By Martha Graybow and Jonathan Stempel
Tue Jan 27, 2009 12:53pm EST
NEW YORK (Reuters) - New York's attorney general issued a subpoena to former Merrill Lynch Chief Executive John Thain on Tuesday in a probe into bonuses paid to the firm's employees just days before its takeover by Bank of America Corp.
Attorney General Andrew Cuomo is also examining disclosures by Bank of America related to Merrill's financial health, including the timing and adequacy of the disclosures, a source familiar with the situation told Reuters.
Cuomo did not outline specific crimes that may have been committed, only that his office sought testimony from the executives following the latest news on bonuses.
The legal action comes a day after Thain, who was ousted from Bank of America on January 22, appeared on television to defend the acquisition he partly orchestrated, and charged that Bank of America knew of Merrill's losses and bonuses before it closed.
"The fact that Merrill Lynch appears to have moved up the timetable to pay bonuses before its merger with Bank of America is troubling to say the least and warrants further investigation," Cuomo said in a statement.