The Corporate Observer Blog : Consumer Protection, Corporate Abuse : Class Action Lawyer & Attorney : Steven Berk Law Firm

• Email This
• Print
• Comments
• Trackbacks
• Share Link

“I wish the average American was making $91,000”

 Judge Rakoff of the Southern District of New York is our person of the week.  Why?  Because he wouldn’t rubber stamp a deal between the SEC and Bank of America, which allowed BofA to sweep under the rug its use of taxpayer money (from “Uncle Sam”) to pay $3.6 billion in bonuses to Merrill employees. 

 Merrill had lost $27 billion!  Are bonuses deserved on losses of that magnitude?  Should that be the norm?  Can the whole thing be swept under the rug for a mere $33 million dollar fine?

 “No” said our person of the week, Judge Jed Rakoff.

 After some harsh questioning and just plain common sense – the Judge called the proposed fine “strangely askew” (to the $3.6 billion dollars in bonuses) and sent the parties packing; giving them 2 weeks to rethink and attempt to support the settlement. 

 Let’s be clear.  I have no issue with ample bonuses and huge salaries.  I’d take one. 

 But they should be a reward for: 

• Creating shareholder value
• Extraordinary service
• Taking risks on new technologies
• Creating new jobs. 

 - They should not be paid by taxpayers.  - They should not be paid for generating losses in a public company and - they should not be made for churning trades and providing no value to folks on “Main Street”.

 In an effort to defend the $3.6 billion in bonuses, BofA’s attorney Lewis Liman (our imbecile of the week); argued it only amounted to on average: bonuses of $91,000.

 Mr. Liman, what planet are you living on?  How many 

• teachers
• nurses
• firefighters
• legal aid attorneys
• operators of homeless shelters; and
• community organizers

even earn $91,000.  Jed Rakoff stood up for “Main Street” this week and for that reason he is our “Person of the week”.