New York's Attorney General Subpoenas Merrill Lynch Executives Over Bonus Payments

Executives at Wall Street brokerage Merrill Lynch have been subpoenaed by New York's attorney general as part of an investigation into the payment of around $3.6 billion in bonuses prior to its emergency merger with Bank of America. Among those

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Executives at Wall Street brokerage Merrill Lynch have been subpoenaed by New York’s attorney general as part of an investigation into the payment of around $3.6 billion in bonuses prior to its emergency merger with Bank of America.

Among those called to give testimony are Merrill’s head of global sales and trading Thomas Montag, its ex-head of strategy Peter Kraus and London-based investment banker Andrea Orcel, the Wall Street Journal reports.

New York attorney general Andrew Cuomo previously revealed in a letter to US lawmakers that the company had “secretly and prematurely” paid bonuses to a “select group” of employees prior to announcing crippling losses that forced a fire sale of the firm to BoA.

The payments raised the possibility that Merrill and BoA timed the bonuses to “force taxpayers to pay for them” with government bailout money.

Merrill Lynch has previously stated that the payments were proposed by its managers and approved by the company’s compensation committee while it remained an independent firm.

D.C.

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