TJP
THE JETHRO PROJECT
O R G A N I Z I N G F O R E F F I C I E N T O U T P U T
- Bailing out Wall Street Elite with Taxpayers Funds
- Byron A. Ellis – August 04, 2009
What if you and friends could skim $5.8 billion dollars from an underperforming financial institution bailed out by taxpayers and only pay $33 million dollars as penalty. That is, the schemers only had to return .56 percent of the total loot.
The Security and Exchange Commission (SEC) on August 03, 2009 filed a lawsuit in New York against Bank of America for making false claims about the purchase of Merrill Lynch in proxy statements send to stockholders.
The SEC suit claims that Bank of America agreed to pay $5.8 billion dollars in Merrill Lynch bonuses despite contrary statements in the merger agreement and poor Merrill Lynch performance. Bank of America settled for $33 million dollars without admitting or denying the claim.
Both Merrill Lynch and Bank of America were bailed out by taxpayers’ dollars. If the average American citizen had skimmed of $5.8 billion dollars, the authorities would have required full restitution of the funds and, more likely than not, time in prison.
However, often regulators and the regulated are intertwined. Thus, restitution is not required.
The revolving door between government and private industry is not in the best interest of taxpayers.
Regulators upon completion of their term in government often return to the industry they were regulating. Therefore, it is not in their best interest to penalize away the unfair gains of their future partners or employers.
Bank of America bonus payoff to an underperforming Merrill Lynch highlights what is wrong will the Wall Street culture greed and the SEC unwillingness to ensure behavioral change.
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