Merrill Lynch & Co. disclosed late Tuesday its 2008 losses were about $533 million more than previously reported, according to a regulatory filing.
Merrill Lynch & Co. disclosed late Tuesday its 2008 losses were about $533 million more than previously reported, according to a regulatory filing.
Merrill revised its full-year loss to $27.61 billion from the $27.08 billion it reported last month, according to a filing with the Securities and Exchange Commission.
The New York-based investment bank has been among the hardest hit by the ongoing credit crisis. On Jan. 1, New York-based Merrill completed its sale to Charlotte, N.C.-based Bank of America Corp.
The updated filing shows Merrill reported a negative revenue net of interest expense of $12.59 billion for the year, compared with a previous estimate of negative $11.72 billion. The change is related mostly to principal transactions, causing Merrill to record a revised negative revenue of $27.23 billion, compared with a previous estimate of negative $26.18 billion.
In the filing, independent accounting firm Deloitte & Touche LLP noted Merrill erroneously recorded transactions tied to hedging. Deloitte and Touche said errors in recording hedging transactions demonstrated Merrill did not maintain effective control over its financial reporting for 2008.
Because of Merrill's ongoing struggles, Bank of America received an additional $20 billion from the government in January that it said it needed to help offset the losses it was absorbing from the Merrill acquisition. The government also promised to cover the bulk of losses on more than $100 billion in risky assets. The additional support was provided to Bank of America as its chief executive, Ken Lewis, showed trepidation about completing the deal to acquire Merrill.
Bank of America had already received $25 billion in government funds as part of a $700 billion bank investment program.
Merrill has also come under fire in recent weeks for year-end bonuses it paid to its employees in December just weeks before it was sold to Bank of America and ahead of the initial report of its 2008 losses. New York Attorney General Andrew Cuomo is investigating the timing of the bonuses and whether Merrill provided adequate disclosures about them and its projected losses.
Merrill's former CEO, John Thain, who was ousted from his position at the combined company last month, has testified twice in the past week before Cuomo's office about the bonuses. Bank of America's Lewis has also been subpoenaed to discuss what he knew of the bonuses, which were doled out before Bank of America took control of Merrill.
The government helped orchestrate the acquisition of Merrill by Bank of America over the same weekend in September that another investment bank, Lehman Brothers, went under, setting off the most intense period of the financial crisis.
