Did Thain take on NEW toxic mortgages?

Did John Thain let Merrill wade deeper into mortgage-related losses? According to the New York Times:

After Merrill appeared to be safely in Bank of America’s arms, Merrill’s traders began buying risky mortgage assets, thinking that the market had bottomed out, according to two people familiar with the firm’s trading. Merrill also began to run up losses on equity derivatives and other instruments, they said.

By the end of 2008, Merrill had lost an additional $5 billion in the markets, marking the first time since Mr. Thain’s arrival that the firm’s losses had moved beyond the mortgage investments that predated his tenure.

But the WSJ says that Thomas Montag, the head of global sales and trading brought in by Thain, was just promoted. The paper said both Montag and Thain have maintained that the recent losses stemmed largely from old positions that Merrill inherited from previous management.

1-26-09 Update: In a response to the controversy, Thain said most of the losses were incurred on "almost entirely legacy positions" and that Merrill was completely transparent about the losses.