New York Attorney General Subpoenas John Thain Over Executive Bonuses
“I’m sorry.” That’s what recently fired former Merrill Lynch CEO John Thain had to say about his spending $1.2 million on an office decorating project while his company was drowning in debt and slashing thousands of jobs.
In a Jan. 27 interview on CNBC, Thain said he “regretted” using corporate funds on such items as a $37,000 commode and two area rugs totaling $131,000 and, if he had it to do over again, he would pay for the expenses out of his own pocket.
Unfortunately for Thain, there won’t be any do-overs in his future. On Jan. 27, New York Attorney General Andrew Cuomo issued subpoenas to both Thain and Bank of America’s chief administrative officer, J. Steele Alphin, as part of an investigation into the $4.1 million worth of bonus checks that Merrill Lynch paid executives just days before its sale to Bank of America.
The attorney general’s investigation into the Merrill bonuses reportedly will focus on the timing of the payouts. The payouts were made as Merrill Lynch prepared to announce a $15 billion fourth-quarter loss and Bank of America was seeking a second financial bailout from the federal government.
When asked about Merrill Lynch’s huge losses during the CNBC interview, Thain blamed his former predecessor, Stanley O’Neal.
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