Former Merrill Execs Subpoenaed

Seven former executives at Merrill Lynch were subpoenaed and will be questioned about bonuses they were paid while with the company. Peter Kraus, Thomas Montag, David Goodman, Andrea Orcel, Fares Noujaim, David Sobotka and David Gu were subpoenaed by Andrew Cuomo, the attorney general in the state of New York.

Merrill Lynch - Source: Flickr

The reason why the bonuses have been questioned is in regards to the timing. According to various reports, Merrill executives received bonuses totaling more than $3.5 billion. Less than a week later, Bank of America took over Merrill. Less than month later, Merrill announced that it had fourth quarter losses of approximately $20 billion.

Cuomo will try to make sure that the correct procedure was made during the period in which the executives received their bonuses. According to reports, industry experts aren’t convinced that shareholders for Bank of America and Merrill Lynch were properly notified and also question whether the executives had inappropriate discussions with John Thain, the former chief executive officer of Merrill.

Bank of America, who took federal government assistance during their acquisition of Merrill, is reportedly cooperating with the investigation.