The Bank of America (BAC) deal with the SEC to settle charges that it mislead investors about Merrill Lynch bonus payments in it proxy to approve the Merrill buyout is already being challenged in federal court. Now it appears that Andrew Cuomo, NY State Attorney General and Governor-in-waiting, may prosecute B of A.

Cuomo believes that lawyers for the bank have used attorney-client privilege to conceal some of the details of how the Merrill compensation was approved and by whom.

Cuomo is known for his aggressive prosecution of Wall St. much as his predecessor Eliot Spitzer. Cuomo’s move on B of A raises the issue of how many other state attorneys general will pile onto the Bank of America issue and whether the Justice Department may take a role as well.

There is no traffic control system for prosecution of large national banks. The number of suits filed against B of A by government attorneys and private shareholder interests could go into the dozens.That may not be an efficient way to handle what may be a scandal and the damages that could arise from it, but that is the American way nonetheless.

Douglas A. McIntyre