New Subpoenas in Bank of America Merger Probe

In a February letter to House Financial Services Committee Chairman Barney Frank, D-Mass., Cuomo explained: "In a surprising fit of corporate irresponsibility, it appears that, instead of disclosing their bonus plans in a transparent way as requested by my office, Merrill Lynch secretly moved up the planned date to allocate bonuses and then richly rewarded their failed executives. Merrill Lynch had never before awarded bonuses at such an early date, and this timetable allowed Merrill to dole out huge bonuses ahead of their awful fourth quarter earnings announcement and before the planned takeover of Merrill by Bank of America."

The issue of naming names from among the top earners at Merrill who netted a rich slice of a $3.6 billion bonus pool has been a contentious part of the Cuomo probe.

Thain, Merrill's former CEO, had to be served two subpoenas before he answered any questions on the bonuses. During his first deposition, he cited direction from Bank of America as the reason he would not answer. A judge in Manhattan State Supreme Court ordered him to testify and said the information would remain confidential until at least March 13, when he would rule on the matter.

Merrill's four top executives earned $121 million in 2008. There were 696 employees who earned bonuses worth more than $1 million. And according to the Journal, the top 10 earners made a combined $209 million "as the firm foundered." Also, according to the Journal, the bulk of that money was in the form of bonuses, as the base salaries for top Merrill executives "generally range from $200,000 to $750,000."

The new subpoenas for testimony are for Orcel, David Sobotka, head of global proprietary trading, Kraus, Montag, David Gu, David Goodman and Fares Noujaim, sources close to the investigation said.

The subpoenas were served even as Bank of America filed a petition asking Judge Bernard Fried to either "quash, fix conditions or modify" the subpoenas. Essentially, the bank wanted the names of bonus recipients and the amounts they received to remain confidential.

The bank asked that the subpoenas be changed "to include a confidentiality order such that the individual compensation information (including names and/or job titles and corresponding compensation amounts of Merrill and Bank of America employees who received bonuses in 2008) provided by Mr. Thain in response to the Thain Subpoena be kept confidential by the Attorney General's Office and not be disseminated to the public."

The bank asserted that no public interest would be served by the disclosure, nor was the disclosure relevant to the attorney general's investigation. With the petition, the bank filed a supporting memorandum.

Bank of America has stated in past, on the record, that it would be willing to provide Cuomo with the names and specific bonus information with the guarantee that the information remain confidential. Bank of America said Wednesday that it does not comment on subpoenas.

Page
  • 1
  • |
  • 2
  • |
  • 3
null
Join the Discussion
You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus
 
You Might Also Like...