Bank of America deploys 'Ice cream defence' against Cuomo
NEW YORK - Bank of America's lawyers have sought the 'ice cream defence' to rebuff a subpoena filed by New York attorney-general Andrew Cuomo to force them to disclose the bonus structure of Merrill Lynch, which Bank of America bought on January 1. Cuomo has called for the release of pay data for the top 200 employees. Bank of America says this data is akin to a trade secret and is calling on the defence used by Carvel's ice cream to prevent it divulging its secret recipe in a 1979 New York lawsuit.
Cuomo's lawyers countered by saying compensation structures have never been trade secrets and are common currency between rival investment banks and recruitment companies.
Cuomo has alleged Merrill Lynch misled Congress about the timing of the bonuses, paid out only days before the finalisation of the Bank of America buyout first agreed in September 2008. Merrill paid out $4 billion in early year-end bonuses in December 2008, contributing to buyer Bank of America's decision to seek $20 billion of US Treasury funding in January 2009 (see OpRisk & Compliance, February 2009). US political and regulatory ire was further stoked by revelations that former Merrill chief executive officer John Thain had spent over $1 million to refurbish his office.
Cuomo has already said he will also subpoena state bailout recipient insurer American International Group after it announced $165 million in fresh executive bonuses. AIG has received a total of $180 billion in state aid since it first teetered on the brink of collapse in 2008.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
US blows the floors off Basel III
Barr criticises “downward deviations” in US rule; Bowman rejects “blind adherence” to global standards
Basel III endgame – a timeline
A review of Risk.net’s coverage of the US implementation saga
Leaked EU plans offer extra temporary relief for FRTB models
Risk factors would need only two observations to be modellable. Do changes foreshadow US Basel III?
Iosco chief talks cyber, AI and clearing
Buenaventura discusses Iosco’s role in aiding market resilience and cross-border co-operation
US regulators bid to save FRTB IMA, but it’s no small task
Even if industry wish-list is granted, a 2028 start date might be too soon for model adoption
Hopes rise for cross-product netting under SA-CCR
Banks want rule change in Basel III endgame to lower capital costs of clearing UST repos
Long way round: EU banks lament credit spread saga
EBA ditches some of banks’ preferred qualitative reasonings – and shortcuts – for CSRBB exclusion
Iosco chief sees no need for CCPs to hold more capital
CCPs have shown resilience in volatile times without extra skin-in-the-game, says Buenaventura