The legal row surrounding last year’s purchase of Merrill Lynch by Bank of America took another turn last week when BoA, now the world’s biggest wealth manager by assets, said a New York probe of the takeover included unfounded claims about what the bank told investors, media reports said.

BoA was commenting on the investigation by NY Attorney General Andrew Cuomo into the controversial takeover. It is claimed that shareholders of Bank of America were not made fully aware of the scale of losses sustained by Merrill Lynch from the credit crunch in the period leading up to Merrill’s takeover.

The takeover, officially completed in January this year, created the world’s biggest wealth manager, although it remains a predominantly domestic US player, with UBS still the largest international wealth firm.

In one of the reports, by Bloomberg, it said that Mr Cuomo’s office has refused “to hear Bank of America and Merrill Lynch’s side of the story,” according to a letter sent to the attorney general from Lewis Liman, a New York attorney representing BoA.

The bank and some executives may face charges if the company doesn’t answer questions about the Merrill takeover, Mr Cuomo’s office said on 8 September in a letter to Mr Liman.

Shareholders approved the acquisition of Merrill on 5 December before the bank told them that losses would be higher than expected at New York-based Merrill Lynch and about the $3.6 billion in bonuses that the brokerage planned for employees.

The saga has raised questions about the extent to which senior bank executives in the US, UK and other parts of the world have been put under pressure by anxious governments to buy up weak banking businesses. In the UK, for example, the senior management of Lloyds TSB has been criticised for its purchase of debt-ridden HBOS, another UK lender.