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

According to a June 7^th Businsessweek article, one hedge fund group has spent $1.4 million lobbying congress in the first quarter of 2010.  That’s a lot of lobbying.

They are not alone.  Managed Funds Association, an industry trade association, whose members include Bank of America Merill Lynch, Bank of New York, Barclays Capital, Citi, Goldman Sachs & Co., JP Morgan Chase & Co., and many more have increased its spending by over half a million dollars from the same quarter last year. Why?

Surely not to protect consumers; nor to put more strident controls and oversight on a financial services industry that brought us within an eyelash of a worldwide depression. 

 No.  Their singular goal is to stop reform that Main Street so desperately needs. The newly passed Senate and House financial reform bills, presently in reconciliation proceedings, signal the beginning of a material shift towards proper regulation of the casino, Wall Street has become.  These reforms include a new Consumer Financial protection Agency, increased rewards for whistleblowers, and the end of predatory lending practices like zero-down sub-prime mortgages.  Wall Street wants none of that reform.

As we’ve reported before, Wall Street doesn’t get it – or perhaps more correctly – they do get it. They realize memories are short and lobbying dollars can make a difference.  A big difference; so they are playing the game.   And playing it well.

The only way Main Street can complete must be through their role as the collective customers and shareholders of Citibank, Bank of America and Goldman Sachs.  They must vote with their feet and demand that management of these firms limit spending on lobbying and finally recognize the need for regulation and stability in the financial markets.  Proxy battles, sharp attention to management spending and accountability can be a very  

And the government must step up enforcement under current regulations and rules.  They can no longer take a laissez faire approach to the Captain’s of Wall Street.  It’s time for Eric Holder, Mary Shapiro and Sheila Baird (check FDIC) to roll up their sleeves and go after every single violation.  Zero tolerance.  That’s what Wall Street might understand.  That’s what will begin to foster change, stability and growth.

Assisted by Zachary Kady

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“Bank of America” implies a bank that reflects the American spirit; a spirit based on cooperation and unity. America is a nation of citizens who lean on each other, lend a hand, and particularly in hard times, work together toward a common good.

Sadly, the real Bank of America fails to reflect these core values. Without remorse, it casts out loyal customers and strands Americans who suffer its exorbitant fees. How dare such an organization call itself the Bank of America.

Bank of America has repeatedly lied to its shareholders, embraced the worst practices of subprime lending, and supported Ponzi schemes that victimize innocent investors. And now this…

Bank of America fired Customer Advocate Jackie Ramos. Why was Ramos fired? She was doing her best to help others in a time of need. She was being an American.

Specifically, Ramos was fired for approving modification programs or lowering interest rates for customers who could not afford their charges. In short, for helping customers.

Bank of America must shed its name. Until it changes its mission and works for—rather than against—the American ideal, it does not deserve to tout itself as America’s bank.

Please visit our blog to select what name you think best suits Bank of America. Here are some suggestions that readers have submitted:

• Bank of Shame
• Bank of the Few
• Bank of Greed

Assisted by Jessica Begen.

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Bank of America’s chief executive, Kenneth D. Lewis, announced his sudden resignation last week. Lewis has been under a cloud of suspicion following allegations that Bank of America misinformed shareholders of details related to its merger with Merrill Lynch.

Lewis’ personal career at Bank of America is a classic American rags-to-riches tale. He began working as a low-level loan officer, eventually moving up to become the bank’s President as the bank grew to be one of the world’s largest.

As President, Lewis’ agenda: growth and profits. From Fleet to Countrywide to the venerable Merrill Lynch, he surely was successful on expanding upon the nationwide platform created when upstart Nation’s Bank purchased Bank of America. But what about compliance? What about nurturing a culture of measured risk and thorough analysis? Looking back on Lewis’ reign, after a $40 billion government bail out, and the debacle surrounding Bank of America’s failure to disclose (or perhaps worse) billions of bonuses to Merrill executives, he leaves despite expansion with a mixed record to be sure. 

Main Street hopes that Ken Lewis enjoys retirement and the $100 million he is expected to receive in stock and compensation – money that cannot be touched by payment czar Kenneth Feinberg. 

Perhaps he can use that money and business acumen to start a foundation –that trains bankers in compliance and business ethics … might be a nice start.

Assisted by Jess Begen and Zach Kady

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We can thank Krugman and Schapiro for directing attention to these practices, and the next step is to intervene.  Main street has borne enough of the burden caused by the me-first, profit-seeking attitudes of these companies.

In Monday’s New York Times, noted economist Paul Krugman’s Op Ed piece draws attention to the proliferation of high-speed trading by the elite on Wall Street, notably Goldman Sachs.  Using high-speed trading, Goldman Sachs has already made millions trading stocks.  Yes, trading stocks.  Not financing infrastructure or lending to startups developing new or better technologies.  Just trading.  In a related story, SEC Chairwoman Mary Schapiro got it right when she recently called for elimination of the practice of ‘flash’ trading.  While the two concepts are subtly different, the net effect is the same for main street: the short end of the stick.  For every dollar made on Wall Street, main street more often than not loses a dollar.

Disturbingly, the same financial institutions we spent billions of dollars to save from bankruptcy mere months ago are victimizing taxpayers yet again.  We can thank Krugman and Schapiro for directing attention to these practices, and the next step is to intervene.  Main street has borne enough of the burden caused by the me-first, profit-seeking attitudes of these companies.  Identifying and eliminating unfair stock market practices is an essential step toward fairness.

(Post was prepared with the assistance of David Martin, University of North Carolina 2010)

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