SEC Talks Tough, But Actions Over Merrill Bonuses Show Nothing's Changed
finance.yahoo.com
Posted Aug 28, 2009 08:00am EDT by Tech Ticker in Newsmakers, Banking
Related: BAC, XLF, SKF, FAZ, FAS, ^DJI, ^GSPC
Controversy over bonuses paid to Merrill Lynch executives last year continues to dog Bank of American and its CEO Ken Lewis. A related settlement with the SEC is also raising questions over whether the regulator really has gotten tougher in the wake of the meltdown that occurred on its watch.
Wall Street Journal reporter Susanne Craig says the SEC's "heart was in the right place" when it smacked Bank of America with a $33 million fine related to the bonuses on Aug. 3. But U.S. District Judge Jed Rakoff has twice refused to approve the SEC's $33 million settlement, calling it "strangely askew."
Craig agrees the regulator faltered by not providing more disclosure about how the settlement was reached, and by punishing the corporation rather than the individuals behind the decision. (Earlier this week, BofA defended its actions and the settlement.)
CEO Ken Lewis and other BofA executives "knew full well what was going on" with the Merrill bonuses last year, but took a "hear no evil, see no evil" attitude, Craig says.
"It's been really frustrating to watch Ken Lewis say he didn't know - they did know," she continues. "There should be some accountability. This goes to larger issue of Ken Lewis and the leadership, and how long can Ken Lewis remain in charge of Bank of America?"
In that regard, the Merrill bonus case serves as an example of the broader lack of accountability despite the "mortgage meltdown" and wholesale destruction on Wall Street in 2008, Craig says.
Until individual executives are held responsible for the damage done to their shareholders, firms and the economy in general, any talk of the SEC getting tougher is just that - talk. |
