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WSJ UPDATE:NY AG Subpoenas Bank of America Directors -Source

(Updates to show Bank of America declined to comment and says Cuomo plans to eventually subpoena entire board.)

By Liz Rappaport

Of THE WALL STREET JOURNAL

New York Attorney General Andrew Cuomo subpoenaed five Bank of America (BAC) board members to testify under oath as part of his investigation into the bank's purchase of Merrill Lynch & Co., according to a person familiar with the investigation.

(This story and related background material will be available on The Wall Street Journal Web site, WSJ.com.)

Cuomo is seeking to discover whether Bank of America directors withheld information from shareholders. A Bank of America spokesman declined to comment.

Based on its investigation thus far, Cuomo suspects that the board was kept in the loop on mounting losses at Merrill Lynch in early December, before the shareholder vote on Dec. 5 to approve the merger between the two banks, according to a person familiar with the matter.

Cuomo's investigators will ask directors how much they knew about Merrill's losses and the role they played in decisions about disclosing information to shareholders. That includes whether the board sought advice from counsel about disclosure issues, said the person. They are also likely to ask board members about pressure by government officials on disclosure issues, as well as whether government officials threatened to remove management and the board if Bank of America didn't proceed with the deal.

Cuomo's office plans to eventually subpoena all 15 board members present in December, said the person familiar with the matter. The board's 16th member at the time, Chief Executive Officer Kenneth Lewis, has already testified.

  (END) Dow Jones Newswires
  09-16-091418ET
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