What's so funny about the biggest story out of Wall Street today? Bank of America settled Security and Exchange Commission charges that it lied to investors over billions in bonus payments to Merrill Lynch employees for $33 million, and Reuters’ Felix Salmon had this to say:
That’s less than 0.92% of the bonuses in question. If I were Citigroup, and the Feds were telling me not to pay Andrew Hall his $100 million bonus, I’d be inclined to just pay it anyway. And then sheepishly apologize and pay a $920,000 fine. So much easier than doing the right thing from the beginning.
Edward Harrison at Credit Writedowns said the bank got off with a “mere slap on the wrist” after billions in taxpayer dollars have prevented it from collapsing. “There should be absolutely no deal," he continued. "We deserve to know exactly what happened. If BofA has a reasonable defense – fine. If not, force wrongdoers to resign and suffer the legal ramifications.”
Reuters’ Jeffrey Cane goes further, claiming that John Thain, chief executive of Merrill Lynch during the merger with Bank of America, was right in blaming BofA for the decision to pay Merrill employees up to $5.8 billion in bonuses after receiving a bailout. Cane wants to know who at BofA is responsible for hiding the truth about lying about the Merrill bonuses.
“The credibility of BofA’s management has completely evaporated as a result of the Merrill acquisition,” Cane wrote.