New York Attorney General Andrew Cuomo on Tuesday asked Bank of America Corp. to allow his office to question the institution's lawyers in its ongoing probe into last year's merger with Merrill Lynch. The request comes at a time of increased scrutiny into the involvement of the bank's lawyers in the decision by Merrill Lynch to issue $3.6 billion in bonus payments on the eve of the merger. In a letter, Cuomo's office said it cannot adequately explore whether to bring charges against Bank of America officers because of the bank's "indiscriminate invocation of the attorney-client privilege."
"We cannot simply accept Bank of America's officers' naked assertions that they sought and relied on advice of counsel in good faith, and that, therefore, they should not be charged," wrote David Markowitz, chief of the investor protection bureau. The request follows a decision by Southern District of New York Judge Jed S. Rakoff last month to block a $33 million settlement between Bank of America and the Securities and Exchange Commission over the bank's failure to disclose the bonus payments in its proxy. The bank has since said it relied entirely on advice from its lawyers at Wachtell Lipton Rosen & Katz and Merrill's lawyers at Shearman & Sterling.
Rakoff, in an Aug. 25 order, called that argument "puzzling," as it "would seem to be either a flat waiver of privilege or, if privilege is maintained, then entitled to no weight, since the statement cannot be tested." He requested both sides submit briefs by today on the issue. Bank of America and its lawyer, Lewis Liman at Cleary Gottlieb Steen & Hamilton, did not return requests for comment.
