Posts Tagged SEC
Massive Document Spill in Washington by Goldman Sachs
Posted by Lance Haley in Bailouts, Banking, Business and Money, Capitalism, Congress, Financial Crisis, Financial Terrorists, Government, House of Representatives, How and Why We Get Screwed, Show Them the $$$, Wall Street, financial industry on June 17th, 2010
WHERE’S WALDO?
Lost in the news cycle that has been inundated with stories regarding the Gulf oil spill, there was another giant “spill” that is overwhelming Congressional and SEC watchdogs.
Goldman Sachs is playing a classic legal game of “Where’s Waldo” with the Congressional Financial Crisis Inquiry Commission by first refusing requests for documents related to the commission’s inquiry, and then suddenly dumping (delivering) hundreds of millions of documents all at one time - a legal maneuver intended to obfuscate and hide the proverbial “smoking gun” documents that may be lurking beneath that mountain of paper.
You can be certain most of those documents that were delivered have nothing to do with the Congressional inquiry. Moreover, it will take years to scour through them to find the one’s that really matter - assuming they haven’t already been quietly deleted and/or shredded. By the time this thing is over – years from now - Goldman Sachs will have likely have made enough money to pay a “small fine”, and then buy the remaining portion of Congress that they and the rest of Corporate America don’t already own.
The message from Goldman Sachs: we worked diligently at providing the documentation that you have requested, and we can ensure you that we left nothing out (except maybe the sh!t that really matters). Oh, and good luck finding what you are looking for,
If this was the Pecora Commission, you could bet that Lloyd Blankfein and Company – you know, those guys on Wall Street that are doing “God’s work”- would be a lot more cooperative. Yet, Lloyd’s betting this dog ain’t got no teeth. I hate to admit it, but Blankfein is probably right.
So the question should not be ”Where’s Waldo”?
Americans should all be asking “Where’s Percora“?
SEC Diddles While Rome Burns
Posted by Lance Haley in Banking, Business and Money, Capitalism, Financial Crisis, Financial Terrorists, Government, How and Why We Get Screwed, Legal & Justice, Politics, Republicans, Senate, Show Them the $$$, U.S. District Courts, Wall Street, financial industry on April 26th, 2010
DID WATCHING PORN CAUSE THE FINANCIAL CRISIS?
This author was highly critical of the Securities and Exchange Commission’s (SEC) limp-dicked response to the Bank of America bailout scandal – here, here, here, and especially HERE - which was finally settled several months ago.
Federal Judge Jed Rakoff was incensed at the SEC’s handling of that case – and he publicly admonished SEC lawyers and regulators in a series of blistering critiques at their apparently cozy relationship with BoA executives and lawyers in trying to reach a settlement in that matter. Click on the link above to read the judges comments.
At least Judge Rakoff demonstrated that he has balls, and he vicariously told the SEC in no uncertain terms that they need to grow some testicles. I guess they got the message, in light of their recent case filed against Goldman Sachs.
And speaking of SEC testicles . . .
While Bernie Madoff was screwing his investors out of $50 Billion, and Goldman Sachs was screwing the rest of the world out of whatever money remained, SEC lawyers and high-ranking officials were watching porn stars screw one another.
And then we all got screwed – up the A$$!
Responding to the scandal, SEC spokesman John Nester released a statement that said, “each of the offending employees has been disciplined or is in the process of being disciplined.”
WAIT A MINUTE!?!
Doesn’t SEC Chairman Mary Shapiro realize that is exactly what these naughty boys want - punishment? Wonder if she used her bare hand, or a whip?
“Oooh, Mary baby . . . I’m a such bad boy. Pleezzze, spank me real hard. Pleeezzze?!?”
What a bunch of jack-offs – both literally and figuratively speaking.
On a final note: one of the SEC porn-watchers was a female staff accountant . An chance someone from the SEC can send me her email address and phone number? :)
P.S. To Senator Chuck Grassley and all of you other Republicans trying to use this as political fodder for undermining financial reform - this porn scandal happened on former SEC Chairman Christopher Cox’s watch. He was a Bush Republican appointee, confirmed by a Republican-controlled Senate!
