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Even a dog knows the difference between being stumbled over – and being kicked. But do you think imperious and obtuse Wall Street bankers would even feel it if they got a kick in the pants?
Jed Rakoff, a federal judge in New York City, decided to find out. Earlier this year, lawyers for Bank of America and the Securities and Exchange Commission strolled into Judge Rakoff’s courtroom asking him to ratify a legal settlement between the bank and the watchdog agency – usually a routine matter. But this case involved the $3.6 billion in executive bonuses that a subsidiary of Bank of America had doled out last year – even as the bank was getting a $45-billion taxpayer bailout.
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Worse, the bankers had lied to their own shareholders about it – a boo-boo that violates SEC rules. But our watchdog had no bite and very little bark. The agency assessed a measly fine of $33 million, which is less than the individual bonuses that some of the bankers had taken.
To the astonishment of those who made this shameful sweetheart settlement, the judge refused to rubberstamp it. Instead, he demanded the names of each executive responsible for the bonus ripoff, saying they should be held personally accountable for their crimes. In two hearings before the judge, the bankers and the SEC bobbed and weaved, shucked and jived, trying to skate free. But Rakoff, was not to be trifled with. Invoking America’s notions of morality and fair play, as well as channeling the public’s rising anger over Wall Street’s greed and Washington’s meek complicity in that greed, the judge voided the settlement on September 14..
Now, Bank of America and the SEC face a public trial over the whole sorry mess they created. At last, a judge has kicked back at some of the financial system’s greedheads and incompetents – and, yes, I do think they’re feeling it.
“Holding Wall Street Bankers Accountable,” www.creators.com, September 1, 2009.
“Judge Rejects A Settlement Over Bonuses,” www.nytimes.com, September 15, 2009,