BofA Directors Subpoenaed By Cuomo
NEW YORK (
) -- Five
Bank of America
(BAC) - Get Report
directors have reportedly been drawn into at least one investigation of the Merrill Lynch deal.
New York Attorney General Andrew Cuomo has subpoenaed five directors, according to news reports citing anonymous sources. He is seeking information about what they knew of Merrill's escalating losses and bonuses ahead of the merger.
Cuomo and federal Judge Jed Rakoff have both been asking for more details about the deal to ascertain culpability.
Cuomo is reportedly preparing to charge individuals in the case, and is likely seeking evidence to back up his prosecution. It's unclear which individuals could face charges, though nine board members have left and five new ones have been appointed since the transaction closed on Jan. 1.
The board members at the time of the deal included: William Barnet, Frank Bramble, Virgis Colbert, John Collins, Gary Countryman, Tommy Franks, Charles Gifford, CEO Ken Lewis, Monica Lozano, Walter Massey, Thomas May, Patricia Mitchell, Joseph Prueher, Charles Rossotti, Thomas Ryan, Robert Tillman, O. Temple Sloan and Jackie Ward.
Sloan and Ward were targets of shareholders who campaigned for their ouster, since they were responsible for oversight of issues directly related to the embattled merger. Sloan, who stepped down in May, was head of the executive and compensation and benefits committees, and also a member of the corporate governance committee. Ward was chair of the asset-quality committee and stepped down in June along with Patricia Mitchell.
Countryman, Tillman, Prueher, Franks, Barnet and Collins have also left the board.
The Merrill deal has already led to litigation and inquiries involving Congressional hearings, Cuomo's office, the Securities and Exchange Commission and Judge Rakoff.
Shareholders have also filed suit, claiming the bank did not disclose material information on a timely basis. Executives did not disclose Merrill's mounting losses and $5.8 billion worth of planned bonuses prior to the shareholder vote that went in favor of the deal, the suit asserts.
-- Written by Lauren Tara LaCapra in New York
.