Goldman Sachs’ “Fabulous Fab’s” Fabulous Fraud
Posted by Lance Haley in Bailouts, Banking, Business and Money, Capitalism, Economics, Financial Crisis, Show Them the $$$, Wealth Disparity & the Ultra Rich, financial industry on April 20th, 2010
“THERE IS A SUCKER BORN EVERY MINUTE”
- David Hannum [no, it was not P.T. Barnum]
Confidence is the single most important element of any fraud.
That is why fraud schemes are called confidence games or confidence tricks.
Ever heard of a “Three Card Monte“? It is the most classic con game run on the streets. This is a card game that initially inspires confidence in the “mark” – the person who is the target of the fraud - by showing them how easy it is to make money by making the correct bet. Both the dealer and another person pretending to play the game conspire together in order to make the “mark” feel confident that he will win game. In other words, the game is already rigged before the “mark” even plays.
Moreover, it preys on several elemental human flaws: greed and ego. That is why it works. We always think we can do better than other people – that we are smarter than them; and, once we start we cannot stand to lose money, so we keep upping the bet to make up for our rising losses. That’s why Vegas makes so much money. They rely on our greed and ego to lead us to the tables. As does Goldman Sachs (GS) down on Wall Street.
Except in Goldman Sachs’ case – just like a “3 Card Monte” - they create a fraud. At least that’s what the SEC is now alleging. And the allegations are not looking too good on paper. Nor in the national business media, as numerous business journalists - here, here and here - weigh in on the matter, gleefully watching as GS twists in the firestorm of their own creation that appears to be developing.
The best response came from Dylan Ratigan, former business journalist for CNBC and current host of The Dylan Ratigan Show on MSNBC. After GS posted its press release authored by company spokesman Lucas van Praag, Ratigan fired-off a serious of questions for Goldman Sachs to answer. If you want a preview of the cross-examination in this case, this will be as good a template as you will see.
What’s even worse are the emails that the young Goldman executive who was setting up these deals was sending when the parties were deep in the midst of putting this together; deals designed to benefit his company – resulting in a very large bonus for him – and virtually ensuring that many of Goldman’s own clients were going to be left holding the bag, while one client profited handsomely . Fabrice Tourre, the self-proclaimed “Fabulous Fab”, sent the following message to someone:
“Only potential survivor, the fabulous Fab standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstrousities!!!”
So Goldman is circling the wagons, and denying any wrong-doing. However, what Goldman is conveniently omitting – not ironically, given their business practices at issue - is that they failed to disclose to clients investing on one side of the “confidence game”, that Goldman was actively working for another client on the other side of the confidence game whose interests were diametrically opposed to the first parties’. And they said nothing, while making huge fees off both clients. It’s a classic conflict of interest scenario – which is tantamount to fraud if they breached a duty to disclose that fact – and the fact was a material issue central to the transaction.
Moreover, Goldman Sachs’ claim that they “lost money” on this deal may be tenuous, at best. The fact that the value of the investment may have dropped over time does not account for the fact that GS had purchased huge insurance policies to mitigate those losses, as well as buying “shorts” in order to make money as the value dropped – which could actually result in a hefty profit.
Nevertheless, Goldman Sachs insinuates that it will never admit they have done anything wrong; that “it will be a cold day in Hell. After all, it was Goldman Sachs’ CEO, Lloyd Blankfein, who was quoted in The Times :
“I’M DOING GOD’S WORK.”
Frankly, Lloyd, I think it was Satan’s work.
And maybe Hell will freeze over . . .
UPDATE: Here is a guide to the Goldman Sachs issue from U.S. News and World Report.
Federal Judge Jed S. Rakoff: A Lonely Soldier in the War Against Wall Street’s Financial Terrorists?
Posted by Lance Haley in Bailouts, Banking, Business and Money, Capitalism, Financial Crisis, Financial Terrorists, Government, How and Why We Get Screwed, Legal & Justice, U.S. District Courts, Wall Street, financial industry on February 26th, 2010
THE ONE MAN WITH BIG ENOUGH BALLS TO TAKE ON WALL STREET
Calling the Security and Exchange Commission’s legal settlement with Bank of America (BoA) “half-baked justice at best“, U.S. District Court Judge Jed S. Rakoff reluctantly signed-off on the agreement between the two parties on Monday, writing in his order that “[t]his court, while shaking its head, grants the S.E.C.’s motion and approves the proposed consent judgment.”
