Bank of America bows to pressure in Merrill Lynch bonuses row

Business News

Oct 13, 2009, 12:24 GMT

New York - US banking giant Bank of America, apparently bowing to the pressure of justice investigators, has agreed to provide the stock market watchdog SEC with until-now confidential documents related to the bank's mega-merger with Merrill Lynch. A Securities and Exchange Commission (SEC) spokesman in New York said the documents would also be made available to other investigators. The Wall Street Journal, citing insiders, had earlier broken news of the deal, amid allegations by the SEC and New York Attorney General Andrew Cuomo against the bank. At the core of the accusations are ones that Bank of America had wrongly informed shareholders about some 5.8 billion dollars in bonuses paid to Merrill Lynch managers as part of the merger. The bank denies the allegations and has otherwise left the matter with its lawyers. Now, the documents and e-mails from the bank's consultations with the lawyers are to be provided to investigators. During the financial crisis in the fall of 2008, Bank of America overstretched itself in taking over Merrill Lynch. In the aftermath, the bank had to be supported with some 45 billion dollars from the US federal government. Under pressure from shareholders, bank chairman Kenneth Lewis recently announced his resignation effective at the end of the year.

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Bank of America bows to pressure in Merrill Lynch bonuses row

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