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
Clearing houses warn Esma margin rules will stifle innovation
Changes in model confidence levels could still trip supervisory threshold even after relaxation in final RTS
BlackRock, Citadel Securities, Nasdaq mull tokenised equities’ impact on regulations
An SEC panel recently debated the ramifications of a future with tokenised equities
CCPs trade blows over EU’s new open access push
Cboe Clear wants more interoperability; Euronext says ‘not with us’
Who is Selig? CFTC pick is smart and social, but some say too green
Colleagues praise crypto smarts and collegial style, but views on prediction markets and funding trouble Senate
EU single portal faces battle to unify cyber incident reporting
Digital omnibus package accused of lacking ambition to truly streamline notification requirements
Basel Committee members ‘buying time’ before fixing FRTB mess
Despite inconsistencies today, regulators maintain they want to align global regime eventually
How Basel III endgame will reshape banks’ business mix
B3E will affect portfolio focus and client strategy, says capital risk strategist
Derivatives industry blasts EU reporting framework
Complaints about duplicate and ambiguous trade reporting requirements aired at Esma’s Data Day