New York Attorney General Andrew Cuomo accused Merrill Lynch & Co. executives of corporate irresponsibility by secretly and prematurely awarding $3.6 billion in bonuses as taxpayers were bailing out the industry.
Cuomo made the claims in a letter sent Wednesday to U.S. House Financial Services Chairman Barney Frank.
“In a surprising fit of corporate irresponsibility, it appears that, instead of disclosing their bonus plans in a transparent way as requested by my office, Merrill Lynch secretly moved up the planned date to allocate bonuses and then richly rewarded their failed executives,” Cuomo stated.
“Merrill Lynch had never before awarded bonuses at such an early date, and this timetable allowed Merrill to dole out huge bonuses ahead of their awful fourth quarter earnings announcement and before the planned takeover of Merrill by Bank of America,”
Cuomo said in the letter.
Cuomo said Bank of America, whose deal to acquire Merrill closed at the end of the fourth quarter, was apparently complicit in the move to award bonuses before Merrill's fourth quarter earnings were announced. The Democrat surmised that Bank of America must have been aware that Merrill Lynch's fourth quarter and yearly earnings were “disastrous.”
Bank of America spokesman Scott Silvestri didn't immediately comment. Last month, as reports of the Merrill bonuses first circulated, Bank of America noted that the bonus payments were made when Merrill was still an independent company.
Cuomo said four executives alone received bonuses totaling $121 million.