Judge Rakoff is a true American Maverick, and a champion for American public shareholders.
I am not talking about some half-baked Sarah “Pretender” Palin maverick. This man is the real deal – and you can take that to the bank. Just don’t deposit it with Bank of America. Because when it comes to the truth, BoA – like the rest of the Wall Street Financial Terrorists – has proven beyond a shadow of a doubt that it simply cannot be trusted.
On several occasions this author has commented, here and here regarding the ongoing feud between that limp-dicked, impotent icon of American investor protection - the U.S. Securities and Exchange Commission (S.E.C.) - and Judge Rakoff, over this settlement of Bank of America’s failure to disclose critical information in it’s SEC stock disclosure filings regarding the Merrill Lynch merger.
BoA shareholders were entitled to know the scale of Merrill Lynch’s liabilities, as well as the size of the bonuses that were to be paid to Merrill’s top executives, before approving the merger. However, none of that was disclosed in the filing, and BoA is blaming it’s former top legal counsel for it’s ostensibly innocent error in judgment.
During one of those previous court hearings, the Judge voiced his utter contempt for claims by both BoA and the SEC that none of the BoA executives were culpable for the material non-disclosure. He was further incensed over the irony that it would be BoA’s shareholders who would ultimately be the ones who were financially punished because the bank would have to pay the fines out of it’s profits, thus further diminishing the value of the shareholders stock. The judge lamented this fact, having preferred that BoA’s top executives pay the fines. Nonetheless, he begrudgingly approved the settlement.
Judge Rakoff is also currently presiding over a pending civil matter against J.P. Morgan Chase. In the order he issued on January 28, 2010 in that case, the Judge wrote that “JP Morgan thereby violated, at a minimum, the covenant of good faith and fair dealing” when it obviously attempted to structure a deal with one client in an effort to position itself so as to benefit another client in the same industry – a clear conflict of interest. The judge noted that “such an end run, if not a down right sham , is not permissable . . .”, insinuating J.P. Morgan committed fraud.
Felix Salmon, a well respected business writer and blogger, wrote a good analysis of Morgan’s corrupt business dealings in the matter titled How J.P. Morgan treats its clients: scandalously and in bad faith. As another writer so eloquently put it, “[w]e have entered a period of grotesque decadence in the financial and business dealings of those who brought us the great financial calamities.”
In the final irony in the BoA case, both the S.E.C. and Bank of America expressed just how pleased they were with the settlement. I’ll bet they were. Now the question becomes, when will the S.E.C. lawyers who worked on this case retire from “government service”, and take jobs with BoA or one of the other of the Wall Street Terrorist Organizations ? Anyone want to take a bet that this doesn’t happen?
I welcome any and all takers. And I will be laughing all the way to the bank when I win that bet. Just hope you were smart enough to hedge that wager Goldman Sachs-style by betting that I won’t be depositing my winnings in BoA. Because I won’t. Judge Rakoff would be disgusted with me, and rightfully so.
Thank Goodness We Have At Least One Man With Balls On Our Side!
Now the rest of you government weenies and politicians - grow some freakin’ testicles.
Bank of America’s CEO Ken Lewis Will Play the “But We Made Lots of Money” Card in his Criminal Case?
Posted by Lance Haley in Bailouts, Banking, Business and Money, Capitalism, Crime & Punishment, Economics, Financial Crisis, Financial Terrorists, How and Why We Get Screwed, Legal & Justice, Politics, Show Them the $$$, Wall Street, financial industry on February 5th, 2010
There is plenty of blame to go around in Washington and New York for the financial meltdown and subsequent bailout debacle. These Wall Street financial terrorists – Wizards of Mass Derivatives (WMD’s) – with the assistance of their Washington lackeys, Paulson, Geithner, Bernanke, et al., robbed the national treasury to pay the piper for their incompetence and then left us standing alone on the dance floor. And do not even go there about the fact that they “paid the money back” in their defense.
