Bank of America
Chairman and CEO Kenneth Lewis was issued a subpoena late last week by New York State Attorney General Andrew Cuomo, who is investigating whether the bank withheld information from investors in violation of state law, the
Wall Street Journal
reports, citing people familiar with the matter.
Lewis is the highest-profile subject of Cuomo's investigation into Bank of America's purchase of
on Jan. 1. Cuomo's office is trying to determine if investors were misled about the depth of Merrill's losses in late 2008 and whether details of the bonuses to Merrill employees, contained in a nonpublic document, should have been disclosed to investors, according to the
Investigators took testimony all day Thursday from former Merrill CEO John Thain, the newspaper reports. Thain was asked about almost $4 billion in bonuses paid to Merrill employees. He also was asked why the September merger agreement contained a nonpublic attachment that outlined the maximum Merrill could pay. A Thain spokesman declined to comment, according to the
Shortly after the merger closed, Bank of America disclosed that Merrill lost $15.3 billion in the fourth quarter.
Thain was fired by Lewis in January after the bonus payments were made public and it was revealed that Merrill's losses were greater than previously anticipated.
Spokesmen for Bank of America and Cuomo's office could not be immediately reached for comment late Thursday.
Last week, Cuomo said in a letter sent to U.S. House Financial Services Chairman Barney Frank that the $3.6 billion in bonuses Merrill executives received was irresponsible, the
Shares of Bank of America fell 14% on Thursday to $3.93. The stock is down 67.5% so far in 2009.
This article was written by a staff member of TheStreet.com.