NEW YORK (Legal Newsline) - New York Attorney General Andrew Cuomo on Monday wrote Bank of America CEO Kenneth Lewis, criticizing his decision not to reveal information regarding executive bonuses at Merrill Lynch.
Bank of America recently completed its purchase of Merrill Lynch, but Cuomo says bonuses of at least $1 million to 696 employees, with $121 million going to the top four, were rushed before the acquisition.
Bank of America agreed in September to buy Merrill Lynch for $50 billion, and Cuomo thinks Bank of America may have known about the bonuses and did not tell investors. He has also filed a state court action seeking to force former Merrill Lynch CEO John Thain to disclose the specifics of the company's executive bonuses.
"As a result of Merrill's huge losses, taxpayers were forced to help Bank of America acquire Merrill by providing billions of additional (federal bailout) funds, as well as insurance against losses from Merrill's toxic portfolio," wrote Cuomo, who was joined in the letter by U.S. Rep. Barney Frank (D-Mass.).
"In short, the combined Bank of America-Merrill Lynch entity received $45 billion in taxpayer funds as well as $188 million in taxpayer-funded insurance... Taxpayers who are footing the bill obviously demand accountability and want to know who received these funds and why."
Cuomo wrote that his goal is to stabilize the country's financial institutions and system and is acting in the interests of taxpayers.
"Transparency and disclosure are the building blocks of that trust and confidence," he wrote. "Your refusal to reveal compensation information fuels distrust and cynicism at a most sensitive time."
A recent report by The Associated Press says Bank of America spokesman Robert Stickler told Cuomo he would provide the names of those who received the bonuses if Cuomo would protect the information.
Cuomo did not agree to do that.
"We believe our employees are entitled to confidentiality in terms of their compensation," Stickler told the AP.
From Legal Newsline: Reach John O'Brien by e-mail at email@example.com.