As Bank of America CEO Ken Lewis prepares for what looks likely to be an interesting shareholder meeting Wednesday (some say that it wil be a referendum on Lewis's future), former Merrill Lynch CEO John Thain chose this week to come out and stir the pot again over those $3.6bn in bonuses paid to the firm's staff last December.

In what The Wall Street Journal has described as 'an effort to restore his sullied reputation', Thain claims that Bank of America has lied about what it knew about the payment of the bonuses. 'Getting fired is one thing, but nobody has the right to say things that they know aren't true'.

At the center of this affair is the claim that Thain brought forward the payment of the Merrill bonuses (from January to December), as he wished to get them in staff bank accounts before the firm's $15bn fourth-quarter loss was announced to the public a couple of weeks later. BofA has always insisted that it was kept in the dark on the timing of the bonus payouts, but Thain told The Journal that: 'The suggestion Bank of America was not heavily involved in this process, and that I alone made these decisions, is simply not true'.

One former Merrill staffer told Here Is The City: 'Bank of America was very hands-on from day-one of this merger. Anyone who knows how they operate would find it inconceivable that the bank didn't know what was being planned'. Bank of America, however, is sticking to its story, saying that Merrill was a public company in its own right, and that it did not acquire control until early January.

Lewis came under fire again last week, after it was revealed by New York State Attorney General Andrew Cuomo that he claimed he was told by the Fed and US Treasury to keep quiet about Merrill's Q4 losses ahead of the BofA shareholder vote to approve the Merrill deal (something both the Fed and Treasury have denied). Critics say that it was Lewis's clear duty to disclose the losses ahead of the vote. Shareholder lawsuits are now expected.

In the meantime, The Wall Street Journal reports that US regulators are said to have told both Bank of America and Citi that they may require additional capital following the completion of the so-called bank 'stress-tests'. Executives at both banks are said to have objected to the preliminary findings, and are thought to have the next few days to convince regulators that their sums are wrong. In the event that the regulators stick to their guns, the banks will have 6 months to raise more capital, or the government will do it for them.

Finally, Financial News reports that more London-based Bank of America Merrill Lynch staff are likely to lose their jobs these week, as the firm continues to wield the axe in fixed income, currencies and commodities.

Please use the 'E-Mail' button immediately under the article title to send this item to a friend.

Press here to comment on this story >>

Today in Life: The Economy According to Recruiters >>

TODAY

• Top Firms Finally Hit By H1N1 Threat
• 'It's Not As If They Paid Great Bonuses In The First Place!'
• Top Firm Caught Out By Rogue Traders

THIS WEEK

• Bank Of America CEO Poll - Incredible Result
• Speculation Mounts About Goldman's Bonus Plans
• Bankers Will Have The Last Laugh On Pay