The Securities and Exchange Commission has a curious concept of punishment. Bank of America is accused of misleading investors about $5.8 billion in bonuses paid to top executives at Merrill Lynch. The SEC responds with a penalty of a $33 million settlement.
What is wonderful about this “constructive conclusion” is that the Bank of America does not even have to admit any responsibility or guilt. Ultimately, the same investors who were misled will now effectively pay the penalty for being misled. Only in America.
For the full story, click here.
Buddha,
So if WS it is, then they have the power to disaffirm any prior agreements? Yes.
The stock becomes one in the other.
Just like Pepsi is reacquiring it bottling plants that it spun off 10 to 14 years ago. They will be under one umbrella.
AY,
Think “wholly owned subsidiary”.
It happens all the time.
From linked article: “The settlement with the SEC will remain subject to court approval.”
Let’s hope the court has more sense and integrety than to buy off on this.
Fines of major corporations should be in amounts that seriously affect their bottom line profits. when that happens is when the stockholders and Boards of Director’s rebel, otherwise it is just written off as a cost of doing business. this continues the guilty in their jobs. This is so obvious, but somehow is ignored by the MSM, punditry and Congress.
T.S.- re: SP’s Party
Two questions.
Do waders come with the gift basket?
Are Phil and Wendy invited?
Unfortunately, it won’t be Palin’s farewell for those in Texas. She’s coming to campaign for Rick Perry, drivin’ six white horses, no make that Four.
I meant to say–White Collar Crime Scene tape like the traditional crime scene police tape, only this one is in your face with the facts–it is a White Collar Crime Scene.
The SEC knew that Madoff was engaged in a ponzi scheme for at least 12 years, possibly many more while they did nothing. Civil suits are filed against the SEC, as they should be. I agree that civil suits against individual high ranking banksters must go forward. If these people don’t individually have to cough up their ill gotten gains they will not stop their crime wave. Citizens should take the wonderful yellow–White Collar Crime Scene and wrap it around the perimiter of the Fed, the WH, the SEC, and the Bank of America. That would send an embarrassing, very public message.
Right now, the president wants more power and less transparency than ever for the Fed and other financial “regulators”. Many economists expect another bubble and bubble burst as the banking industry uses their ill gotten gains (our money) to purchase other companies and devise some very flaky financial instruments. That’s our money and I for one, want it back right now at 12% interest.
Buddha, mespo,
Please clarify this. If a bank is taken over and its assets are transferred to another company, do they not cease doing business as the original entity?
Other than this being a bank, why the special treatment?
Smartest Woman Ever is here and in the Flesh. I have a successful Lobster Business on the Coast of Maine while I am restoring a the Family Farm. It was once used as a hospital during the American Revolutionary War. I am a member of the Daughters of the American Revolution and my family came over on the Original Mayflower. I used to be a genealogist in Utah but that is another story all in of itself.
I was once a very successful attorney that worked for the Insurance Company. I saved the company that I worked for over 1.9 billion dollars in denied claims. I was forced to make a choice between going to Medical School or continuing in a Job that was not very satisfying. The Corporate Greed and my own over came me. That is another story for another day.
I decided to go to Harvard where I was paired with a really great door who eventually became my partner in Maine. I am so glad that I found this site. I understand that we have a lot of really intelligent people on the blog. I cannot wait to contribute to this list as a regular.
I hope to see you all around.
SME,
DAR
Corporate death penalty.
I like everything about it.
Jericho,
Hear hear. SOX is yet another law passed by opportunistic politicians that has transparently failed to achieve its goals.
Ow yes, take that, Sarbanes-Oxley. What would we have done if we hadn’t had you guys and your mandated financial windowdressing…. maybe some actual fraud-prevention…
Funk’n S-OX sucks!
I recon Sarbanes and Oxley can pay the rest of that 18 billion in fines that BoA should’ve gotten… There’s wars to be funded, healthcare to be provided and investments to be made you bloody cheapskates!
Can we at least find out what the SEC formula is that explains the 33 Million number as sufficient punishment for stealing 5.8 BILLION during a financial crisis due, in large measure, to their own continued greedy mindset?
I agree with mespo (again) – corporate death penalty sounds more like it…
Maybe you to can go to Sarah’s party:
Party Invitation for the Final Farewell to Gov. Sarah Palin:
You are cordially invited to attend Gov. Sarah Palin’s Final Farewell. Please RSVP as we have a limited number of seats.
This will be attended by the Former Gov. of Alaska Sarah Palin, Barack Obama and Joe Biden, along with their wives. A moose hunting trip for your enjoyment. Three very well known politicians will be currying favors for your continued enjoyment who happen to be experts in their respective fields.
Dick Cheney will carry all of your guns, Ted Kennedy will drive each and everyone of you in a special limos back to your cabin each evening, and Bill Clinton will entertain your wives while you are out hunting for the day.
Please respond ASAP and thank you in advance.
The SEC has long since become a toothless tiger. Its description of this result as a “constructive conclusion” is a euphemism meaning “quick and dirty settlement.” No one has to do any real work and the lies and deception remain unexposed to public view. It is an agreement of, by and for the bankers. Barring radical reform, which will not happen, the preferable solution is expanding the availability of private actions to enforce the civil provisions of securities laws. I have yet to hear of a “cease and desist” order that meant anything.
“Regulators alleged that Bank of America failed to disclose plans to as much as $5.8 billion in bonuses for fiscal year 2008 in its proxy statement. Instead, Bank of America told shareholders that Merrill had agreed not to pay year-end performance bonuses, according to the SEC.”
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Where the hell do I sign up and get a Job? Year-End performance bonuses????? A failed company? Yes? And they still get 5.8 billion? And only have to pay 33 million in fines/penalty?
I keep getting these Eamils from a long lost relative in Africa. He only needs to get 4,500 in US Dollars and I will be rewarded 15,0000,000 for my active participation.
I will send further detail under separate cover.
Ok, you heard it here. I will sell you, right here, right now, my interest in this 15 million for say a mere 2.5 million Bank of America Money Order, now, today. Please respond. My Uncle and I need your help. Please?
“Ultimately, the same investors who were misled will now effectively pay the penalty for being misled. Only in America.”
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Well, it is the Bank of … America! Who says we don’t need a corporate death penalty?
This has to stop sometime. In my lifetime? Not a chance.
Hey where is my cut? A few million off of 5.8 surely would never evah be missed.
A Bank Bailout. Sounds like a Licenses to Steal. Did Bernie make anymore. Oops, or is that take any more?
In summary, quite simply bullshit.
So you idiots think a NEGOTIATED less than 1% net profit fine is appropriate punishment for a crime – FRAUD, hello? – of this magnitude instead of perhaps a stiffer fine or criminal charges against individuals corporate actors responsible for said fraud?
You really thought that was a good idea?
What I want to know is, among the decision makers in the government, who exactly holds your mortgage(s) and/or how much graft does one have to swill before that sounds even REMOTELY like a reasonable or just punishment for BoA?
If an single citizen committed a crime of this scale you’d put him in prison for 150 years.
It’s called insult to injury.
It’s called the appearance of impropriety.
It’s called injustice.