Bank of America seeks to stop disclosure of Merrill bonuses
This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.
Bank of America Corp. is trying to stop more disclosure of the $3.6 billion in bonuses paid to key Merrill Lynch & Co. employees just before the bank bought the brokerage last year.
In a filing in state court in Manhattan, BofA said it would suffer ‘grave and irreparable harm’ if bonus recipents were publicly identified -- even though the names of a number of them were published in the Wall Street Journal this week.
BofA is seeking to intervene in New York Atty. Gen. Andrew Cuomo’s probe into whether Merrill and BofA failed to properly disclose any bonus agreements made as part of the merger deal.
BofA CEO Ken Lewis and former Merrill CEO John Thain already have been questioned by Cuomo’s office. On Wedneday, Cuomo subpoenaed seven people who received bonuses at Merrill, Bloomberg News reported, citing a person familiar with the matter.
From Bloomberg:
The information Cuomo seeks would provide a ‘road map’ revealing which business lines the banks believe to be most valuable and enable competitors to poach the bank’s top talent, Bank of America argued in the court filing. Disclosure of the information would also cause ‘internal dissension and consternation,’ pose security risks for the exposed bankers and their families and cause employees to leave, according to the filings. ‘Neither the individual names nor the job titles bear any reasonable or relevant relationship’ to Cuomo’s investigation, the firms argued in the documents. ‘Nor is there a reasonable or relevant reason to disclose such information to the general public.’
This is another mess that BofA shareholders just didn’t need, with Wall Street already petrified that loan losses at the bank could eventually lead to a government takeover.
BofA shares sank 42 cents, or nearly 12%, to $3.17 today, a new bear-market closing low.
-- Tom Petruno