BUSINESS
04/11/2009 05:12 am ET Updated May 25, 2011

Cuomo Accuses Merrill Of "Misleading" Congress On Timing Of Bonuses

SCROLL DOWN FOR THE COURT FILING

New York Attorney General Andrew Cuomo, in a court filing, accused Merrill Lynch of "misleading" Congress about the timing of $3.6 billion in bonuses.

Though a lawyer for Merrill told Rep. Henry Waxman, chairman of the House Committee on Oversight and Government Reform, last November that "incentive compensations for 2008 have not yet been made," the firm had already decided to "accelerate bonus payments," according to the filing:

Neither Bank of America nor Merrill disclosed this new timetable to the public
(Id. at Ex. C at 148-50). To the contrary, Merrill represented to the Attorney General on
November 5, 2008 and to the United States House Committee on Oversight and
Government Reform on November 24, 2008 that it planned to make incentive
compensation decisions at year-end (/d. at Ex. J and Ex. K). These representations, and in particular the representation made to the Congressional Committee on November 24,
2008, were misleading.3 Merrill's November 24, 2008 representations to Congress were
made after Merrill had determined to accelerate bonus payments in a manner different
from its typical year-end process (Id. at Ex. Gat 50).

In his filing, Cuomo also asked a judge to "end a temporary confidentiality order that keeps private the details of bonuses paid to Merrill Lynch & Co. employees just before the firm was sold to Bank of America Corp.," reports the AP.

On Friday, a judge is scheduled to rule on whether that temporary order, which was put into place after former CEO John Thain testified about the bonuses, should be made permanent.

According to the AP:

During his first deposition, Thain refused to provide information about individual bonuses, claiming he was worried about a potential lawsuit from Bank of America. He was forced to return for a second round of questioning, though it is unclear if he gave details about the bonuses then.

BofA's CEO Ken Lewis testified two weeks ago, but did not reveal information about individual bonuses. During that testimony, Cuomo's office subpoenaed Lewis a second time in hopes of eventually getting the information.

On Monday, Cuomo and Rep. Barney Frank, D-Mass., sent a letter to Bank of America demanding the information be made public because the bank has received $45 billion as part of the government's bank investment program. As a recipient of the funds, Bank of America must provide better transparency and disclosure to taxpayers about where their money is being spent, Cuomo and Frank assert in Monday's letter.

Cuomo filing - Get more Business Documents