UPDATE:Bank Of America CEO Completes Testimony Before NY AG
26 Febrero 2009 - 9:18PM
Noticias Dow Jones
Bank of America Corp. (BAC) Chief Executive Kenneth Lewis
testified in a meeting with New York Attorney General Andrew
Cuomo's office for four hours Thursday about $3.6 billion in
bonuses handed out to Merrill Lynch & Co. employees on the eve
of its merger with the bank last year.
Benjamin Lawsky, deputy counselor and special assistant to
Cuomo, said the attorney general's office served a subpoena to Bank
of America during the lengthy session, asking for the Charlotte,
N.C., bank to turn over a list of who received bonuses at Merrill
Lynch.
Lawsky said Bank of America had refused to turn over the
information in recent weeks and Cuomo's office had hoped to
question Lewis about the list on Thursday.
"Attorney General Cuomo is disappointed and frustrated," Lawsky
said.
Robert Stickler, a Bank of America spokesman, said the bank has
been offering to provide Cuomo's office with the names for two
weeks, as long as Cuomo agrees to keep them confidential. "We
believe our employees are entitled to their privacy," Stickler
said. "We believe putting those names out publicly would put us at
a competitive disadvantage. Our competitors would know what our
people are making. If he would sign a confidentiality agreement, he
would get those names very quickly."
Cuomo's office is probing disclosures related to the timing and
nature of more than $3.6 billion in bonus payments made shortly
before Bank of America's merger with Merrill Lynch closed last
year.
Lawsky said the session covered many topics.
Lewis gave a brief statement to reporters after the session,
saying it was a long day and he was tired.
"I answered the questions that were asked to the best of my
ability," Lewis said. "I hope I brought some clarity."
Lewis took a corporate jet to Teterboro Airport in New Jersey,
just outside of New York City, to give his testimony on Thursday.
"It was the most efficient way to get there," Stickler said.
Earlier this month, Cuomo said Merrill Lynch awarded bonuses to
more than 39,000 employees shortly before the merger, with nearly
700 employees getting more than $1 million apiece.
John Thain, Merrill Lynch's former chief executive, was forced
out last month in the wake of his handling of the investment bank's
fourth-quarter loss. In a regulatory filing this week, Merrill
Lynch reported a fourth-quarter loss of $15.84 billion, $500
million higher than prior estimates.
The investment bank set the bonus payouts in early December,
when it was anticipating only about $7 billion of losses, according
to Cuomo's office.
At a Feb. 19 deposition, Thain declined to talk about the
decision-making process behind the 2008 bonus awards, except in
regards to five employees, Cuomo's office has said. Those five,
including Thain, voluntarily gave their bonuses up. Thain claimed
that his refusal to answer questions about the process or the
amounts of the bonuses handed out was based on an instruction from
Bank of America, according to Cuomo's office.
A New York state judge on Monday ordered Thain to provide more
details about how the bonus amounts were determined. Thain gave
additional testimony Tuesday, but details of that testimony haven't
been made public.
A spokesman for Thain has said the former investment bank chief
will cooperate fully with the investigation.
Previously, Thain has said the "size of the pool, its
composition (cash and stock mix), and the timing of the payments
for both the cash and stock were all determined together with Bank
of America" and approved by Merrill Lynch's compensation committee
and its board.
Merrill Lynch employees received a portion of their compensation
in Bank of America stock on Jan. 2.
Bank of America has received about $45 billion from the U.S.
government, including $10 billion that Merrill Lynch was slated to
receive if the merger hadn't closed.
-By Chad Bray, Dow Jones Newswires; 212-227-2017;
chad.bray@dowjones.com
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