The battle for bonus figures in the New York State investigation into the merger of Merrill Lynch and Bank of America got even uglier today, with the bank "threatening to sue" a former employee who was willing to unconditionally tell the state's attorney general which Merrill high-fliers received the thickest slices of a $3.6 billion bonus pie that was dished out on the eve of the January merger, state officials said Friday.
This latest public chapter came as New York Attorney General Andrew Cuomo's office replied to court documents filed Thursday by Bank of America that urged that the information remain confidential and that the confidentiality extend beyond former Merrill CEO John Thain's testimony to include statements from other executives, at least four of whom have already testified.
Fresh testimony given Thursday by former Merrill executive Gregory Fleming prompted the alleged threat to sue, Cuomo's office said.
Bank of America would not comment on specifics but said in a statement, "Bank of America has continually offered to provide the information the attorney general is seeking if he would agree to an appropriate confidentiality agreement. He has continually declined."
In response to Cuomo's assertions in court documents that Bank of America's confidentiality conditions were unwarranted, the bank replied in a statement that Cuomo's investigation did not require the freedom to argue his case in the news media.
"Bank of America does not believe the attorney general needs the freedom to place private, personal information in the news media in order to conduct his investigation and determine if laws were possibly broken," said the statement issued by Scott Silvestri, a company spokesman.
The chief of Cuomo's Investor Protection Bureau, David Markowitz, argued otherwise in the court filing, to which Silvestri responded.
"Bank of America makes an unfounded assertion of confidentiality, even though it has no policy to protect the information. Its employees routinely share their compensation with competitors when seeking new employment, and Bank of America regularly seeks and obtains detailed compensation information from its competitors' employees," Markowitz said in a letter to New York State Supreme Court Justice Bernard Fried.
Fried is overseeing the confidentiality spat and is expected to rule next week on the issue as it pertains to testimony taken from Thain.
The ongoing wrangle over the disclosure of bonus information is a hot button issue in the probe into whether Merrill Lynch or Bank of America, or either firm's employees, violated securities laws in the awarding of $3.6 billion in bonuses on the eve of the merger.
Cuomo wants the information without any restrictions on its release to the public, a condition that Bank of America finds unacceptable. The bank maintains that disclosing the specifics of compensation packages awarded to individual investors would, among other things, place the firm at a competitive disadvantage.