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What Did Thain Say in Closed-Door Meeting?

POSTED: 01:00 PM ET, 02/26/2009 by Derek Kravitz

So what did John Thain, the embattled former chief executive of Merrill Lynch, say to New York authorities on his second trip to the witness stand?

In his first deposition a week ago, Thain refused to disclose information to the New York attorney general's office regarding individual bonus payments, citing advice from attorneys at Bank of America, which has merged with Merrill Lynch.

Thain's attorney, Andrew Levander, told prosecutors at the time that he didn't want to have Thain "sued by the company for saying that he's violating someone's privacy," according to a transcript of the proceedings (partial transcript courtesy of MSNBC). Bank of America says that the information is proprietary, The New York Times reports.

Thain also defended the payment of the bonuses, saying they were performance-based.

But under court order for his second appearance, Thain gave details about $3.6 billion in bonus payments that were paid out weeks before the New York investment firm merged with Bank of America on Jan. 1.

"He remained inside for more than three hours, answering all the investigators' questions about which employees got last-minute windfalls, according to a source familiar with the matter," the New York Daily News reported.

But New York Judge Bernard Fried ordered that "specific information about individuals' bonuses be kept confidential," The Wall Street Journal reported.

New York Attorney General Andrew Cuomo is leading the probe into the approval of the year-end bonuses at Merrill Lynch.

The bonuses were set Dec. 8. Two weeks after Merrill Lynch's merger, the firm reported a $15.3 billion fourth quarter loss, resulting in an unexpected $7 billion hit on Bank of America. Thain was soon fired by Bank of America chairman and chief executive Kenneth D. Lewis, who is scheduled to testify today.

By Derek Kravitz |  February 26, 2009; 1:00 PM ET
Previous: FEMA Grilled Over Unspent Aid, Unpacking the Pork in Omnibus Bill, More Mini-Madoffs | Next: The Case Against the Last 'Enemy Combatant'

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Why are the mutual funds and all the large investment firms who put all their clients investments at risk so silent about this guy? (and others like him)

Guys like Thain have really been stealing the cash/profits these companies have been earning. It started when Reagan came into office and has been accelerating at an alarming rate. Profits and earnings belong to the shareholders. These guys take everything.

Posted by: FranknErnest | February 26, 2009 9:24 PM

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