Former Merrill CEO John Thain, who was subpoenaed last month, also was questioned by investigators on Thursday about the bonuses that were paid in late December, just days before Bank of America completed its purchase of New York-based Merrill, according to a person familiar with the investigation. The person requested anonymity because of the ongoing nature of the matter.
Bank of America spokesman Robert Stickler on Friday declined to comment directly on the matter, adding "we do not comment on questions about subpoenas."
Bank of America shares fell 65 cents, or 16.5 percent, to $3.28 in morning trading, after falling to a 25-year low — or $3.19 — earlier in the session.
New York Attorney General Andrew Cuomo has been investigating $3.6 billion in bonuses Merrill Lynch & Co. executives received, and whether investors were properly informed about Merrill’s finances.
Last week, Cuomo said in a letter sent to U.S. House Financial Services Chairman Barney Frank that the bonuses were irresponsible.
The payments came as Merrill was on the brink of reporting a more than $15 billion fourth-quarter loss. The bank was among the hardest hit by the ongoing credit crisis.
Cuomo said in the letter to Frank that Charlotte, N.C.-based Bank of America was apparently complicit in the move to award bonuses before Merrill’s fourth-quarter loss was announced.
Last week, Bank of America spokesman Scott Silvestri said in a statement that Merrill Lynch was an independent company last year, and its board of directors had ultimate approval over how much to pay employees.
Cuomo has already subpoenaed Thain and Bank of America’s chief administrative officer, J. Steele Alphin, as he investigates the timing of the bonuses. Cuomo is likely to seek testimony from other executives at the banks, according to the letter.