"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," Cuomo said.
The state has subpoenaed former Merrill Lynch Chief Executive Officer John Thain in the inquiry, The Wall Street Journal reported Tuesday.
The case involves a wider probe into executive pay among firms that received federal funds from the $700 billion Trouble Asset Relief Program.
Thain has said Bank of America took part in the decision to pay bonuses to Merrill Lynch executives earlier than scheduled.
But, sources close to Bank of America said the bank did not know the extent of losses at Merrill Lynch.
Bank of America bought Merrill Lynch, which lost $15.3 billion in the fourth quarter, on Jan. 1.
Thain, for his part, has said he would reimburse Merrill Lynch for $1.2 million spent to renovate his office in 2007, the Journal reported. Those renovations, including four pairs of curtains priced at $87,784, were incurred "in a very different environment," Thain said.