New York Attorney General Andrew Cuomo's office asked a state judge Monday to order John Thain, Merrill Lynch & Co. Inc.'s former chief executive, to give more details about billions of dollars in bonuses handed out before Bank of America Corp. acquired it last year.
Mr. Cuomo's office filed a motion in the New York State Supreme Court in Manhattan to force Mr. Thain to answer additional questions about how the bonus amounts were determined.
At a deposition last week, Mr. Thain refused to answer questions about the "determination and amount of individual bonus awards for all but five employees at Merrill Lynch," according to the filing by David A. Markowitz, the chief of the office's Investor Protection Bureau.
"Mr. Thain claimed that his refusal to answer these relevant questions was based on an instruction from Bank of America; however, Bank of America has no authority to issue such an instruction," the filing said.
The office is investigating disclosures related to more than $3.6 billion of bonus payments made shortly before B of A closed its deal for Merrill.
In addition to Mr. Thain, the office has subpoenaed Kenneth Lewis, B of A's chairman and CEO; J. Steele Alphin, the Charlotte company's chief administrative officer; and Andrea Smith, who was involved in setting compensation for several top Merrill executives.
During testimony last week, Mr. Thain said the five individuals he was permitted to discuss were among the executives that did not receive a bonus.
In court documents, Mr. Cuomo's office called the willingness to discuss those individuals "a meaningless gesture."
The five were Mr. Thain; Greg Fleming, Merrill Lynch's former president; Nelson Chai, the company's former chief financial officer; Rosemary Berkery, its former general counsel; and Bob McCann, Merrill's former head of its wealth management business.
Mr. Thain's attorney told Mr. Cuomo's office that the refusal to answer certain questions was based on an instruction from B of A's counsel, and that Mr. Thain testified he had not entered any agreement with B of A that might preclude his ability to answer such questions, according to the filing.
"The questions Mr. Thain refused to answer go to the heart of the Attorney General's Office's investigation," Mr. Markowitz said in the filing.
This month Mr. Cuomo said Merrill awarded $3.6 billion of bonuses to more than 39,000 employees shortly before the sale was finalized, including 700 who received more than $1 million apiece.
Mr. Thain was forced out of the top job at Merrill last month after it posted a fourth-quarter loss of $15.3 billion.
He has said the size of the bonus pool, "its composition (cash and stock mix), and the timing of the payments for both the cash and stock were all determined together with Bank of America" and approved by Merrill's compensation committee and board.
In its filing, Mr. Cuomo's office said the bonus investigation is "of particular significance" because B of A has received about $45 billion from the federal government, including $10 billion that Merrill would have been slated to receive if the sale had not closed.
