. "We are confident that his extravagant assertions are untrue." QBE Insurance declined to comment.

Penny said he didn't steal the documents. He did post on a website a photo of a Balboa employee at her desk, noting that "a bank this large would take better security measures with your private and personal information." But it's unclear from the photo where all that personal information is laying about; the employee's computer screen is illegible.

Banking lawyer Chip MacDonald of Jones Day in Atlanta said he expects no impact on the bank. "It sounds like a tempest in a teapot from a guy looking for attention," he said.

The bank said the Balboa documents that contained the mistakes never were sent, and the errors were removed to prevent internal confusion about the situation.

But one former employee said the erroneous letters did get sent, and the mistakes were corrected in a second set of letters.

Anonymous referred to its leak as BlackMonday and asked for the release of Bradley Manning, the Army intelligence analyst who is suspected of leaking U.S. classified documents to WikiLeaks. He has been detained in a Virginia military brig.

In return for Manning's release, Anonymous said it will remove the names of Bank of America employees on the e-mail.

By Cynthia Koons in Sydney and Dan Fitzpatrick in New York

Contact us in Sydney on +61-2-8272-4681; or djnews.sydney@dowjones.com

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