Merrill Lynch’s John Thain accuses BoA chief of lying

A very nasty public slanging match has started in New York on the eve of Bank of America's annual shareholders' meeting. It concerns the former chief executive of Merrill Lynch, John Thain, who was fired in January after Bank of America took control of his ailing investment bank. In a fiery interview with the Wall Street Journal, Thain has accused the men who bought his company of lying.

The point of contention is the hugely controversial payout of staff bonuses at Merrill Lynch, totalling an amazing $3.62bn, in the last quarter of 2008, before the purchase by Bank of America was complete.

Following a public outcry at news of the bonus payout, Bank of America stated publicly that the decision to hand out those bonuses in December rather than January when they are normally paid was Thain's sole responsibility.

But Thain, who until now has not commented on the matter, has told the WSJ that this is a lie and that he and Bank of America chief executive Kenneth Lewis agreed in writing that the bonuses could be paid before Bank of America's acquisition of Merrill closed. "The suggestion Bank of America was not heavily involved in this process, and that I alone made these decisions, is simply not true," Thain said. "Getting fired is one thing," he said. "But nobody has the right to say things that they know aren't true."
 
Bank of America has declined to comment on Thain’s remarks to the newspaper. The company "stands by statements it has made," spokesman Robert Stickler wrote in an email. "These issues have been previously extensively reported by the news media. We believe it is time to move on. We wish Mr Thain well in his future endeavors."

Wednesday's annual meeting should be interesting, with shareholders certain to bring the matter up when they question the bank’s directors about the acquisition of Merrill Lynch with emergency government help.
 
Until Bank of America gave him the boot in January, Thain had led a glittering career in the banking industry. He spent three years spent as head of Goldman Sachs and four years in charge of the New York Stock Exchange before taking over Merrill Lynch in December 2007.

Now, at 53, he is unemployed, though he admits he still wears a suit most days of the week despite not having an office to go to. "Right now, John is radioactive," says John Reed, the former chairman and CEO of Citi. "I would guess any company with a public board would have a hard time hiring him. Bank of America made him the poster boy for bad practices." ·