The BofA Merrill Settlement, In Perspective

In this post-bailout age, many American taxpayers may be wondering to themselves, "Just how badly do the big Wall street banks have our nuts in a sling?" As it turns out, pretty badly. In fact, the sling in which our nuts are contained is itself lovingly crocheted from yarn, fashioned from our nuts. And you'll see a fine example of this in this week's "Review" section from the March 1, 2010 edition of Barron's magazine.

ITEM: "BofA Settlement Approved"

A federal judge, who had rejected an earlier settlement, approved a much larger $150 million deal between Bank of America and the SEC over the bank's disclosures before it acquired Merrill Lynch.

That refers to the settlement reached in a lawsuit brought by New York Attorney General Andrew Cuomo, which claimed "Bank of America's management - namely former CEO Ken Lewis and fromer CFO Joseph Price - 'intentionally failed to disclose massive losses at Merrill so that shareholders would vote to approve the merger.'" Hero Judge Jed S. Rakoff rejected an "initial $33 million figure," and held out for the higher penalty, to be paid out to BofA shareholders.

Really sticks it to Bank Of America, right? Well, for some perspective, let's go back to that Barron's column and travel a few inches south:

ITEM: "In Brief"

Former Bank of America Chief Ken Lewis retired with a package totaling $83 million.

Now let's see, 83 goes into 150 approximately 1.81 times, or to put it another way, 83 is 55.3% of 150. My, my... what a serious penalty! I'm guessing that the irony here may be lost on Barron's readership, or, indeed, the authors of this piece. But are you feeling that tug on your crotch, yet?

[Would you like to follow me on Twitter? Because why not? Also, please send tips to [e-mail] -- learn more about our media monitoring project here.]

Comments

[decsatsv]

08:21 AM on 03/03/2010

"Former Bank of America Chief Ken Lewis retired with a package totaling $83 million.

Now let's see, 83 goes into 150 approximately 1.81 times, or to put it another way, 83 is 55.3% of 150. My, my... what a serious penalty! I'm guessing that the irony here may be lost on Barron's readership, or, indeed, the authors of this piece."

Speaking of missing the point, the author of this story does completely, because Ken Lewis won't pay a dime of this penalty, nor will any of other corporate criminals. Instead, the money comes from B of A shareholders, rubbing even more salt in their fiscal wounds.

This settlement was brought to you by the Obama "reform" head of the SEC, Mary Schapiro, who gave up a $3.5M job at FINRA (Wall Street's "self regulatory" paper tiger) to come to Washington for another term servicing the public.

[oldwhitewomantoo]

09:07 PM on 03/02/2010

Whenever I hear stories like this, I wonder, once again, where will it end?

And, if I move to Canada, will it be better there? I'm mean, less grossly-obvious over-the-top, seemingly-unending greed at almost every turn?

Any Canadians want to put in their two cents?

Will you adopt me?

[banker67]

10:51 PM on 03/02/2010

I have the same question. If I move to Canada, will I at least find a society that disapproves of wholesale theft of tax dollars by the wealthiest people in the nation?
I'm inclined to think I will. Most Canadians I know say that they frown on the way American banks do whatever they please and then pay their executive astronomical bonuses with bailout tax dollars.
Maybe wholesale theft is still illegal in Canada.
Boy, do those Canadians have a lot to learn about bribery and the inviolable cloak of 'national security,' eh?

[karen1p]

11:40 PM on 03/02/2010

But Canada is cold......really cold....and snowy.

[oldwhitewomantoo]

07:18 AM on 03/03/2010

That's a lesson I don't want them to ever learn.

Maybe the cold helps keep that out of their lexicon.

[pfrogger]

01:18 PM on 03/03/2010

the grass is always greener ...

did you do the research? did you even other to look at Canada's banking system or other facets of Canada's system?
no of course not. the American mantra: why research the facts and evidence when I can feel. totally useless. and you wonder why these thieves have stolen the American Dream so easily. take a look in the mirror.

as for Canada. they're "going American". the conservative party, similar to the US conservatives has done the same damage to Canada as the US conservatives have done to the US, although to a lesser degree. but Canada is not that much better. corporations rule there as well.
http://www.huffingtonpost.com/erich-pica/the-attempted-corporate-g_b_480888.html
and Canada will be just like the US in 10 to 20 years. the rich there are doing all they can to strip social programs and security. they're using the same mantra of government is bad and the Canadians are buying it in increasing numbers.
so ya, move to Canada, and in 10 years get ready to move to Europe.

[oldwhitewomantoo]

08:24 PM on 03/03/2010

Maybe, though, if I move somewhere I've never lived before & I don't go on these websites, I can put my head in the sand like, say ... the vast majority of Americans who don't seem bothered by this stuff.

I don't know.

I'm just frustrated with feeling so helpless. Like all of this is out of my control & there is truly nothing I can do.

Writing letters doesn't seem to make a difference.

I already have spent enough money supporting people I hope believe in what I do and organizations that appear to be doing good here & abroad.

I'm just feeling ... so disappointed.

[oldwhitewomantoo]

08:26 PM on 03/03/2010

And, look at this post. There's only a few of us even giving a damn to comment.

[DebtNavigation]

03:33 PM on 03/02/2010

These big banks need to be punished by Americans. By not paying.

In Mexico in the mid-'90s Wall Street engineered a currency coup that tripled the debt owed by small businesses and family farms and also allowed for them to be massively ratejacked on top of it. Mexicans consequently formed the "el Barzon" movement and pushed back Wall Street and deposed their ruling party of 60+ years. In this country YouTube phenom Ann Minch has already declared the debtors' revolt and begun going after them http://www.revoltstartsnow.com

If you've been pushed under, you can read my book for free: http://www.scribd.com/doc/25443175/Debt-Hope-Down-and-Dirty-Survival-Strategies-Evaluation-Version-Complete

[karen1p]

11:43 PM on 03/02/2010

I'm not paying....not paying my mortgage....just hired the best foreclosure attorney. And since my credit now is crap....might as well not pay my credit card (BTW, my credit card balance is $1200.00). Always been very conservative with my money until this whole predatory lending and I will sell you something and not explain it to you mortgage days......FFFFFF you WaMu.

[DebtNavigation]

11:59 AM on 03/03/2010

Reggie Middleton of the boombustblog sees the second round of this mess impacting hard in the short term. No mater how bad it has seemed up until now, it's like we've been in the eye of the storm recently, and the back half of the storm is about to hit.

The "new normal" is going to be a nostalgic memory by the time this is all through.