Fed. Judge rejects SEC ,Bank of America deal

[gonzomax]

http://www.nytimes.com/2009/09/15/business/15bank.html?_r=2&hp
Fed. Judge Rakoff has rejected a deal made by the SEC and Bank of America to pay 33 million of stockholder money to settle the Bank of America bonus looting. Just before the bank failed , the execs raked 3.5 billion in bonuses. The SEC and the bank agreed to a 33 million dollar settlement. The SEC could claim they were being vigilant and the bank could cry about the zealous prosecution. It would absolve both of them from further responsibility. The judge decried that the stockholders would have to pay for a wrong they were not responsible for. Those who were responsible would be absolved. A trial would be revealing. The Bank does not want that.

[Whack-a-Mole]

What’s the debate? Whether or not the judge in this case made a correct ruling?

I am not sure since I am unaware of the complexities of necessary disclosure when such deals are brokered.

Do I think the SEC and BofA want to keep certain details under wraps? Yeah.

Are they required to tell us more about those details? I have no idea.

Has the SEC utterly failed to do its job? Yeah. Is this just a means for them to save face? Dunno but wouldn’t be surprised.

[Oakminster]

Bah…I thought the ruling might be important, but that link has nothing to do with football.

[Turek]

I love this quote from the judge:

“It is quite something else for the very management that is accused of having lied to its shareholders to determine how much of those victims’ money should be used to make the case against the management go away,” Judge Rakoff wrote.

[gonzomax]

@Whack-a-Mole

What’s the debate? Whether or not the judge in this case made a correct ruling?

I am not sure since I am unaware of the complexities of necessary disclosure when such deals are brokered.

Do I think the SEC and BofA want to keep certain details under wraps? Yeah.

Are they required to tell us more about those details? I have no idea.

Has the SEC utterly failed to do its job? Yeah. Is this just a means for them to save face? Dunno but wouldn’t be surprised.

I expected some to say the judge was overstepping. That a deal by the SEC was a good thing.
The financial pros are worse than before. Their compensation and bonuses have gone up. They have created new risky financial gambles. The lesson they learned is that they can make a ton with financial speculation and have the taxpayers bail them out. it is a win/win for them. A lose/lose for taxpayers.
The idea that too big to fail has meaning has gone by the wayside. The big 3 banks have swallowed up major institutions and have gotten bigger. We are setting ourselves up for a replay.

[Whack-a-Mole]

@gonzomax

I expected some to say the judge was overstepping. That a deal by the SEC was a good thing.
The financial pros are worse than before. Their compensation and bonuses have gone up. They have created new risky financial gambles. The lesson they learned is that they can make a ton with financial speculation and have the taxpayers bail them out. it is a win/win for them. A lose/lose for taxpayers.
The idea that too big to fail has meaning has gone by the wayside. The big 3 banks have swallowed up major institutions and have gotten bigger. We are setting ourselves up for a replay.

In general I agree.

But the judge has to apply the law as written. No idea if he did that or not (well, I would presume he is in the ballpark at the least so the question is if he stretched or not with that decision…I have no answer to that).

[Laudenum]

Link to the execs getting 3.5 billion in bonuses?

[gonzomax]

@Laudenum

Link to the execs getting 3.5 billion in bonuses?

Let's Go to Trial: Rakoff Slams BofA, SEC, Rejects Pact - WSJ Perhaps it was wrong. This says 5.8 billion.

[fuzzypickles]

I have nothing to add to this thread, except that I’m still chuckling over the name “Rakoff”.