Posted on 01/30/2009 11:48:59 PM PST by neverdem
Reuters
NEW YORK -- New York's attorney general issued a subpoena to former Merrill Lynch Chief Executive John Thain Tuesday in a probe into bonuses paid to the firm's employees just days before its takeover by Bank of America Corp.
Attorney General Andrew Cuomo is also examining disclosures by Bank of America related to Merrill's financial health, including the timing and adequacy of the disclosures, a source familiar with the situation told Reuters.
Mr. Cuomo did not outline specific crimes that may have been committed, only that his office sought testimony from the executives following the latest news on bonuses.
The legal action comes a day after Mr. Thain, who was ousted from Bank of America on Jan. 22, appeared on television to defend the acquisition he partly orchestrated, and charged that Bank of America knew of Merrill's losses and bonuses before it closed.
"The fact that Merrill Lynch appears to have moved up the timetable to pay bonuses before its merger with Bank of America is troubling to say the least and warrants further investigation," Mr. Cuomo said in a statement.
Bank of America spokesman Scott Silvestri declined to comment. It was not immediately clear whether Bank of America Chief Executive Kenneth Lewis might eventually also be subpoenaed.
Mr. Cuomo said his office issued a subpoena seeking testimony fromMr. Thain. Also subpoenaed was Bank of America Chief Administrative Officer J. Steele Alphin, Mr. Cuomo said.
Mr. Thain was ousted as Bank of America's head of global banking, securities and wealth management last week after a brief meeting with Mr. Lewis.
Speaking on CNBC on Monday, Mr. Thain said Bank of America was "completely plugged into" the amount of discretionary bonuses awarded, and even suggested Merrill adjust the ratio of cash to stock in the payouts.
The former Merrill CEO also said he would reimburse Bank of America for renovations to his office a year ago, the US$1.2-million price tag of which was disclosed on the day he was ousted.
Mr. Cuomo said his office is conducting its ongoing inquiry into executive compensation practices at companies taking part in the US$700-billion financial bailout fund together with the special inspector general of the federal aid program.
That's mighty white of Andy!
Andrew Cuomo is perhaps the most toxic waste of the mortgage/lending meltdown. Under former HUD Secretary Andrew Cuomo tenure between 1997 and 2001:
“At the time we discontinued our audit work, a total of 42 adjustments totaling about $17.6 billion had been processed in this manner to adjust fiscal year 1998 ending balances. An additional 242 adjustments totaling about $59.6 billion, were made to adjust fiscal year 1999 activity.” -SUSAN GAFFNEY, INSPECTOR GENERAL HUD, BEFORE THE HOUSE OF REPRESENTATIVES; COMMITTEE ON GOVERNMENT REFORM; SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,
INFORMATION AND TECHNOLOGY; MARCH 22, 2000
=> The book keeping chicanery more than tripled under Andrew Cuomo in one years time. Auditing was discontinued in 2000, this is when HUD became a criminal operation.
Note that 59.6 billion is 6.8 million dollars per hour in fiscal year 1999 activity -off books. Cuomo should be stocks on the capital steps.
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