That dog won’t hunt!
Since our federal prosecutors would not grow some testicles and bring criminal indictments against any of these guys – with President Obama’s U.S. Attorney General Eric Holder leading the “Charge of the Lightweight Brigade” – New York AG Andrew Cuomo has demonstrated that he has big enough balls to make at least a couple of them pay for screwing us.
Ken Lewis, former CEO of Bank of America (BoA), was charged with committing fraud yesterday in a New York state court for his failure to divulge to BoA shareholders the extent of Merrill’s losses, as well as an undisclosed agreement to pay former Lynch executives massive bonuses, and that he intentionally misled the government by threatening to scuttle the deal in order to get another $20 billion in bailouts from the Treasury.
Sources from Lewis’ criminal defense team have indicated that they may subpoena Henry Paulson, former Bush Treasury Secretary, as well as Ben Bernanke, Chairman of the FederalReserve, to testify at Lewis’ trial in an attempt to persuade the jury that Lewis did not mislead the government about the severity of BoA’s financial condition subsequent to the banks merger with Merrill Lynch. They will further argue that the bank made money after the deal, and repaid all of the TARP money it received from the federal government, so the government and shareholders were not harmed – and in fact benefited from his actions (or inactions, as the case may be).
What is so unnerving is the audacity of Lewis to claim that “they made the company lot’s of money” as a defense. Worse yet, the Wall Street Journal comes to their defense, claming among other things that “TARP was a gilded straitjacket that every bank, including BofA, wanted to flee as quickly as possible”.
Really? Let’ review this twisted and misleading logic.
We made some really, really bad bets, and the financial system will collapse if you do not give us unprecedented bailouts to fix the system. Of course we understand that the government is giving us this money to restore the necessary liquidity - a continuous flow of money to keep the economy running – so that businesses can continue to borrow money, and keep people working. Now we are not going to making any promises to that effect, but we will do what we think is right for the financial system . Also, we accept that we have to purchase/merge with some of the other failed financial institutions as a condition of getting our asses saved. But we will not be obligated to deal honestly, nor follow financial regulations, in these business dealings, and if we see an opportunity to squeeze more money out of this mess, we will. Moreover, we will probably accept this unreasonable condition that you may limit our pay structure while we are under the obligation to pay the government back, but once we retire that debt to the government, you have to get off our ass and we can transact business however we like.
How dare them now have the arrogance to say they made money as a result of some uncanny business acumen. As I have stated previously in this blog – give me $15 or $20 Billion, I can make a Billion or so investing in some very conservative financial instruments over the course of a year, pay you back, give myself an obscene bonus – and then tell you to go FxxK youself!!
Moreover, REMEMBER THIS: they did NOT have to accept the money. Furthermore, they were supposed to lend the money, not hold it in reserve while waiting for the markets to turn North, and then invest it in order to make a quick killing so they could line their fat pockets, all the while leaving many Americans and businesses hung out to swing in the cold, harsh winds of their utter malfeasance. How utterly disingenuous of both Wall Street and the Wall Street Journal.
This author has previously commented several times about the criminal malfeasance of BoA in this blog – in this entry and in this entry - and questioned the refusal of federal prosecutors to bring charges in this matter. A Federal District Court Judge was appalled by BoA’s behavior, and was obviously disgusted that the U.S. government – specifically the Securities and Exchange Commission (SEC) – was not doing more. If we have to wait for a New York Attorney General to act, this begs the question as to how deep in bed people at the top of this government are with Wall Street?
President Obama – you took money from Wall Street, and now you say you want them to be accountable? Prove it!
P.S. This same picture was used in a previous entry – it is the finest representative illustration of the BoA bailout I have seen on the Internet. Illustration by graphic artist David Dees of DeesIllustration.com
Bank Of America’s Criminal Deception of U.S. Treasury on Bailout
Posted by Lance Haley in Bailouts, Business and Money, Capitalism, Congress, Economics, Financial Crisis, Government, How and Why We Get Screwed, Politics, Show Them the $$$, Uncategorized, United States, Wall Street, Wealth Disparity & the Ultra Rich on November 16th, 2009
Illustration from Deesillustration.com
The Chairman of the House Oversight and Government Reform Committee, Congressman Edopholus Towns (D -Brooklyn, N.Y.) is leading the investigation into whether executives for Bank of America made misrepresentations based on false claims to the government in December 2008 regarding it’s agreed takeover of Merrill Lynch in order to receive significant taxpayer bailouts.
