BofA told to to give up more details about Merrill bonuses

Charlotte ObserverSeptember 8, 2009 

The office of New York Attorney General Andrew Cuomo told Bank of America that it is close to deciding who to charge as it investigates bonus payouts to Merrill Lynch employees.

It also told the bank to reconsider its repeated use of attorney-client privilege to avoid answering questions from Cuomo's office.

In a seven-page letter to Bank of America's outside lawyers, a Cuomo investigator highlighted examples of Bank of America and Merrill executives declining to answer questions about several topics, including what Bank of America knew about Merrill's losses before its shareholder vote, whether Merrill should have disclosed certain writedowns, and what Bank of America should have disclosed about Merrill's early bonus payments.

"The law is clear that Bank of America and its officers cannot assert an advice of counsel defense for their decisions, and at the same time persist in refusing to disclose the substance of the conversations with counsel," the chief of Cuomo's investor protection bureau wrote in a letter today to a Bank of America attorney.

Cuomo's office has been investigating how Merrill paid out $3.6 billion in bonuses to its employees ahead of schedule in December, before Bank of America bought the firm on Jan. 1. It is also examining whether regulators inappropriately pressured Bank of America CEO Ken Lewis into going through with the purchase.

Cuomo's office told Bank of America that it has till Monday to reconsider answering investigators' questions. Otherwise, Cuomo's office said, it will proceed with the investigation "without giving credit to the advice of counsel defenses."


McClatchy Washington Bureau is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service