New York's Cuomo goes after Wall Street bonuses

NY State Attorney General Andrew Cuomo wants to see detailed account of the bonuses banks and investment houses are planning to pay for 2008, and he wants the figures before the checks are passed out. According to The Wall Street Journal, "He is looking for information from banks that have received or are expected to receive funds under the Treasury Department's Troubled Asset Relief Program."

It is not clear why Cuomo has anything to say about a federal matter, but that has not stopped him from investigating Wall Street matters before. Among the firms being asked to supply data are Morgan Stanley (NYSE: MS) and Goldman Sachs (NYSE: GS).

Cuomo's case may turn on whether banks committed fraud by planning to make large bonus payments, but it is not quite clear why rewarding people for their work could be considered criminal. There may be an ethical problem with paying huge sums for work that, in some cases, lost Wall Street firms money. There may also be a shareholder issue about whether people holding stock in these companies think boards should pass out such a large portion of revenue to senior employees.

It has taken forever to curb huge payouts on Wall Street. There are now enough people looking into it that perhaps compensation will become more sane. Once the credit crisis is over, things can go back to the way they were.

Douglas A. McIntyre is an editor at 24/7 Wall St.