The committee has acquired thousands of documents that included handwritten notes from lawyers representing BoA in it’s takeover of Merrill Lynch that indicated the bank’s claim of a “Material Adverse Change” in circumstances regarding the takeover was unfounded. Nonetheless, it appears executives for the bank used this legal clause as a veiled threat to withdraw from the takeover in order to to persuade the U.S. Treasury and then Secretary Hank Paulson to give them more bailout money. If true, this would be tantamount to extortion – which is a criminal offense – let alone fraudulent misrepresentation.
BofA spokesman Larry Di Rita said that BoA’s actions “were based on our desire to make the best decision for our shareholders . . .”
This self-serving statement is utterly laughable in light of U.S. District Court Judge Jed A. Rakoff’s take on BoA’s behavior in the suit brought by the SEC against the bank. BoA screwed it’s shareholders by intentionally withholding information regarding the Merrill Lynch bonuses and then blaming their lawyers. Now we learn the high likelihood that these same executives ignored the advice of their lawyers and wilfully mislead the U.S. Treasury when they looked to the government for financial bailouts. Why BoA is allowed to perpetuate this ongoing charade defies logic and reason.
These men are financial terrorists!
When will they be made to answer for their crimes against the American people?
Greed is Good!
Posted by Lance Haley in Uncategorized on October 22nd, 2009
![Greed is Good [1]](http://screwedus.com/wp-content/uploads/2009/10/Greed-is-Good-1-222x300.jpg "Greed is Good [1]")
Remember the mantra ”Greed is Good” ?
Thank you Brian Griffiths for resurrecting the ghost of Gordon Gecko (Michael Douglas) from the movie Wallstreet.
Mr. Griffiths is an international advisor for Goldman Sachs (at least he is as of this moment – tomorrow is another story). He spoke at an economic conference held in London yesterday where the topic of discussion was . . . oh this is really good . . .
“What is the place of morality in the marketplace?”
From there, it gets even more surreal.
Mr. Griffiths defended this weeks report coming out of Goldman Sachs that record compensation packages of $16.7 billion were being paid out to the company’s employees for the first nine months of 2009, an increase of 46 percent from a year earlier. If you think that obscene information just made your blood pressure go through the proverbial ceiling, his comment justifying these compensation figures will absolutely cause you to ”blow a gasket”.
“We have to tolerate the inequality as a way to achieve greater prosperity and opportunity for all.”
Yes! That is how he rationalized this unconscionable decision from a financial institution that the U.S. taxpayer just bailed out.
But Mr. Griffiths is not done. He concedes that “[i]t was the failed moral compass of bankers which was primarily responsible for why we had this crisis. The question is: what can we do in the culture of institutions to make them behave in a more socially responsible way?”
Ahhhhhhh . . . Give them more money???? Yea, that’s the ticket! That should stop this ever-escalating climb into the stratosphere of economic insanity. Right?
But he ends on a very positive note, telling the audience that “To whom much is given much is expected,” he said. “There is a sense that if you make money you are expected to give.”
Yes. That’s what they will do. Engage in an ignoble and altruistic charitable act in order to wash away the sins of avarice, greed, and excess so that one can tolerate the inequality of his lifestyle compared to those less fortunate so as to inspire prosperity and opportunity in them, that they might become like him and do the same for others in a long cycle of never-ending prosperity and go on tolerating this inequitable way of living so that even more will prosper, all in the hopes that someday we will all be equally filthy rich and working ever harder each day to make more money to show the opportunities that await others who aspire to our level of greed and avarice.
I like it. I think I can handle the job. Let me check . . . no pulse, no heart, ice in my veins and in my glass of 20 year old scotch, no conscience, not a moral fiber in my body. Please hand me a cigar. When can I start?
