The board members are expected to be questioned about what they knew regarding the mounting losses and bonus payments at Merrill ahead of the deal's completion on Jan. 1, said the person, who asked for anonymity because the investigation is ongoing. It wasn't immediately clear which directors received the subpoenas.
New York Attorney General Andrew Cuomo's office is also likely to ask the board members about any threats made by federal regulators to remove the board if the deal wasn't completed, as BofA executives have said.
The subpoenas come as Cuomo's office is preparing to file fraud charges in the coming weeks against several high-ranking executives at the Charlotte, N.C.-based bank over its acquisition of the troubled investment bank.
Bank of America agreed to acquire Merrill Lynch in a hurried deal almost exactly one year ago at the height of the financial crisis, just as Lehman Brothers was about to file for bankruptcy. It was later revealed that Merrill, with the knowledge of Bank of America executives, paid Merrill employees $3.6 billion in bonuses just before the deal closed at the beginning of this year.
"I'm not sure there are many judges in the country who would have signed off on such a deal, especially with big bonuses creeping back onto Wall Street," said CBS News legal analyst Andrew Cohen.
"Judges get to sign off on these sorts of deals, and clearly this judge felt the SEC settled for less than it should have," said Cohen. "So now the Commission has to go back to BofA and ask for more - and BofA has to calculate how much more of a settlement is going to do the trick."
Cohen said the rejection now puts enormous pressure on the SEC to push forward its case against Bank of America and former Merrill Lynch executives, "to renegotiate better terms with the Bank or to simply walk away, and I can't imagine there is much political support for that last alternative."
BofA had settled a separate investigation last month into disclosures about the Merrill bonuses with the Securities and Exchange Commission, but on Monday a federal judge threw out that $33 million settlement saying it "cannot remotely be called fair" and needlessly penalized BofA shareholders. The judge ordered the case to go to trial Feb. 1.
Merrill wound up paying the bonuses for 2008 despite losing $27.6 billion that year, a record for the firm. Those losses affected the bottom line at Bank of America, one of the largest recipients of U.S. government bailout funds.