Former Merrill Lynch CEO John Thain is having a bad week. Having just been thrown off the board of Bank of America, which took Merrill Lynch over, he has received a subpoena from New York Attorney General Andrew Cuomo, who is looking into the billions of dollars in bonuses Merrill paid out as it was going under.
Since Bank of America received about $45 billion in bailout money just before the takeover, part of which was meant to ease the transition, BoA’s Chief Administrative Officer J. Steele Alphin has also been subpoenaed. “The fact that Merrill Lynch appears to have moved up the timetable to pay bonuses before its merger with Bank of America is troubling to say the least and warrants further investigation,” says the AG.
Though Thain defended the bonuses in a memo to colleagues, saying the bonus pool was lower than last year’s and “substantially less than the amount allowed under our merger agreement,” he clearly anticipated some sort of trouble: He recently put a $25,000 antique mahogany pedestal table up for sale at New York’s Winter Antiques Show.