Mean-spirited to Take Away Bank of America CEO’s Salary?
Posted by Lance Haley in Bailouts, Business and Money, Capitalism, Economics, Financial Crisis, Government, How and Why We Get Screwed, Uncategorized, Wall Street on October 20th, 2009
![banker [umbrella]](http://screwedus.com/wp-content/uploads/2009/10/banker-umbrella-183x300.jpg "banker [umbrella]")
Do you know the definition of a banker? It is a person who will lend you an umbrella on a sunny day, and then ask for it back when the rain starts falling.
Ken Lewis is retiring as CEO of Bank of America after overseeing the rapid implosion of one of the largest financial institutions in the country.
As the global financial collapse was getting started last year, he decided to purchase both Country Wide Mortgage and Merrill Lynch so that he could really become a player in the global financial casino. When BoA teetered on the verge of bankruptcy as a result of “biting off more than it could chew”, the government bailed his bank out, while Lewis engineered the payout of huge financial bonuses for former Merrill Lynch employees behind every one’s back.
Later, when it was discovered that BoA had failed to disclose this fact in SEC filings, the SEC brought civil charges against the bank, wherein an agreement that was reached that would have resulted in the bank paying a record $33 Million fine – which meant shareholders, not the executives, would ultimately be the one’s who would suffer the consequences. The federal judge overseeing that matter angrily denied to sign off on the settlement, openly stating that was incensed over the fact that no one was taking responsibility and that the government had not brought criminal charges (the civil case is now set for trial in February 2010).
In the wake of all of this, BoA shareholders then demanded that Lewis voluntarily resign. Furthermore, as a result of this unprecedented business debacle, Kenneth Feinberg, the government pay czar overseeing executive compensation of financial institutions that received TARP (government bailout) funds, recommended that Lewis relinquish his 2009 salary and bonus. Rather than fight the issue, Lewis has agreed to take no compensation for 2009, and pay back the $1 million dollars in salary that he has already received for the year.
OK, so you are saying to yourself, “Finally, one of these guys will not get paid for screwing up!”
Well, not everyone is in agreement with you. Greg Donaldson, chairman of Donaldson Capital Management in Evansville, Ind., responded to the news of Lewis’ not being paid his salary for 2009, by saying, “[i]t’s punitive and it’s mean-spirited, and it’s an attitude that will send shivers through every person who does business with the government or is regulated by the government.”
After a comment like Mr. Donaldson’s, I just hope bankers never have the audacity to come asking for an umbrella from the U.S. taxpayers one more time. It will be a cold day in Hell when we ever quietly acquiesce to our government bailing them out again.
Congress Ignores the Financial Trevails of Small Business
Posted by Lance Haley in Bailouts, Business and Money, Capitalism, Congress, Economics, Financial Crisis, Government, How and Why We Get Screwed, Politics, Show Them the $$$, Uncategorized, Wall Street, Wealth Disparity & the Ultra Rich on October 1st, 2009
As was noted in yesterday’s blog, Wall Street Boys collect fat bonuses for moving money around the world at the speed of light, creating nothing of real value, while still continuing to intentionally deceive the government and shareholders about their business transactions with no substantive consequences. Even Federal District Court Judge Jed A. Rakoff obviously wondered why the SEC was not investigating and prosecuting apparent criminally fraudulent behavior? A $33 million fine is meaningless for Bank of America – especially if it’s executives who committed the fraud are not going to pay for it, either financially or by criminal punishment (as usual, the shareholders, bank customers, and tax payers are all going to “take it in the shorts” on this one).
Now today it is reported that the major financial credit rating agencies – Standard and Poor, Moody’s, etc. – are still intentionally inflating the ratings of the securities of the Wall Street firms who pay them fees. Anyone familiar with the term “Conflict of Interest”? While testifying yesterday before the House Committee on Oversight and Government Reform, former Moody’s managing director, Eric Kolchinsky, asserted that his firm was criminally deceiving investors. This was one of the principle underlying causes of last years financial meltdown, and yet they are they are doing it again?
MEMO TO: Attorney General Eric Holder . . .
Where is the deterrence?!?!?
