New York Attorney General Andrew Cuomo may demand that employees of Merrill
Lynch & Co. return $4 billion in bonuses paid just before the
brokerage was acquired by Bank of America Corp.,
Bloomberg reported
Thursday.
Citing a person familiar with the matter, the news and data service
said Cuomo also wants to know what Bank of America chief executive
Kenneth Lewis knew about the accelerated payout and about Merrill's
surprise $15 billion loss in the fourth quarter.
The report said the attorney general's office is examining whether the
companies' shareholders had all the necessary information about
Merrill's finances when they voted on the deal and whether federal
bailout loans to Bank of America were used properly, the Bloomberg
report said.
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Cuomo is looking at whether the handling of data on the losses and on Merrill's bonuses -- which were paid in December instead of their usual January date -- may have violated New York securities laws and warrant imposition of fines, Bloomberg's source said.
"No longer will this country stand for wasteful spending of tax dollars on bonuses for executives whose companies have taken huge losses and required taxpayer bailouts," Cuomo said Thursday in a statement.
The investigation comes as President Barack Obama
called it "shameful" that Wall Street firms paid billions of dollars of bonuses to executives as they took money from the government.
Charlotte, N.C.-based Bank of America agreed to buy Merrill Lynch in September for about $50 billion in stock, though by the time the deal closed Jan. 1 the deal was worth less than $20 billion. -
Peter MoreiraSee earlier Dealscape post on Merrill bonuses
