Gasparino On Cuomo: AG Is Zeroing In On Merrill Lynch's Thain

CNBC's Charles Gasparino said there is a new focus in the Merrill Lynch bonus investigation.

New York Attorney General Andrew Cuomo is now looking at whether John Thain, former Merrill Lynch head, asked the board to approve $3.6 billion in bonuses knowing that the firm was in trouble.

Gasparino said he had spoken to people close to Thain, who said the chief executive had the authority to hand out $5.8 billion in bonuses by year-end, and that he had done nothing wrong.

According to Gasparino, Cuomo has already deposed Thain twice, and might go back for more. Cuomo is also planning to speak with Merrill Lynch board members, Gasparino reported.

Three things are at issue in the Cuomo investigation: Should Bank of America have disclosed to shareholders that before its acquisition of Merrill Lynch had closed, it had asked the Fed for help to make the deal work? When BofA head Ken Lewis testified about the acquisition to Congress, were his comments truthful? And third, were Thain's comments on the hill also truthful?

According to Gasparino, Cuomo could charge Thain or Lewis for fraud, or just issue a white paper outlining best practices for not paying out billions of dollars in bonuses immediately before announcing heavy losses.

The CNBC reporter expects the case to be wrapped up in a month.

Read this story on the letter written by Cuomo and Rep. Barney Frank telling BofA's Lewis his behavior "fuels distrust and cynicism."

Comments

[jazzman]

Nail the sucker!!

[Islandtime]

Charlie is a joke, CNBC is horrible.

[Dan Conner]

I would like to see some graybar hotel time for both Lewis and Thain

[mateoconifer]

charlie G has knows nothing

[facet]

Cuomo is looking at the governorship. He'll keep beating this drum until a bigger drum pops up to hit. Daddy Cuomo has been grooming baby boy for a long, long time. It is all politics. What a shame.

[Genep34]

Charlie G is a died in the wool republican and I don't trust anything he says at face value. He still believes the market is down because Obama is in charge. He says it started when Obama got a head in the polls.

[Lotto]

Who listens to CNBC any more? Of course he is blaming Obama who would you expect him to blame a Republican. Never.