Report: Bank of America subpoenaed by Cuomo

John O'Brien Feb. 20, 2009, 11:00am


NEW YORK (Legal Newsline) - New York Attorney General Andrew Cuomo has apparently subpoenaed the head of the nation's largest bank to determine if it withheld information from investors while acquiring Merrill Lynch.

Cuomo recently sent a subpoena to Bank of America CEO Kenneth Lewis, CNN reported Friday. The first-term Democrat has previously probed the nation's largest financial institutions to gather information on executive bonuses.

Merrill Lynch, recently acquired by Bank of America, was one of those institutions. Cuomo says Merrill Lynch, before the acquisition, rushed bonuses of at least $1 million to 696 employees, with $121 million going to the top four, the CNN report says.

"While more than 39,000 Merrill employees received bonuses from the pool, the vast majority of these funds were disproportionately distributed to a small number of individuals," Cuomo wrote in a letter to Rep. Barney Frank, D-Mass.

"Indeed, Merrill chose to make millionaires out of a select group of 700 employees."

Cuomo is keeping a close eye on those businesses that benefited from a federal bailout, and Bank of America has received $45 billion in taxpayer money.

Cuomo also claimed Merrill handed out the bonuses ahead of its federally funded acquisition by Bank of America, which was announced in mid-September and closed by year's end.

Bank of America spokesman Scott Silvestri that his company had no control over Merrill Lynch when the bonuses were awarded, the report says.

"Bank of America did urge the bonuses be reduced, including those at the high end," Silvestri wrote. "Although we had a right of consultation, it was their ultimate decision to make."

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