New York attorney General Claims Merrill Lynch Has Secretly Paid Out $3.6 Billion In Bonuses

Brokerage firm Merrill Lynch "secretly and prematurely" paid out $3.6 billion in bonuses to its staff shortly before a fire sale takeover to prevent the firm's collapse, New York attorney general Andrew Cuomo has claimed. In a letter to US

By None

Brokerage firm Merrill Lynch “secretly and prematurely” paid out $3.6 billion in bonuses to its staff shortly before a fire sale takeover to prevent the firm’s collapse, New York attorney general Andrew Cuomo has claimed.

In a letter to US lawmakers, the prosecutor said the firm acted with the “apparent complicity” of Bank of America (BoA), which rescued Merrill Lynch before receiving a public bailout of its own, Bloomberg stated.

Mr Cuomo added that the bonuses were concentrated among a “select group” of employees, with the top four bonus recipients splitting $121 million. In all, 696 people received bonuses of $1 million or more.

The letter states that at the time of the payments, both Merrill Lynch and BoA must have known that the brokerage faced “disastrous” Q4 and full-year results.

Cuomo stated that the payments raise the possibility that Merrill Lynch and BoA timed the bonuses to “force taxpayers to pay for them” through the government’s bailout.

In a statement, Merrill Lynch said the incentives were proposed by its management and approved by its compensation committee while it was still an independent company.

The merger of Merrill Lynch and BoA created the world’s largest brokerage, with client assets of $2.5 trillion.

D.C.

«