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New York serves BoA with subpoena

Feb. 20, 2009 at 8:13 AM   |   Comments

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NEW YORK, Feb. 20 (UPI) -- New York state officials served Bank of America Chief Executive Officer Ken Lewis with a subpoena to probe into the bank's bonus pay policy.

Bank of America purchased Merrill Lynch late last year and both banks have received billions in taxpayer assistance to weather the financial crisis. But New York Attorney General Andrew Cuomo has claimed the firms secretly handed out $3.6 billion in bonus pay to Merrill Lynch employees, CNN reported Friday.

The top four bonus checks totaled $121 million. In addition, at least $1 million was given to 696 employees in payments approved just before Bank of America took over Merrill Lynch, CNN said.

"Merrill Lynch's decision to secretly and prematurely award approximately $3.6 billion in bonuses and Bank of America's apparent complicity in it raises serious and disturbing questions," Cuomo wrote in a letter to U.S. House of Representatives Committee on Financial Services Chairman Barney Frank, D-Mass.

"While more than 39,000 Merrill employees received bonuses from the pool, the vast majority of these funds were disproportionately distributed to a small number of individuals," Cuomo wrote.

Bank of America spokesman Scott Silvestri told CNN Merrill Lynch was "an independent company" when the bonuses were distributed.

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