What will New York AG Andrew Cuomo turn up in his quest to find wrongdoing in the Merrill Lynch bonus-gate controversy? Cuomo is now investigating whether the early payments of bonuses to Merrill traders encouraged them "to mark down their portfolios--which would make it easier for them to post gains fresh out of the gate in January."

Recall that Merrill Lynch paid $3.6 billion in bonuses in December, ahead of schedule and just a few days before the deal with Bank of America closed. Merrill executives told the FT that such write downs did occur but were not large and were not designed to boost losses. Looks like the investigation is heating up. 

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