Thursday, February 12, 2009
Merrill Lynch quietly paid out bonuses of at least $1 million each to 696 top executives while the investment house was suffering terminal losses last year, an investigation by the New York state Attorney General's office revealed.
This was part of the $3.6 billion in total bonus payments that the firm dished out in December, just before the announcement of its fourth quarter losses and its takeover by Bank of America.
Bank of America’s shareholders voted to approve the Merrill takeover on December 5. On December 8, a month ahead of schedule, Merrill approved the bonus payouts. Days later, after learning of Merrill’s $15.3 billion fourth-quarter losses, Bank of America requested ,and then later received, another $20 billion in TARP money on January 16th.
Bank of America officials recently acknowledged that they were aware of the amounts and timing of the bonuses, despite previous reports that suggested the bank executives were surprised, and displeased, by the payout.
“These payments and their curious timing raise serious questions as to whether the Merrill Lynch and Bank of America boards of directors were derelict in their duties and violated their fiduciary obligations,” New York Attorney General Andrew Cuomo wrote in a letter to Barney Frank, chairman of the House of Representatives Financial Services Committee. Cuomo added, “One disturbing question that must be answered is whether Merrill Lynch and Bank of America timed the bonuses in such a way as to force taxpayers to pay for them through the deal funding,"
Merrill Bonuses Made 696 Millionaires: Probe (Agence France Presse)
Comments