Forced Retreat

Lawrence Mario Giannini, president of the Bank of America, is a frail but stubborn man. When the Federal Reserve Board got a court order last month to block his purchase of 22 banks from Transamerica Corp. (TiME, July 10), Giannini ignored the order. The FRB--and Giannini, too--were well aware that the purchase would cut Transamerica's holdings in California to only four banks, and thus take much of the steam out of the FRB's antitrust suit against Transamerica.

Giannini argued that the FRB had known of the deal for months, and should not have waited until the last minute to object. The federal court thought differently: it convicted Giannini and Transamerica President Sam H. Husbands of contempt, ordered them to jail within 30 days and their companies each to pay fines of $2,500 a day unless the sale was called off.

Last week, after a vain appeal to the U.S. Supreme Court to stay the conviction until the full high court could review the case, Giannini and Husbands agreed to call off their deal.

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