NEW YORK — New York’s attorney general and a key congressman are demanding that the chief executive of Bank of America Corp. immediately disclose details about individual bonuses paid to Merrill Lynch & Co. employees in December.
Charlotte, N.C.-based Bank of America acquired Merrill on Jan. 1.
The joint letter from New York Attorney General Andrew Cuomo and U.S. Rep. Barney Frank, D-Mass., to Bank of America CEO Ken Lewis comes as Cuomo’s office and Bank of America fight about whether details of individual bonuses should be made public.
On Friday, Cuomo asked a judge to reject a request from Bank of America to keep information confidential about the bonuses. Bank of America on Thursday requested a temporary confidentiality order be expanded to cover anyone who testifies on individual bonuses granted by Merrill. The order originally applied just to the testimony given by former Merrill Chief Executive John Thain.
Bank of America spokesman Scott Silvestri said Monday’s letter is broader, and goes beyond Merrill Lynch to include all recipients of government funds, including Bank of America.
“Bank of America has continued to offer to share Merrill Lynch bonus information with the New York Attorney General’s office subject to a reasonable confidentially agreement,” he said.
During his first deposition, Thain refused to provide information about individual bonuses, claiming he was worried about a potential lawsuit from Bank of America. He was forced to return for a second round of questioning, though it is unclear if he gave details about the bonuses then.
BofA’s Lewis testified about the bonuses two weeks ago, but did not reveal information about individual bonuses. Bank of America has been adamant throughout the investigation about not publicly disclosing details about individual bonuses.
Monday’s letter demands the information be made public because Bank of America has received $45 billion as part of the government’s bank investment program. As a recipient of the funds, Bank of America must provide better transparency and disclosure to taxpayers about where their money is being spent, Cuomo and Frank assert in Monday’s letter.
Frank, the chairman of the House Financial Services Committee, and other law makers have been insistent on knowing how financial institutions are spending taxpayers funds.
Cuomo’s office has been investigating the timing of $3.6 billion in bonuses New York-based Merrill paid to employees in December. His office is trying to determine if Merrill and Bank of America failed to provide adequate disclosures to shareholders about them and the more than $15 billion in losses Merrill incurred during the fourth quarter.
The North Carolina attorney general’s office has also been trying to get details about the bonuses.
Bank of America has repeatedly said Merrill Lynch was an independent company last year, and its board of directors had ultimate approval over how much to pay employees.
But the bonuses apparently were a point of contention for Bank of America. The initial reports of the bonuses came just days after Bank of America received an additional $20 billion from the government that the bank said it needed to help offset the losses it was absorbing from the Merrill acquisition. The additional support was provided to Bank of America as Lewis showed trepidation about completing the deal to acquire Merrill.
Thain resigned as head of global wealth management at the combined company in January just as news of the bonuses broke.
The government helped orchestrate the acquisition of Merrill by Bank of America over the same weekend in September that another investment bank, Lehman Brothers, went under, setting off the most intense period of the financial crisis.
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