Accessibility links

NY State Probes 'Troubling' Bonuses


Prosecutors in New York want to talk to a former chief executive about why his investment firm rushed to pay out billions of dollars in bonuses.

New York state attorney general Andrew Cuomo calls the bonuses "troubling," and says he has issued a subpoena (a court order compelling testimony) to former Merrill Lynch executive John Thain.

Merrill Lynch paid the bonuses just days before it was taken over by Bank of America, and before announcing that it lost more than $15 billion over the last three months of 2008.

Bank of America says the fourth quarter loss forced it to ask the government for an extra $20 billion in bailout funds.

Thain claims Bank of America was involved in the size and timing of the payments.

Meanwhile, another bank that has gotten bailout money says it will not buy a new corporate jet. Citigroup scrapped the deal after U.S. lawmakers called the purchase wasteful.

The Associated Press reports that Citigroup will reduce the number of corporate jets in its current fleet from five to two.

Citigroup and Bank of America have gotten $45 billion each in government bailout money.

On Monday, Thain apologized for spending more than $1 million last year to renovate his office. In a memo to top Bank of America executives, he also volunteered to repay the money. Bank of America ousted Thain last week.

Some information for this report was provided by AFP, AP and Reuters


XS
SM
MD
LG