According to the Financial Times, New York prosecutors started the investigating process connecting with the early payment of bonuses at Merrill Lynch last year to learn whether it was to stimulate the markdown of the value of their trading positions in the last days of December.

Andrew Cuomo, New York's Attorney General, has been investigating whether billions paid in executive bonuses at Merrill Lynch ahead of its takeover by Bank of America were sanctioned by the Charlotte, North Carolina-based bank. Today Cuomo's office consider that the early payments encouraged Merrill traders to mark down their portfolios making it easier for them to post gains fresh out of the gate in January.

As three former executives stated for the Financial Times, traders made such changes to their books in late December. They told that the markdowns were not large and that positions are marked down in order to make later results look better.

In a Wednesday court Cuomo will respond to BofA's argument that the disclosure of the individual Merrill employees’ bonuses in December would be an invasion of privacy. Cuomo's office is also expected to argue that prosecutors need the specifics of the bonus payments in order to determine whether important information was concealed from BofA’s shareholders.