Cuomo sent a letter to U.S. House Financial Services Chairman Barney Frank detailing the bonuses. In January, Cuomo issued a subpoenas to Merrill executives, including former CEO John Thain (see “Thain Receives Subpoena in Merrill Bonuses Probe’).
Cuomo is probing $3.6 billion in bonuses paid by Merrill Lynch just days before the BoA takeover. In his letter, Cuomo said he requested information about Merrill’s expected bonuses back in October, but never received the information.
He wrote: “Rather, 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.’ He said that Merrill Lynch had never before awarded bonuses at such an early date, and did so in order to dole out huge bonuses before the Bank of America takeover and an announcement of bleak fourth-quarter earnings.
Cuomo noted that Merrill Lynch suffered losses requiring Bank of America to seek federal aid, thus burdening the taxpayers. “Taxpayers are being crushed by the losses on Wall Street and now are paying billions in bailout funds,’ he wrote. “My investigation into whether these bonus payments violated New York’s fraudulent conveyance statute and whether the lack of disclosures concerning these payments and other matters violated the Martin Act will continue.’