Page 17 - Bank of America E Case Study

However, weeks before
the deal went through,

Merrill had given out
$3.6 billion in bonuses

ahead of schedule with

four top executives

alone receiving $121
million dollars. According to New York Attorney General

Andrew Cuomo:

“One disturbing question that must be

answered is whether Merrill Lynch and Bank of

America timed the bonuses in such a way as to

force taxpayers to pay for them through the

deal funding.” (10)

It emerged that as Merrill was posting its losses BofA was

pressured by Federal Reserve chairman and Treasury
Secretary to conceal the financial predicament of Merrill

until after its shareholders had approved the acquisition.
A swath of civil law fraud suits followed resulting in

numerous fines.

Meanwhile, in August, 2009, Bank of America agreed to

pay a $33 million fine, without admission or denial of

charges, to the SEC over the non-disclosure of an

agreement to pay up to $5.8 billion of bonuses at Merrill.

The court rejected the settlement but judge Jed S. Rakoff,
agreed an increased fine of $150 million. He wrote,