Merrill Lynch bonuses totaled $3.6b
In all, Merrill "secretly and prematurely" awarded $3.6 billion in bonuses, with Bank of America's "apparent complicity," Cuomo said in a Feb. 10 letter to Representative Barney Frank, the Massachusetts Democrat who heads the House Committee on Financial Services. The letter was made public yesterday as chief executives from the eight largest US banks face off against lawmakers at a committee hearing in Washington.
Cuomo, a Democrat, has been examining whether Merrill broke securities laws when it paid the bonuses. He also is cooperating with Special Inspector General Neil Barofsky in a federal probe of executive pay at banks that got money from the Treasury's Troubled Assets Relief Program.
"One disturbing question that must be answered is whether Merrill Lynch and Bank of America timed the bonuses in such a way as to force taxpayers to pay for them through the deal funding," Cuomo said in the letter.
Cuomo, who has subpoenaed the testimony of former Merrill Lynch chief executive John Thain and Bank of America chief administrative officer J. Steele Alphin, said in the letter he would require top officials to answer the question. He said he plans to seek the testimony of other top executives at the firms.
Cuomo said the $3.6 billion in bonuses were distributed to "a small number of individuals." He said Merrill "chose to make millionaires out of a select group of 700 employees," and that an even smaller group was awarded "gigantic bonuses."
After the top four recipients received $121 million, the next four received a combined $62 million, he said, and the next six a combined $66 million. He didn't identify the recipients.