“This is half-baked justice at best,” US District Judge Jed Rakoff wrote in an opinion yesterday afternoon. The SEC sued Bank of America for lying to their shareholders over the company having been forced to buy Merrill Lynch.
In a move that smacks of some backroom deal you and I will never be privy to, the SEC sued for only $150 million. That’s 2.4% of the $3.6 billion in 11th-hour bonuses Merrill execs awarded themselves days before they merged with BofA. It’s an even smaller fraction of the $4.4 billion bonus pool Bank of America henchmen enjoyed last year.
Half-baked justice? Yeah. On a pure cost-benefit model, it’s more like incentive for execs from BoA and Merrill and the Treasury and whoever else to go out rape, pillage, lie and steal all over again. Contrary to our Unofficial, Unauthorized Darwin Awards, these companies and execs climb the food chain when they concoct corrupt insider schemes.
Good luck restoring confidence in the financial system while they’re still lounging in the corner office…rather than in a cell next to some fat guy with “Mom” tattooed on his arm. Oy.
Even more for the “Wall Street Ire” file this morning: It has now been confirmed that Goldman Sachs bet against the very subprime assets it sold to AIG, which ultimately caused the insurer’s collapse. Here’s the breakdown, per a Bloomberg report and documents recently released from the House Committee on Oversight and Government Reform:
Of course, all this has been suspected for so long that it was assumed to be true…but now it’s in stone. How this isn’t securities fraud, we don’t know… It’s like selling a teenager napalm (that you made in your backyard) and buying fire insurance on his dad’s house.
Addison Wiggin is the executive publisher of Agora Financial, LLC, a fiercely independent economic forecasting and financial research firm. He's the creator and editorial director of Agora Financial's daily 5 Min. Forecast and editorial director of The Daily Reckoning. Wiggin is the founder of Agora Entertainment, executive producer and co-writer of I.O.U.S.A., which was nominated for the Grand Jury Prize at the 2008 Sundance Film Festival, the 2009 Critics Choice Award for Best Documentary Feature, and was also shortlisted for a 2009 Academy Award. He is the author of the companion book of the film I.O.U.S.A.and his second edition of The Demise of the Dollar, and Why it's Even Better for Your Investments was just fully revised and updated. Wiggin is a three-time New York Times best-selling author whose work has been recognized by The New York Times Magazine, The Economist, Worth, The New York Times, The Washington Post as well as major network news programs. He also co-authored international bestsellers Financial Reckoning Day and Empire of Debt with Bill Bonner.
Don’t worry, Harry will preach that this will behoove the markets.
Pingback: Ἀναθεώρησις τῆς ἰστορίας τῶν τελευταίων ἐτῶν | ΕΝΩΣΗ ΕΛΛΗΝΩΝ ΔΙΑ ΔΙΚΤΥΟΥ ΚΟΙΝΟΤΗΤΩΝ ΚΑΙ ΕΚΚΛΗΣΙΩΝ ΤΩΝ ΠΟΛΙΤΩΝ()
Pingback: Cheats for Poptropica()
Pingback: Hay Day Hacks()
For 73 months running, the Fed has lashed the money markets to the gross financial anomaly of zero interest rates. Never before in the history of the world has any central bank dared to hand out so much free money for so long. David Stockman has the scathing report… and how it will splatter into a world of hurt…
Dr. Ron Paul, via his Ron Paul Institute for Peace and Prosperity, has written a full-blown indictment of the Fed and their 2% inflation target. It’s below, complete with 14 lessons we’d be wise to heed. It’s lengthier than our normal feature, but well worth your time...
2014 was a hard year for commodities, but there were some surprising opportunities, for in-the-know resource investors like you. Today, our friend Frank Holmes discusses some of the winners and losers and why we saw the market take the shape that it did. But more urgently for you, he also points out an unlikely winner…
Sony's recent hacking incident with The Interview is only part of the reason I believe the cybersecurity industry is on the verge of a breakout year. Target and Home Depot also suffered embarrassing incidents recently. The demand is enormous--companies just can't ignore the dangers of data breaches any more.
Bank insolvency doesn't have to end in money printing. Using a simple, 500 year-old law, Nathan Lewis explains how to break the cycle...