The Journal stays ahead on the Bank of America/Merrill Lynch story this morning, with a scoop that the New York Attorney General has subpoenaed CEO Ken Lewis to testify in the investigation into Merrill’s billions in bonuses and whether it misled investors.
Ex-Merrill CEO John Thain testified yesterday, and it sounds like it was a grilling.
Mr. Thain was questioned all day, say the people familiar with the matter. They asked Mr. Thain about the nature of some $4 billion in bonuses to employees.
In particular, they wanted to know why the September merger agreement contained a nonpublic attachment that outlined the maximum Merrill could pay.
The New York AG’s office has seemingly always had a pipeline into the Journal newsroom, going back at least to Eliot Spitzer and his investigations:
The person close to the matter said regulators are turning their attention to Mr. Lewis and are looking at his testimony to Congress earlier this month when he said he had “no authority” over bonuses given they were detailed in the merger agreement and part of the bonuses were paid in Bank of America stock.
Mr. Cuomo’s investigators are exploring how Merrill could have set and then informed employees about the bonuses before the quarter closed, according to a person familiar with the matter. They are probing whether trading losses were adequately disclosed to shareholders and boards of each company and what the top executives approving the bonuses knew about the losses.
The WSJ says Cuomo wants to know if Lewis lied when he said he couldn’t have stopped the Merrill bonuses, which were handed out before the merger was completed.
This is interesting, too:
Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.Mr. Cuomo’s investigators are exploring how Merrill could have set and then informed employees about the bonuses before the quarter closed, according to a person familiar with the matter. They are probing whether trading losses were adequately disclosed to shareholders and boards of each company and what the top executives approving the bonuses knew about the losses.
