US bank executives 'subpoenaed'

It is a year since Bank of America came to Merrill Lynch's rescue

Five current and former directors of Bank of America have been subpoenaed by the office of New York Attorney General Andrew Cuomo, according to sources.

They are likely to be asked how much they knew of Merrill Lynch's problems and bonuses when they agreed to buy it.

Bank of America saved Merrill Lynch from collapse a year ago.

Earlier this week, a US federal judge ruled the bank would have to go to trial to settle allegations it misled shareholders about bonus payments.

District Judge Jed Rakoff rejected the $33m (£20m) settlement between Bank of America and its regulator, the Securities and Exchange Commission.

Bail-out funds

Merrill executives were paid $3.6bn before the deal was closed, despite the bank's $27.6bn losses for 2008.

Bank of America has neither admitted nor denied the allegations of the Securities and Exchange Commission (SEC).

It was one of the biggest recipients of bail-out funds from the US taxpayer in 2008, needing capital injections at the height of the financial crisis.

It has been reported that Mr Cuomo's office is planning to file charges against executives at Bank of America for withholding information from shareholders.