This past week New York state officials filed a lawsuit against Bank of America executives regarding the Merrill Lynch bailout. The bailout occurred in January 2009. Bank of America was allotted $45 billion in government funds after merging with Merrill Lynch. Merrill Lynch used money from the original bank bailout funds to pay executive bonuses knowing that the institution had sustained fiscal losses during that year. Despite this, Bank of America merged with Merrill Lynch and used their extra government funding to cover the losses incurrred due to payment of the bonuses.
In order to prevent further misuse of government funding the federal government needs to better allocate and oversee the distribution of bailout money. This would entail conducting more in depth inquiries regarding payments of bonuses to bank executives, monitoring how the bailout money is spent by banks, and restricting the use of funds. Fiscal transactions should be made more transparent as well. The public is now aware of the current scandal due largely to the media coverage of the filed lawsuit. Citizens, however, deserve protection against such manipulation of monetary funding which can be achieved through pre-emptive government regulation.
Please see the attached BBC article for further information regarding the Bank of America and Merrill Lynch lawsuit:
http://news.bbc.co.uk/2/hi/business/8499281.stm
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