Looting alleged at Merrill Lynch

This is Andrew Como's latest assertion about the defunct bank, according to the New York Times (the link comes via Naked Capitalism). The looting in question took the form of bonus payments taken by Merrill Lynch employees just before the Bank of America acquired the troubled investment bank. And, as Yves Smith of Naked Capitalism emphasizes, the Times story also reports the Como allegation that Merrill Lynch employees cooked their books to gain these bonuses:

"It appears that some of these losses may have been booked by Merrill employees who marked down their portfolios only after their 2008 bonuses were set," the attorney general wrote in the filing. "Despite the gargantuan unexpected losses, Merrill did not reconsider its bonus awards" and Bank of America did not request or demand that Merrill reduce its bonus pool, he wrote.

A second Times story indicates that the Obama administration will adopt an aggressive and, perhaps, coordinated strategy in this area. Momentum for a legal approach to the crisis and its sources has been building since last fall (see this, this and this).

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