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Cuomo subpoenas 5 Bank of America board members over Merrill Lynch deal

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Joanne98 Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-16-09 02:02 PM
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Cuomo subpoenas 5 Bank of America board members over Merrill Lynch deal
Source: AP

NEW YORK (AP) -- The New York Attorney General's office subpoenaed five members of Bank of America Corp.'s board of directors Wednesday as part of an investigation into the bank's acquisition of Merrill Lynch & Co., according to a personal familiar with the investigation.

The board members are expected to be questioned about what they knew regarding the mounting losses and bonus payments at Merrill ahead of the deal's completion on Jan. 1, said the person, who asked for anonymity because the investigation is ongoing. It wasn't immediately clear which directors received the subpoenas.

New York Attorney General Andrew Cuomo's office is also likely to ask the board members about any threats made by federal regulators to remove the board if the deal wasn't completed, as BofA executives have said.

The subpoenas come as Cuomo's office is preparing to file fraud charges in the coming weeks against several high-ranking executives at the Charlotte, N.C.-based bank over its acquisition of the troubled investment bank.

Bank of America agreed to acquire Merrill Lynch in a hurried deal almost exactly one year ago at the height of the financial crisis, just as Lehman Brothers was about to file for bankruptcy. It was later revealed that Merrill, with the knowledge of Bank of America executives, paid Merrill employees $3.6 billion in bonuses just before the deal closed at the beginning of this year.

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UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-16-09 10:23 PM
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1. Cuomo Is Said to Issue Subpoenas in Merrill Case
Source: New York Times

Capping a week of scrutiny for Bank of America, New York Attorney General Andrew M. Cuomo took another swing on Wednesday at uncovering which of the bank’s executives knew about large losses and bonus payouts at Merrill Lynch just before the two banks merged last year.

In an unusual move that could herald closer examination of corporate boards, Mr. Cuomo issued subpoenas to five current and former directors of the bank as part of his continuing inquiry into its hastily arranged takeover of Merrill, a person briefed on the investigation said.

A second person briefed on the inquiry said the directors who had received subpoenas included members of the firm’s audit committee, which was responsible for reviewing significant legal matters, including the takeover of Merrill.

Both the individuals who had been briefed on the inquiry asked not to be identified because they had signed confidentiality agreements involving the matter.

The subpoenaed board members include William Barnet III, a real estate executive and the mayor of Spartanburg, S.C.; John T. Collins, a venture capital investor based in Boston; Tommy R. Franks, the retired four-star Army general; Walter E. Massey, the former president of Morehouse College in Atlanta; and Thomas J. May, head of the Boston utility company NSTAR, this person said.

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DURHAM D Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-16-09 10:24 PM
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2. Really glad to see Tommy Franks on that list.
Hope he gets sent to Gitmo.
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