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?
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