Cuomo subpoenas Merrill’s Thain on bonus payments
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New York’s attorney general wants to talk to former Merrill Lynch & Co. chief John Thain about the bonuses he approved for Merrill employees in December.
From Bloomberg News:
New York Atty. Gen. Andrew Cuomo subpoenaed former Merrill Lynch & Co. head John Thain and Bank of America Corp. Chief Administrative Officer J. Steele Alphin to testify about executive bonuses paid by Merrill just before its takeover by Bank of America.
The subpoenas are part of an investigation into the billions of dollars in bonuses paid by Merrill late last year, Cuomo said today in a statement. ‘The fact that Merrill Lynch appears to have moved up the timetable to pay bonuses before its merger with Bank of America is troubling to say the least and warrants further investigation,’ Cuomo said in the e-mailed statement.
Thain was ousted by BofA last week, after Merrill suffered a $15-billion fourth quarter loss and the bank was forced to seek another capital infusion from the government.
BofA took control of Merrill on Jan. 1. Before the merger was consummated, Thain sped up annual bonus payments so that employees got them in December rather than early this year.
Thain on Monday said the size and timing of the bonus payments ‘were all determined together with Bank of America.’
BofA said Thain and Merrill made the bonus decisions and that the bank had no legal right to challenge them, because Merrill was independent until Jan. 1. But the Financial Times reported on Sunday that Alphin had had conversations with Thain about the bonus timetable.
-- Tom Petruno