Commit fraud with your mortgages against the consumer and face a fine by Uncle Sam of $120 million…
Settle fraud with wealthy mortgage bondholders and give them $8.5 billion!
Is it any wonder there’s not much trust between the taxpayer and the banker?
Gorilla answers: “Or between the taxpayer and those he elects to uphold the rule of law!”
What’s the price Bank of America’s paying for Countrywide Credit’s ripping off homeowners with outrageous fees?
A whopping $500 per homeowner!!!
This is yet another reason why regulation cannot be the only solution to the financial crisis brought upon the country by the banks.
They’ve got deep pockets, plenty of lawyers, and a willingness to fight tooth and nail against any threat to their profits.
Gorilla says: “Whoops! Sounds too much like a description of the oil industry!”
The Bank of America/SEC settlement is in, and the government will be collecting $150 million.
On the other hand, the management of BofA perpetrated a fraud on its shareholders that cost them something on the order of $20 billion.
BofA remains a zombie ward of the US government.
The judge who made the ruling called it “half-baked justice”, since no one in management was punished and there is no evidence that BofA practices will change as a result of this decision.
So, it’s another example of the US government condoning fraud, just as it’s also condoned torture, so as to serve the political interests of Movingforwardville by avoiding any accountability in Goingbackwardville.
And it demonstrates, once again, that being a wholly owned subsidiary of Wall Street means never having to admit you’re a failure.
Gorilla paraphrases: “When you owe trillions, it’s always the government’s problem!”
Bank of America: the hits just keep coming!
Meanwhile, the vaunted financial service reform has been neutered further (it was already more or less a toothless eunuch) with signals that the separate consumer protection agency will probably be dropped to win favor from the wholly owned Wall Street subsidiary called the US Senate.
Gorilla thinks: “May have to settle for a slice of bread, the toaster’s no longer in production!”
Kenneth D. Lewis is jumping before being pushed out as CEO of Bank of America.
Not surprising, given his less than stellar acquisitions of Countrywide, MBNA and Merrill Lynch, a portfolio of bad loans that makes the bank effectively insolvent, and a share price 33% lower than when he took over.
Equally unsurprising are the parting gifts he takes with him: in excess of $100 million.
Gorilla says: “Rising from the grave is easier for this zombie!”
So, how’s the SEC doing these days, as part of the financial regulatory reform so beloved by the happy talkers in Movingforwardville?
Any progress on that Bank Of America settlement?
The proposed settlement, the judge continued, “suggests a rather cynical relationship between the parties: the S.E.C. gets to claim that it is exposing wrongdoing on the part of the Bank of America in a high-profile merger; the bank’s management gets to claim that they have been coerced into an onerous settlement by overzealous regulators. And all this is done at the expense, not only of the shareholders, but also of the truth.”
Gorilla says: “Guess they’re all stuck in Goingbackwardville, what they need is some Chinese rubber to meet the road ahead!!!”
How does the SEC justify Bank of America’s failure to inform shareholders about the bonuses paid to Merrill Lynch executives prior to the companies’ merger?
After all, if you’re the chief executive of Bank of America or Merrill Lynch, you aren’t responsible for your own decisions if they were largely made by lawyers your company employs. This is very curious, in that the same executives are supposed to be responsible for all financial statements they sign off on under Sarbanes-Oakley.
But these boys are clever, they managed to set things up so that their patently unethical and illegal non-disclosure of material facts was protected by attorney-client privilege!!!
Bank Of America remains insolvent, so their shareholders are screwed either way. Executives won’t be able to cover that up much longer (unless they manage to buy off Congress and change the accounting rules again), so we should see Goingbackwardville pushing back against the phony reforms of Movingforwardville by the end of the year.
Gorilla sums it up: “When the rubber stamp meets the road on Wall Street, you can bet the SEC will be changing the tires!!!”
Back in Movingforwardville, there’s a wrench in the works for the SEC’s settlement with Bank of America. It seems the judge wants to find out who mislead Bank Of America sharedholders about the merger with Merrill Lynch.
“I cannot ignore issues of responsibility,” said Jed Rakoff, a federal judge in New York, before ordering the SEC and BofA to submit detailed statements about the case by August 24.
Gorilla thinks: “If only we had this guy working for the Justice Department, then we might get a few bigger fish in the torture deep fryer”.
