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Politics : Sioux Nation -- Ignore unavailable to you. Want to Upgrade?

To: Wharf Rat who wrote (159325)	1/29/2009 10:24:58 PM
From: stockman_scott	Read Replies (2) \| Respond to of 362002

Cuomo Said to Eye Return of $4 Billion in Early Merrill Bonuses By Erik Larson Jan. 29 (Bloomberg) -- New York Attorney General Andrew Cuomo may demand the return of $4 billion in bonuses paid by Merrill Lynch & Co. just before it was acquired by Bank of America Corp., a person familiar with the matter said. Cuomo also wants to know what Bank of America Chief Executive Officer Kenneth Lewis, 61, knew about the accelerated bonuses and about Merrill’s surprise $15 billion net loss in the fourth quarter, the person said. Lewis fired Merrill’s CEO John Thain this month after the losses required more federal aid. The attorney general’s office is looking at whether the companies’ shareholders had all necessary information about Merrill’s finances and whether federal bail-out loans to Bank of America were used properly, the person said, asking not to be identified because the investigation is confidential. “No longer will this country stand for wasteful spending of tax dollars on bonuses for executives whose companies have taken huge losses and required taxpayer bailouts,” Cuomo said today in a statement about bonuses paid at Wall Street firms that received funds from the Troubled Assets Relief Program or TARP. The Wall Street Journal reported the expanded nature of Cuomo’s investigation earlier today. Thain, 53, and Bank of America’s chief administrative officer were subpoenaed this month by Cuomo. The attorney general wants to find out what Thain told his firm’s directors and Bank of America officials about ballooning losses in December, the person said. Thain was in charge of trading, investment banking and brokerage operations at the combined company, which is based in Charlotte, North Carolina. Possible Fines Cuomo is now looking at whether the handling of data on the losses and on Merrill’s bonuses -- paid in December instead of their usual date in January -- may have violated New York securities laws and warrant imposition of fines, the person said. In October, Cuomo sent letters demanding data from Citigroup Inc., JPMorgan Chase & Co. and seven other banks that qualified for TARP funds. The request came a day after congressional investigators asked the banks to justify their bonuses. President Barack Obama said today that it was “shameful” that the banks had paid out $18.4 billion in bonuses as taxpayers bailed out companies and the U.S. recession deepened. Such bonuses are “the height of irresponsibility,” Obama said. Cuomo, a Democrat, is cooperating with Special Inspector General Neil Barofsky in a federal probe of executive pay at banks that got TARP money. Piggybacking on that investigation gives Cuomo’s office more auditing power than it normally has because state and federal investigators will share information, the person said. Bank of America spokesman Scott Silvestri didn’t immediately return a call for comment. Jesse Derris, Thain’s public relations representative with the firm Sunshine, Sachs & Associates, declined to comment. Bonuses Discussed Thain said in a Jan. 25 memo to top executives that the size and timing of the bonus payments “were all determined together with Bank of America.” The bonus pool was 41 percent less than the previous year and was “substantially less than the amount allowed under our merger agreement,” Thain said in the memo. In December, Thain agreed to forgo his year-end bonus after he had earlier suggested a payment of $5 million to $10 million in conversations with board members, a person familiar with the matter said at the time. “John Thain and the Merrill Lynch compensation committee made the decision on the amount and timing of year end compensation at Merrill Lynch,” Bank of America said yesterday in a statement. “We had no legal right to challenge it.” To contact the reporter on this story: Erik Larson in New York at elarson4@bloomberg.net. Last Updated: January 29, 2009 18:58 EST