When the history of this financial crisis is written, this story story will be a contender as a standout example of its kind. It is one of the slickest, under the table, sleight of hand deals ever.
Picture this. The financial markets are falling apart right and left. Lehman, Bear Stearns and Merrill are going down for the count. In the midst of this confusion Bank of America Corp (NYSE: BAC) is in the process of taking over Merrill Lynch. Merrill executives and employees are in a state of panic but at the last moment they regain their composure and have the audacity (word is too mild) to pay themselves $3.6 billion in bonuses just days before the BofA takeover.
The question under investigation by the SEC is whether of not B of A knew about the bonuses but did not tell its stockholders in advance. Federal securities law prohibits institutions from "omitting material facts." Congress, led by Dennis Kucinick and New York Attorney General Andrew Cuomo, are spearheading the investigation.
Listen to this whopper. It seems that while BofA is bleeding $275 billion dollars in losses, Ken Lewis, then head of BofA was receiving a $20 million dollar bonus.
In response, Ms Schapiro or the SEC wrote that if there has been an omission of material facts that she will carry out enforcement responsibilities with "vigor and vigilance."
So much for the saga of Merrill bonuses. What are your thoughts on this matter?
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Reader Comments (Page 1 of 1)
4-14-2009 @ 5:50PM
clikdawg said...
Git a rope.
4-14-2009 @ 7:13PM
Iridium said...
ha hah hah ha a hah. People actually thought we should bail out the banks. That letting them go under would cause an economic collapse.
It was the biggest con of all time. 1000 years from now they will be talking about how a few corprations were able to steal billions of dollars bringing about the collapse of the post industrial age. The turn of the 21st century will be remembered as the age when personal liberty died. That is if they allow for freedom 1000 years from now after the collapse of liberty.
4-14-2009 @ 7:50PM
CHRIS said...
LET'S START WITH SHAME ON THEM .. I HAVE BEEN HAVING MAJOR PROBLEMS WITH GETTING A MORTGAGE REFI FOR DEBT CONSOLIDATION ,, IT'S NOW GOING ON FOUR MONTHES OF EXCUSE AFTER EXCUSE . MY CREDIT SCORE IS 738 AND I HAVE NEVER BEEN LATE NOR MISSED A PAYMENT . I AM IN THE PROCESS OF CHANGING JOBS . BOTH ME AND MY PARENTS HAVE PRESENTED TO THE BANK ALL NECESSARY DOC'S . THIS LOAN WILL BE A SECURED LOAN - HOUSE/PROPERTY/BUILDINGS AS COLATORAL .. I HAVE TWO C C ACCOUNTS THROUGH BANK OF AMERICA ALONG WITH MY MORTGAGE .. SO IT'S NOT LIKE I'M OPENING UP ANY NEW ACCOUNTS . NOW B O A SENT ME A LETTER STATING THAT MY RATES ARE GOING UP ON MY C C ACCOUNTS ... I THINK I'M GETTING A LITTLE PISSED RIGHT NOW ..I HAVE BEEN PATIENT , VERY PATIENT .. REPRESENTATIVES FROM B O A KEEP SAYING THEY'RE BACKLOGGED WITH REFI'S .. I THINK IT WASN'T THIS BAD THREE MONTHES AGO .. MINE SHOULD HAVE BEEN FINALIZED BY NOW .. SO WHY SHOULD ANY BANK KEEP SAYING THAT THEY'LL HELP - CUSTOMERS TO SAVE MONEY AND TO INVEST WITH THEM ,, WOW , WHAT WOULD HAPPEN IF I HELD BACK ON MY MORTGAGE PAYMENTS UNTIL THEY FINALIZED ??? THAT IS WHY I WONDER WHY THIS BANK DOESN'T CATER TO IT'S OLD LONGTIME CUSTOMERS FIRST ?? THANKS , CHRIS SHANNON
4-14-2009 @ 9:46PM
joe1 said...
I hope all these guys go to jail.
Joe from California
4-16-2009 @ 8:29PM
PT Dao said...
The wheel of justice, if there's such a thing anymore, is truly slow in this country. All these scumbags on the Street and in the banks need to be hung--yesterday! We the mobs with the stones are ready. Dust off that rusty Guillotine. In a hurry!
4-15-2009 @ 6:26AM
Dao Futhu said...
The wheel of justice, if there's such a thing anymore, is truly slow in this country. All these scumbags and weasels on the Street and in the banks need to be hung--yesterday! Every single one of them. We the mobs with the stones and the rocks are ready. Dust off that rusty Guillotine. In a hurry! Before they all flee en masse down the block under the disguise of different outfits.
4-19-2009 @ 5:26PM
ronuharriet said...
While it is understandable that the banks should be bailed out to stimulate the economy and get credit loans flowing again, -------it is not understandable that anyone in management of a failing bank, to the degree that it requires a government bail out should receive a bonus of any size.
Instead of a bonus, they should be fired and blackballed from entering the banking business again in any form.
While it may or may not be possible to retreive the bonus amount back from the amount of the stimulus which they received, there are other things that can be done through legislation.
#1 Remove all due on sale clauses.
#2 Make all loans assumable
#3 incourage seller loans while boycotting those banks which have abused the tax payers bail out money.
#4. Go back, if necessary to the "All Inclusive First Trust Deed Notes".
4-27-2009 @ 6:47PM
Paul said...
I think Ken Lewis is just as guilty as Bernie Ebbers. Ken knew better than to not disclose to shareholders.
See Below what he did:
Ex-WorldCom CEO Ebbers guilty
Faces long prison sentence after being convicted on all nine counts in accounting fraud.
March 15, 2005: 4:26 PM EST
By Krysten Crawford, CNN/Money staff writer
Ex-WorldCom CEO Bernard Ebbers arriving at federal court in New York before Tuesday's verdict.
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Read the documents
• U.S. v Ebbers (PDF)
• Ebbers separation agreement
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Former WorldCom CEO convicted on all counts in accounting fraud. CNN's Susan Lisovicz reports.
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NEW YORK (CNN/Money) - Bernard Ebbers, the former CEO of WorldCom, was found guilty Tuesday for his role in the huge accounting scandal that led to the largest bankruptcy in U.S. history.
A federal jury in New York, on its eighth day of deliberations, convicted Ebbers on all nine counts that he helped mastermind an $11 billion accounting fraud at WorldCom, now known as MCI.
Ebbers, 63, had been charged with one count of conspiracy, one count of securities fraud and seven counts of filing false statements with securities regulators. He faces up to 85 years in prison, but sentencing guidelines are expected to result in a shorter term that legal experts say could nonetheless put Ebbers behind bars for the rest of his life.