The row over bankers' bonuses has intensified after subpoenas were issued to several top Merrill Lynch executives over payments for last year.The executives, each paid more than $10m (£7m) in cash and stock, include Andrea Orcel, Merrill's top investment banker who is based in London, Thomas Montag, the head of global sales and trading, and Peter Kraus, the bank's former head of strategy, the Wall Street Journal reported.
Andrew Cuomo, New York state's attorney general, is investigating whether the bonuses violated securities laws.
Merrill paid out billions of dollars in bonuses for 2008 – despite running up losses of $15.8bn in its fourth quarter and a loss of $27.6bn for the whole year.
The firm is now owned by Bank of America, which saved Merrill from collapse by agreeing to buy it. Bank of America has blamed John Thain, Merrill's former chief executive, for rushing through the bonus payments just before the investment bank's takeover by Bank of America was completed in September.
Thain has already been subpoenaed by Cuomo. Cuomo wants to know why $4bn of bonuses to Merrill staff were paid in December – earlier than the usual compensation round in January.
The bonuses are one of the reasons why Thain had to resign. He also apologized for spending $1.2m refurbishing Merrill's executive offices with antiques.
Meanwhile, the US liquidators of Lehman Brothers have asked Barclays to explain what happened to an estimated $3.3bn earmarked for bonuses and other liabilities that the British bank received when it acquired part of the collapsed Wall Street firm last year, the Financial Times reported today.
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