This is taking on the tone of a scandal. Recall that Merrill Lynch paid out $4 billion in bonuses before the deal with Bank of America formally closed, though it knew a big loss was in the making. Bank of America has suggested that Merrill Lynch made the move on its own, and there was "no legal basis" for it to do anything. But now the Wall Street Journal has reported that there was a formal bonus arrangement agreed to by both sides. Which might make it hard for Bank of America to stick to its story.

The agreement called for a discretionary bonus pool at the combined company that should not exceed $5.8 billion in cash and stock. Ex-Merrill Lynch CEO John Thain, fired by Bank of America CEO Ken Lewis, seems to be on a campaign to prove that Bank of America was fully informed of his intention to pay the bonuses. 

For more:
- here's a Reuters article

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Merrill Lynch news from FierceFinance