Monday, October 19, 2009

WashTimes: Federal Regulators Misled Congress on BoA bonuses

Court documents obtained by the Washington Times indicated that regulators were aware of bonuses awarded to Merrill Lynch executives between the time Elijah Cummings (Democratic Representative from Maryland) asked Henry Paulson (former Secretary of Treasury) about bonuses in July 2008 and the time that $20 billion in aid to Bank of America (which acquired Merrill Lynch) was approved in January 2009. A letter by Darrell Issa (R-CA) asks why neither Paulson nor Fed chairman Ben Bernanke objected to the aid, seeing that Bank of America documents about the Merrill Lynch documents were available to the public by mid-December 2008. Public opinion on the issue of bonuses for executives of TARP beneficiaries has been raw since AIG received aid of over $150 billion in March, then disclosed over $150 billion in executive bonuses. Bank of America is also hounded by accusations of failure to disclose losses and Merrill Lynch bonuses before the merger.

Comments: [1] The probable result of the Merrill Lynch--Bank of America merger fiasco is likely to be heavy fines and possibly imprisonment for the most at fault. One hopes that governmental officals who knowingly misled the public will suffer comparable consequences to those Merrill Lynch and Bank of America executives who acted in bad faith; [2] yet again, are we REALLY sure that the U.S. Government is going to be effective in regulating new activities when past regulators have failed?


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