N.Y AG (Cuomo): Merrill Lynch Wasted Bailout Funds

[sabra]

Source: CBS News/AP

Investment Bank Secretly Awarded $3.6B In Bonuses Using Taxpayer Money, Andrew Cuomo Charges


(AP) New York Attorney General Andrew Cuomo accused Merrill Lynch & Co. executives of corporate irresponsibility by secretly and prematurely awarding $3.6 billion in bonuses as taxpayers were bailing out the industry.

Cuomo made the claims in a letter sent Wednesday to U.S. House Financial Services Chairman Barney Frank.

"In a surprising fit of corporate irresponsibility, it appears that, instead of disclosing their bonus plans in a transparent way as requested by my office, Merrill Lynch secretly moved up the planned date to allocate bonuses and then richly rewarded their failed executives," Cuomo stated.

"Merrill Lynch had never before awarded bonuses at such an early date, and this timetable allowed Merrill to dole out huge bonuses ahead of their awful fourth quarter earnings announcement and before the planned takeover of Merrill by Bank of America," Cuomo said in the letter.

Read more: http://www.cbsnews.com/stories/2009/02/11/politics/main4792596.shtml?tag=topHome;topStories

[Lugnut]

1. Make. Them. Pay. It. Back!

:grr:

[WriteDown]

5. How? nt

[Joe Chi Minh]

12. What do you mean how? Governments have ways of clawing back

money. Posters here are not likely to know the legal mechanism involved, but basically, as Bush proved, with even a tiny base, a President alone, never mind Congress and the Senate, can do just about anything. Few would dare suggest it would not be in the public interest.

[WriteDown]

15. Like I asked. Give me an example how?

Let's say you want to buy a new car and you tell me that you need money to buy a new car. I give you 10K and you go to the casino and lose all that money. What is my recourse?

[Joe Chi Minh]

16. "Losing" that kind of money? Wake up, Christmas. Incidentally, that's rather disingenuous

effectively analogising my powers with those the US government. Shame on you.

[WriteDown]

17. It was just an analogy...

you still haven't detailed how you get the money back (within the law).

[Joe Chi Minh]

18. Have you ever heard the term, "lawmaker"? It's used quite a lot in the US,

I believe, to describe your elected representatives. I saw it in a UK newspaper the other day. Thatcher was a very active lawmaker and unmaker. I expect the far-right politicians are not the only ones so empowered.

[WriteDown]

19. How are you going to make a law retroactive?

Last I heard, that could not be done.

[Joe Chi Minh]

21. Really? Well, in the UK, we have had clawbacks of quite large sums,

I believe.

Also, there are ways and means. Thatcher, of all kites and crows, levied a windfall tax on the banks in her day.

Also, didn't Bush retroactively condone the snooping of the telecomms corporatisn and goodness knows what else. The use those billions could be put to for the benefit for the country would be a matter of far greater national security.

You seem very naive, so forgive me if I don't continue to state the obvious to you.

[WriteDown]

23. I'm the naive one?

So banks that are taking a loss would be levied a windfall profit tax on future earnings that they are currently not meeting? Yeah, that seems plausible :eyes:.

Given that you are from the UK, I find it odd that you point out our wiretaps and such. Seems like everyone in the UK is monitored by camera all day long.

[Joe Chi Minh]

25. More non sequiturs? What has our police state got to do with yours?

Or the price of fish and chips.

Actually, ours is only for cheapness, though Brown and Blair have this control-freakery thing and want us all to have

It's the use of those funds that needs to be established. You know, just in case some of it was used to enhance personal finances.

In worldly terms, the people concerned are not lacking in nous one little bit. They will know that that money wouldn't begn to dent the toxic assets those banks have on their books, which would dwarf the GDP of the planet for more than a decade. Do you really think they will have thrown all that money away? They're still bankrupt - in spades. Why are you unable to grasp simple concepts that have bandied about in the news, at least on the Net, for ages?

[WriteDown]

26. I'm still trying to figure out what FISA has to do with TARP...

but I'll keep things simple. I am not saying that the money is necessarily gone, but I'm sure a good portion has already been spent. My point is that the time to set guidelines on how the money could be spent was before TARP was even given out. That time has passed. Its over. We can learn from the experience, but I guarantee that not one dime of that money will be recovered.

Also, "dwarf the GDP of the planet" is a unbelievable exaggeration. Especially considering that the US's GDP alone last year was close to 14.5T.

[Joe Chi Minh]

27. How about 360 trillion? I must check. But that's how I remember it.

Spent on what? Give some examples? Mergers? In any case, whatever additional cost, they need to be demerged. They're too big NOT to fail! I thought bonuses went to private individudals? No?

"That time has passed. Its over." The concept behind that expression is one Democrats have come to despise. "Get over it! Move on!" Is that it? Are you by any chance an interested party in any of this?

