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”.
