Bank of America decision to waive attorney-client privilege and disclose the legal advice it received regarding its controversial acquisition of Merrill Lynch may seem like a small step, considering the complex continuing litigation in which one of the country s biggest banks has become embroiled. Yet to me, it s a tipping point that causes me to view BofA both as an investor and consumer in a whole new light.

Full disclosure is not only the right thing to do, but also the best thing for shareholders. It suggests that Bank of America, admittedly with the pressure of $45 billion in government assistance and continuing intense scrutiny, may be one of the rare companies able to put shareholders interests ahead of management s.

Consider the seismic upheavals that Bank of America has undergone this year. Chief Executive Kenneth Lewis, architect of the bank s acquisitions of Countrywide Financial and Merrill, was stripped by shareholders of his chairmanship in April. The board, which had been criticized for its cronyism and blind allegiance to Lewis, has replaced many of its members, adding six new directors since June. Lewis himself announced his retirement in September. The bank brought in new outside counsel, from Paul Weiss Rifkind Wharton & Garrison, to assist its legal strategies. In short, this is a new Bank of America. And the decision to stop fighting the disclosures shows the change is not merely cosmetic.

For more on this, read my Oct. 13 column, "Free Advice for Bank of America: Move On

The sweeping changes at Bank of America also augur well for the choice of a new chief executive to replace Lewis, probably the most important decision the newly invigorated board will make. It should now be easier to attract top candidates, especially from outside the bank. Those candidates should be reassured that they wouldn t be ensnared in the quicksand of ongoing litigation and would be dealing with a board independent of former management. Under these conditions, the top job at Bank of America should be perceived as one of the most desirable in banking, if not corporate America.

Bank of America is not just the country s largest bank by assets, with increasingly global reach. Thanks to Lewis s deal making, it is also one of the biggest mortgage lenders, owns the largest brokerage force and has the potential to be one of the leading investment banks. That scale gives BofA the potential to be tremendously profitable, assuming someone can manage this behemoth and execute effectively. If I were a top banker, I d be salivating for this job.

I m not, of course. But as an investor I sense opportunity. I was a Bank of America shareholder at the time of the Merrill Lynch merger, and I would have voted for it even if Merrill s losses and bonuses had been disclosed (as they should have been, in my view). As I ve reported, I subsequently sold my position in BofA and other financial stocks, largely because they had gained so much. But in Bank of America s case, I also had questions about top management. My investing strategy always starts with an evaluation of management skill and character.

Now those concerns have been alleviated, even before I know who the next chief executive will be. I m not yet recommending B of A shares. The stock has been trading around $17 a share since mid-August, which is a more than five-fold increase since the lows of March. I believe the market as a whole is due for a pullback, as I ve indicated in previous columns. And bank stocks in particular may still face some big writedowns in commercial real estate. Still, for investors who don t share my broader concerns about market valuations, I d recommend Bank of America now.

When it is time to rebuild my positions in bank stocks, Bank of America will be high on my shopping list, along with other banks that have capitalized on the financial crisis to make sound strategic acquisitions at fire-sale prices. These include JPMorgan Chase (JPM) (which bought Bear Stearns and Washington Mutual); Wells Fargo (WFC) (Wachovia) and PNC Financial Services (PNC) (National City). I predict that the Merrill bonus and disclosure issues will someday be a footnote to history. What will be remembered are those who seized the historic opportunities offered by the financial crisis and had the courage to act.