Meanwhile, honest, hardworking small business people try to fund retirement plans for themselves and their employees through the trusting hands of financial advisers, insurance companies, and former IRS agents. Thanks to Congress, and even the IRS in some cases, that trust was sorely misplaced by a number of small business owners. The mere fact that a business or individual may have inadvertantly failed to file one form, or even IF the existence of the retirement plan was reported in a business tax return, but not a personal return - any violation triggers enormous penalties and fines. Some of these honest business people even relied upon IRS “determination letters” that tacitly give initial approval to their plans.
Guess What? WRONG! According to a complex set of tax rules and formulas established by Congress, if the IRS later determines that the plan was not in compliance, you are subject to penalties and fines for any number of “violations”. One would think it reasonable that if you’re intentions are honest, that your reliance on expertise is reasonably placed, and there is obviously no intention to commit fraud, you will not be driven to bankruptcy. You would be WRONG AGAIN!
What is most galling is the fact that the fines and penalties are not even commensurate with the violations. It’s like giving the Death Penalty for speeding on the highway. Congress takes the view that Wall Street is TBTF (To Big To Fail) even if they fraudulently screw things up, but your small business can be allowed to go bankrupt if you make an honest mistake.
The powerful Wall Street firms and financial institutions, their executive management, their rating agencies, and the minions who do their bidding (lawyers, lobbyists and politicians) suffer insignificant consequences for their criminally fraudulent behavior, primarily by pouring millions of dollars into the political campaigns of the most powerful Democrats and Republicans sitting on Congressional Committees overseeing Banking, Finance and Business Regulation.
Meanwhile small businesses, which generate approximately 50% of the business income in this country, are treated like step-children.
Bank of America Execs Still Duckin’ and Dodging Responsibility
Posted by Lance Haley in Bailouts, Business and Money, Capitalism, Economics, Financial Crisis, How and Why We Get Screwed, Legal & Justice, Wall Street, Wealth Disparity & the Ultra Rich on September 30th, 2009
![Shawshank Redemption Prison yard [my lawyer fucked me]](http://screwedus.com/wp-content/uploads/2009/09/Shawshank-Redemption-Prison-yard-my-lawyer-fucked-me-300x211.jpg "Shawshank Redemption Prison yard [my lawyer fucked me]")
“What’ch you in here for?”
“Armed Robbery.”
“Guilty?”
“Nope. My lawyer fucked me.”
- from The Shawshank Redemption
Buried in the news this past week was a compelling story that personifies the degree to which the men and women of Wall Street and the financial world continue to evade responsibility for the personal destruction of trillions of dollars worth of shareholders wealth, all the while continuing to collect millions of dollars in compensation as they simultaneously took bailouts from American taxpayers, and avoid prosecution for their criminally fraudulent behavior.
“There is no individual liability in this case; there is no evidence that any individual is culpable.”
- Bank of America’s statement in a federal court filing
A U.S. District Court Judge thinks otherwise.
When Bank of America (BoA) was in the process of acquiring Merrill Lynch after the financial meltdown late last year, it intentionally failed to disclose to it’s shareholders that millions of dollars in executive bonuses where being paid to Merrill Lynch executives. When BoA tried to settle it’s litigation with the Securities and Exchange Commission (SEC) for $33 million this week over it’s corporate malfeasance, guess who they blamed?
Their lawyers!
The federal judge overseeing the case viewed all of this with a healthy degree of skepticism, and questioned why the SEC was NOT prosecuting even one of the BoA executives for it’s failure to disclose this bonus payout arrangement to it’s shareholders, intimating that someone is responsible for leaving that important piece of information out of an SEC document regarding financial disclosures. BoA executives say they authorized the filing of the disclosure upon the advice of staff and outside counsel, and that it was the lawyers that prepared the document. The judge rejected the settlement and decided that all BoA had to do was waive attorney-client privilege – - presumably so that an inquiry could be made to determine who advised BoA to file the document, what did the executives know (or should have known).
Now BoA is defiantly refusing to waive attorney-client privilege. Why?
Sounds like their lawyers not only screwed BoA, they all now likely screwed themselves and one another.
Oh damn, that pesky law of unintended consequences even applies to “really smart people”.