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The Corporate Observer A Publication by Attorneys Devoted to Protecting Consumer Rights

Monthly Archives: April 2011

Jeffrey Goldberg, the Intelligent Observer: Arizona and Utah Honor the American Handgun

By corporate observer guest on Posted in Social Policy

Who is surprised that Arizona and Utah are the first US states to adopt an official state gun, Utah choosing the Browning M1911 semi-automatic pistol as its state gun in March, and Governor Jan Brewer signing legislation designating the Colt single-action army revolver as the Arizona state gun this past week?  Utah chose the Browning… Continue Reading

AT&T v. Concepcion: Consumers Lose Again

By Steven Berk on Posted in Consumer Protection, In the Courts

Although referred to as the “weakest branch” by Hamilton (as well as Montesquieu years earlier), the Supreme Court has shown it has some muscle over the last decade. They elected a President (Bush v. Gore), infused corporations with full First Amendment rights akin to every American human being (Citizens United), and earlier this week denied consumers practical redress for corporate misconduct (AT&T v. Concepcion). And the Roberts Court is just getting started.

Executive Compensation Gone Wild: Alan Mulally, Ford’s Two Hundred Million Dollar Man

By Steven Berk on Posted in Consumer Protection

I like Ford. I like Mustangs. I like that in the dark days of the “Great Recession” Ford alone eschewed federal bailout money and survived — indeed thrived — on its own war chest.
But paying nearly $200 million in stock benefits to its savvy, and needless to say, talented CEO, Alan Mulally? Are the days of a billion-dollar CEO just around the corner?

Paul Volcker To Head The New Consumer Finance Protection Board?

By Steven Berk on Posted in Consumer Protection

Finally, at the heart of his wisdom is a moral compass that cannot be bought or compromised. Eighty three years young, he is not looking for a job in “industry” or to be feted by Wall Street chiefs at black tie dinners. He will not suffer fools lightly or be bamboozled by high-priced consultants and convoluted explanations about how failures to disclose financial risks to consumers is somehow a good thing.

Why a Woman Will Replace Elizabeth Warren as Head of the Consumer Finance Protection Board

By Steven Berk on Posted in Consumer Protection

Reports over the weekend claim Professor Warren went to the Hill (as in Capitol Hill) to find the votes she needed for her nomination to be the first head of the Consumer Finance Protection Board (“CFPB”). She came up well short of the mark. Wall Street fears her more than inflation and will easily have the votes to block her nomination from ever reaching the Senate floor for a vote. (Sad, but the subject of another story.)

Raj Rajaratnam and Reasonable Doubt

By Steven Berk on Posted in Social Policy

Reasonable doubt. It seems attorney John Dowd is left with that amorphous standard to keep his client out of jail. When a defense attorney relies on reasonable doubt they are in trouble. Surely it brings a smile (albeit hidden) to the prosecutors lips as they sit politely and listen. They know if the defense was strong, they would be pounding on the facts and not what to many laypeople is a technicality.

Excessive Executive Compensation Comes in All Forms: Salary, Stock Options, Restrictive Stock Grants, Repurchasing of Corporate Stock and Good Old Dividends

By Steven Berk on Posted in Consumer Protection

Sadly, in practice corporate gaming and greed take over. Too many managers have been caught manipulating the short term earnings to get a bump in the stock price. Or at a higher level, they were managing for the market – being slaves to analysts and making the quarterly numbers. Often that meant reporting soft earnings or camouflaging toxic liabilities for the next guy or the guy after that to swallow. “Call in the consultants” stock options alone won’t work.

New York Times Columnist Joe Nocera is Our Person of the Week

By Steven Berk on Posted in Consumer Protection

The Corporate Observer has not named a person of the week award for several months so this is kind of special. …Drum roll please. New York Times columnist Joe Nocera is our person of the week. He joins an illustrious crew including early Madoff reporter Harry Markopolos, Supreme Court Justice Elena Kagan, pharmaceutical whistleblower Cheryl Eckard, SEC Chair Mary Schapiro, and numerous others.

Attempting to Establish Reasonable Doubt: Rajaratnam Relies on Expert Testimony

By Steven Berk on Posted in In the Courts

In an effort to illustrate that the “inside information” obtained by Mr. Rajaratnam was largely irrelevant, the defense called to the witness stand University of Rochester Business School Professor, Gregg A. Jarrell, a frequent expert witness (for both prosecutors and the defense).  Professor Jarrell testified in detail on how trades executed by Mr. Rajaratnam could… Continue Reading

Jeffrey Goldberg, the Intelligent Observer: The National Debt Limit and Charles deGaulle

By corporate observer guest on Posted in Weekend Edition

According to Elihu Root,  Progressive era Secretary of State and War, US Senator, Nobel Peace Prize winner: "The growth of modern constitutional government compels for its successful practice the exercise of reason and considerate judgment by the individual citizens who constitute the electorate." Uh oh. Recent Fox News and NBC/WSJ polling shows nearly two thirds… Continue Reading

Corporate Tax Avoidance on Tax Day

By corporate observer guest on Posted in Consumer Protection

The chasm between the individual and the corporation is never bigger than during tax season. As millions of average, procrastinating Americans like me – individuals, households, small business owners – put the final touches on their income tax returns, thrilled to discover that they may be getting a small refund ($500 this year!) or at least don’t owe any money, it’s always shocking to be reminded that the largest, most profitable U.S. corporations somehow manage to completely avoid paying taxes.

Raj Rajaratnam Must Take The Witness Stand and Testify in His Defense

By Steven Berk on Posted in In the Courts

Mr. Rajaratnam has one card to play. Take the witness stand. As a federal prosecutor, I tried many a criminal case and I can tell you that juries are not easy to predict. You might think the evidence is overwhelming. Throughout the weeks of trial you’re certain you’ve seen what appear to be knowing smiles from the jurors as they took their seats only a few feet from your table in the courtroom. And then bam, surprise! They are deadlocked, or worse they have voted for acquittal.

The Persecution of Barry Bonds? A Reply to William Rhoden

By Steven Berk on Posted in In the Courts

As a former federal prosecutor and baseball fan, I think that prosecutors bemoaned the fact that Barry was black. They knew race would be infused into their efforts to expose the harms of steroids; certainly complicating a “clear” case of lying. But alas, I come at this issue with my own sensibilities. I respect Mr. Rhoden’s contrary position.

To Testify or Not to Testify: Raj Rajaratnam Faces the Question of His Life

By Steven Berk on Posted in In the Courts

The government has rested.  The jury has heard scores of taped conversations and a mountain of documents and other materials have been presented to the jury and introduced into evidence.  Unlike most cases involving fraud and financial misconduct, where juries must piece together varying degrees of circumstantial evidence gleaned from documents alone, here the jury… Continue Reading

Guest Blogger Jeff Goldberg: What Do Democrats Believe?

By corporate observer guest on Posted in Weekend Edition

The primary reason we are at this point right now is the failure of Democrats to pass a 2011 budget last year, when they controlled the two budgeting branches of the government. Democrats were simply afraid to attach their names, votes and offices to a 2011 budget showing a $1.5 trillion deficit, so they choose to operate under continuing resolutions.

Quick Takes on Loan Servicing, Insider Trading and the Government Shutdown

By Steven Berk on Posted in Consumer Protection

It looks like a deal is near between the servicing companies and state attorney generals. Let’s hope it cuts out the outrageous (excuse the hyperbole) abuses in this area. Forged signatures and phony documents have become commonplace. This is the soft underbelly of the securitization market. But real reform wont ‘t come about until the banks are slapped as well.