New York prosecutors are questioning whether the early payment of bonuses at Merrill Lynch last year gave the bank’s traders an incentive to mark downt he value of their trading positions at the end of December, reports The Financial Times.
New York Attorney General Andrew M. Cuomo has been investigating whether the payouts were sanctioned by Bank of America. Cuomo’s office is considering whether the early payments encouraged Merrill traders to mark down their portfolios—making it easier for them to post gains in January.
Three former Merrill Lynch executives told FT that traders made such changes to their books in late December.
A court filing is expected today, where Cuomo will respond to Bank of America’s argument that the disclosure of the individual bonus payments to Merrill employees in December would be an invasion of privacy.
Cuomo’s office is expected to argue that prosecutors need the details of specific bonus payments to determine whether important information was kept from Bank of America shareholders and the federal government who gave $45 billion in taxpayer funds to the bank.