Ever since AIG’s bonus shenanigans exploded onto the national scene last month, Merrill Lynch’s own outrageous payouts have kind of gotten short shrift. We’ve felt this was unfair to the Thundering Herd, since at an around $3.6 billion, its bonuses dwarfed those of AIG. Granted, its role in bringing down the financial system may not have been quite as central as that of AIG’s financial products unit, but it’s not like Merrill, which needed rescuing last fall by Bank of America, was squeaky clean. Where’s the respect?
But luckily, the Merrill bonuses are back. The SEC is looking at whether Bank of America broke the law by not disclosing, in filings last year, the fact that it was planning to pay those bonuses, reports the Washington Post.
B of A announced in September 2008 that it was buying Merrill Lynch. But it didn’t tell shareholders, who had yet to sign off on the deal, that it planned to make the multi-billion dollar payouts to Merrill employees. In the end, the bonuses were paid in December, just before Merrill formally came under the control of B of A.
In a letter to Rep. Dennis J. Kucinich, who himself has been probing the bonuses, SEC chair Mary Schapiro wrote:
Where the SEC believes that there has been an omission of material facts necessary in order to make the statements made not misleading, we will carry out our enforcement responsibilities with vigor and vigilance. We are carefully reviewing the Bank of America disclosure at this time.
An SEC spokesman cautioned the Post that Schapiro’s letter does not confirm “the existence or non-existence of an enforcement investigation.”
New York Attorney General Andrew Cuomo has also been looking into whether investors were misled over the bonuses.