Wed Feb 11, 2009 9:11am EST
By Joseph A. Giannone
NEW YORK (Reuters) - Merrill Lynch secretly accelerated bonus payments and gave at least $1 million to each of nearly 700 employees as the brokerage was amassing billions of dollars of losses, New York Attorney General Andrew Cuomo said in a letter to Rep. Barney Frank.
Cuomo's letter comes as Frank's House of Representatives Financial Services Committee on Wednesday gets set to grill executives from eight banks that received $125 billion from the Treasury last fall.
Cuomo, who began questioning Wall Street banks about their 2008 bonus plans in October, said in the letter to Frank that Merrill may have taken steps to pay lavish bonuses so that taxpayers would foot the bill.
"It appears that instead of disclosing their bonus plans in a transparent way as requested by my office, Merrill Lynch secretly moved up the planned date to allocate bonuses and then richly rewarded their failed executives," Cuomo wrote.
"These payments and their curious timing raise serious questions as to whether the Merrill Lynch and Bank of America boards of directors were derelict in their duties and violated their fiduciary obligations," Cuomo said.
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