Filing Details Schwab Sales of B of A Stock : Sold 358,957 Shares Just Before Loss Announced

Charles R. Schwab, chairman of BankAmerica’s discount brokerage subsidiary and a member of the executive committee of the bank company’s board of directors, sold 358,957 shares of BankAmerica common stock last month, just weeks before Wednesday’s announcement that the bank lost $338 million in the second quarter.

Documents filed with the Securities and Exchange Commission show that Schwab began selling sizable blocks of B of A stock on June 13, nine days after bank officials unexpectedly announced that B of A would make little or no profit in the second quarter.

In the ensuing six weeks, the bank’s loan-loss position deteriorated severely, resulting in the big second-period loss. Since June 13, B of A stock has lost about $2 a share in value.

Schwab was unavailable for comment Friday. But Hugo Quackenbush, a Charles Schwab & Co. senior vice president and a close associate of its chairman, said that Schwab’s stock sales “very definitely” were not based on insider knowledge that B of A would report a huge loss.

Was Biggest Individual Holder

“He was informed on the afternoon prior to the earnings announcement and was shocked,” Quackenbush said. “He had absolutely none (insider information) at all.”

Before the June sales, Schwab was the largest individual owner of BankAmerica stock. As of July 1, he held 195,750 shares, according to the SEC filing.

An SEC spokeswoman declined to comment on whether the agency was investigating the matter.

Quackenbush said Schwab sold the stock to repay personal debts and put the money into more profitable investments. Schwab’s wife, who owned 323,000 shares, also sold some of her holdings, he said.

The Schwabs used the proceeds to buy property in Hawaii and invest in mutual funds, Quackenbush said.

Schwab and his wife acquired 1 million shares of B of A stock when his brokerage firm was acquired by BankAmerica in January, 1983.

The recent stock sales were handled by the Schwab firm, Quackenbush said, at the company’s “fabulously low” commission rate.