Attorney General of New York Andrew Cuomo took Bank of America to court to force them to reveal the information, after the bank said it was proprietary. But Wednesday New York State Supreme Court Judge Bernard Fried denied Bank of America's motion to keep the names secret saying the Attorney General of New York has the "authority to decide whether the information he gathers as part of his investigation should be kept secret or public."
Wednesday's decision could set a precedent on the issue of revealing bonus details to the public. Cuomo has also subpoenaed AIG to reveal the names and amounts of the controversial bonuses issued late last week to members of their Financial Products division, blamed for the insurance company's disastrous losses in 2008.
"Today's decision in the Bank of America case is a victory for taxpayers. Let the sun shine in. Justice Fried's decision will now lift the shroud of secrecy surrounding the $3.6 billion in premature bonuses Merrill Lynch rushed out in early December," said Cuomo following the decision.
"Bank of America chose litigation over transparency and we are gratified that this tactic has failed. AIG should take heed and immediately turn over the list of bonus recipients we have subpoenaed. The deadline for responding to our subpoena is tomorrow. More litigation is not the answer - it is time for AIG to come clean," he warned.
The judge rejected Bank of America's argument that its compensation information was a trade secret, akin to the secret formula of Carvel ice cream. Fried wrote "the evidence does not show that Bank of America requires its employees to keep their compensation confidential." Further, Fried decided "there is no legal basis for the proposed petitions to quash, fix conditions or modify subpoena and for a protective order."
A spokesperson for Bank of America said the company will comply with the judge's order. "We will of course comply with the order of the court and turn over the information requested. We will continue to cooperate with the AG's investigation."
In court last week, Bank of America compared itself to the maker of Fudgy the Whale. It said the list of the top 200 Merrill Lynch employees awarded bonuses in late 2008 was like the formula for Carvel Ice Cream: a trade secret.
"We want the names kept private," said Evan Davis, an attorney with Cleary Gottlieb Steen & Hamilton LLP representing Bank of America.
"If those names are published it will cause us harm," Davis said adding "our competitors want this information."
A lawyer in the New York Attorney General's office, Eric Corngold, argued bonus payments are no trade secret.
"Salary information is not a trade secret," Corngold told the judge. "It's not like a formula for ice cream."
Corngold said the Office of the Attorney General is conducting a "broad investigation" to try and "get to the bottom of a set of very complicated issues."
Cuomo has been investigating $3.6 billion in bonuses Merrill Lynch paid to employees just before it was acquired by Bank of America and reported a loss of nearly $16 billion. The acquisition was financed, in part, with taxpayer dollars.