New York prosecutors are investigating whether the early payment of bonuses at Merrill Lynch last year gave the bank’s traders an incentive to mark down the value of their trading positions in the last days of December, according to people familiar with the probe.

The New York attorney-general, Andrew Cuomo, began his investigation after the Financial Times disclosed that Merrill had paid $3.6bn in year-end bonuses during December, only days before the closing of its sale to Bank of America.