NEW YORK - New York Attorney General Andrew Cuomo said Monday that his office has requested information from the nation's largest banks and Wall Street firms on their compensation and bonus plans for fiscal year 2009.
On a conference call with reporters, Cuomo said his office sent letters Monday to eight banks and Wall Street firms that received bailout funds in 2008 under the U.S. government's Troubled Asset Relief Program, or TARP. The TARP money has since been repaid.
The attorney general said he's seeking details on the compensation paid by the banks for 2009, as well as information on how the compensation and bonus plans were determined and the scope and magnitude of lending by those firms.
Compensation and bonuses should "be based on incentives that build strong institutions, not built on incentives that bring the nation to knees economically and are based on short-term, fictional profits," Cuomo said.
The banks and Wall Street firms are Bank of America Corp., Bank of New York Mellon Corp., Citigroup Inc., Goldman Sachs Group Inc., J.P. Morgan Chase & Co., Morgan Stanley Inc., State Street Corp. and Wells Fargo Corp.
JPMorgan Chase, Goldman Sachs, Citigroup and Morgan Stanley declined comment Monday. A spokesman for Bank of New York Mellon didn't immediately have a comment.
A Wells Fargo spokeswoman said the bank is reviewing the letter. "We're accountable to and in compliance with all rules as they pertain to TARP companies," she said.
Wall Street firms and the nation's largest banks, which are facing criticism over potential record payouts while the U.S. economy continues to struggle, are expected to begin awarding 2009 bonuses to employees in the coming weeks. The financial institutions have recovered more quickly than the overall economy.
The Wall Street Journal reported Monday that banks and securities firms have told their employees to expect a higher percentage of their year-end bonuses to be composed of stock, rather than cash.
Cuomo said the banks would not be in the healthy financial position they're currently in without unprecedented assistance by the federal government.
"The taxpayer paid a terrible price for this economic recession," Cuomo said. "The average New Yorker, average American is still paying the price for this terrible economic debacle."
However, Cuomo wants to see the data from the banks before making a judgment on the 2009 compensation and bonus structure.
He said his role as a law enforcement official is to make sure there is no fraud and that compensation is properly disclosed to shareholders and the public.
That is why he feels he has the right to examine the banks' compensation plans despite the TARP money being repaid to the federal government, Cuomo said.