I'd like to see you eat that guarantee slowly in paper form.

[WriteDown]

28. 360T? You need to recheck those figures, stat.

How about John Thain(Merryl Lynch) who bought a 50K commode?

How about 400M for a 20 year contract with Shea Stadium by Citigroup.

Hows that for two?

[Joe Chi Minh]

29. Alas, very small beer indeed. You can do better than that.

[WriteDown]

30. I could....

but you get my point. Also, 400M to me is not small change.

How are you coming with that 360T stat?

[Joe Chi Minh]

31. I was always under the impression you could. But I'm still not impressed with your arguments.

In such a crisis as this, the Government can do anything it wants that is palpably just and beneficial to the common weal. Argue till you're blue in the face. They'll be after your money. Or is it your friends' money?

"Even if $700 billion were fanned into $7 trillion, the sum would not come close to removing the $180 trillion in derivative liabilities from the banks’ books. Shifting those liabilities onto the public purse would just empty the purse without filling the derivative black hole."

That is the more modest estimate I chanced upon. The passage quoted above is from this article:

http://dandelionsalad.wordpress.com/2008/10/18/the-collapse-of-a-300-year-ponzi-scheme-the-real-debate-is-crony-socialism-or-financial-sovereignty/

I'll see if I can find the higher one.

£500 to $750 trillion dollars - here, under The Mother of All Bubbles

http://www.blackagendareport.com/index.php?option=com_content&task=view&id=801&Itemid=1

[WriteDown]

32. So you're for fascism?

You're right, that would work. I'm just not as eager to sign on for that "solution."

I thought you had actual sources, not wild accusations. As long as we are making stuff up, I say it will take 10 Google dollars to buy the assets. Maybe someone will cite me.

[jordi_fanclub]

20. Fraudulent conveyance

Send an email to Cuomo urging him to go after these guys for fraudulent conveyance:
http://www.oag.state.ny.us/online_forms/email_ag.jsp

Believe it or not they do read these things. It will take five minutes of your time.

[Joe Chi Minh]

22. I'm sure Write-down will be very keen to do that. Not.

[Lance_Boyle]

14. torture them 'til they give it up voluntarily

we didn't revive all this spanish inquisition style shit for nuthin', right?

[louis-t]

2. Did anyone think something different would happen?

No wonder they won't answer any questions about where the money was going. They're all in collusion.

[Historic NY]

3. Its time to take these corporate pigs out......the IRS needs to be

directed to perform audits on all these individual CEO's & companies.

[independentpiney]

4. Aren't there unjust enrichment laws they could be prosecuted under? n/t

[Wizard777]

6. Execute them! China would do it. When was the last time China bailed out greedy CEO's?

I can see CEO's collecting that kind of salary and bonuses if they are executed when their business plans fail or they commit crimes. But when their failures are covered by our tax dollars instead of their lives. Signing you name should be a job that pays less than minimum wage. After decades of telling labor you work is useless without money funding it. Well now who's money is funding it? Worthless laborers money. I say execute them and we won't have to be bothered with bailouts ever again. A hangmans' noose will humble those arrogant SOB's real quick.

[acmavm]

7. These guys have to have hidden accounts down in the Caymens or

somewhere. Maybe we ought to waterboard Phil Graham and make him tell us where all this unregulated money went. I mean, I have NO doubt that he would know.

[tanyev]

8. "In a surprising fit of corporate irresponsibility"

Surprising to whom?

[pansypoo53219]

9. how about yearly audits?

til they behave?

[Sanity Claws]

10. Shareholder revolts!

In the upcoming annual meetings, shareholders, ordinary folks like us, should demand that these guys be removed.
Also, I haven't kept track of all the restrictions placed on shareholder derivative suits. Can they be used here to hold these guys liable for their self-dealing?

[snot]

11. Under current corp. structure, shareholders can't just say no to existing directors;

they have to nominate and elect better ones.

there may be some kind of fraudulent transfer laws that would apply if Merrill was actually insolvent at the time the bonuses were paid. however, as someone above pointed out, actually locating and recovering the money might not be easy.

[Joe Chi Minh]

13. Many worthwhile undertakings are difficult. And successful, ultimately.

[defendandprotect]

24. Barney Frank is heading up the Finance Committee ... they went over this today . . .

but I wasn't able to pay a lot of attention to it ---

anyone else see it?

C-span 3 is playing it now --

One of the reps -- Perelmu? -- hinting to Morgan Stanley CEO that maybe they're too

big and putting our entire system in jeopardy?

Morgan Chase CEO arguing counter to that --

Yet, the GOP loves small government --- !!!

Too small to monitor, inspect, and control large corporations.

They've just picked up trillions in corporate-WELFARE and I haven't even heard a thank you!