New York attorney general Andrew M. Cuomo has his eye on recovering the $4 billion in bonuses distributed by Merrill Lynch just before its acquisition by Bank of America., according to Bloomberg.
Merrill’s bonuses were distributed in December — a month earlier than usual. Then, on Jan. 16, the firm reported a record $15.3 billion loss for the fourth quarter.
Mr. Cuomo wants to know how much Bank of America chief executive Kenneth Lewis knew about the bonuses and the losses, a source told Bloomberg.
He is trying to determine if New York securities laws were violated. If so, he could seek fines or recovery of the bonus payments.
The attorney general is initiating a probe into whether shareholders at Charlotte, N.C.-based Bank of America Corp. and New York-based Merrill Lynch & Co. Inc. had all the information on the wirehouse’s finances and whether the bank made proper use of its federal bailout money, an insider told Bloomberg.
Earlier this week, Mr. Cuomo subpoenaed Merrill’s ex-CEO John A. Thain and J. Steele Alpha, Bank of America’s chief administrative officer.
He also announced that his office will investigate executive pay practices at institutions that received bailouts through the Troubled Asset Relief Program, cooperating with TARP special inspector general Neil Barofsky.
A call to Merrill Lynch spokesman Bill Holden was not immediately returned.
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