Most Scandalous Bonus Scandal Ever!

Wednesday, February 11, 2009

$25 million for three months work while Merrill Lynch was losing money hand-over-fist and taking taxpayer loot.

My question is, forget the taxpayers…what about the shareholders?

Where are these people? Where are the lawsuits? Clearly, these companies are in violation of their fiduciary responsibilities vis-à-vis shareholders. Where are the pension funds? The huge hedges? Hello? Anyone?

From the NY Daily News:

Four of his top deputies faced no such change of fortune, however, pocketing a total of $121 million as Merrill evaporated.

One beneficiary was Peter Kraus, a Thain hire who started at Merrill in mid-September and quit Dec. 18, the day Bank of America took over.

He walked away with a $24.9 million bonus for those three months of work, which figures to about $249,000 a day. The day he quit, his wife closed on a $36 million luxury Park Ave. co-op, records show.

Kraus declined to answer questions, although a source familiar with the matter said the amount was guaranteed in his Merrill contract.

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Cuomo Targets Merrill Lynch Bonuses

Tuesday, January 27, 2009

New York Attorney General Andrew Cuomo has subpoenaed John Thain and Bank of America CAO, J. Steele Alphin.

Get ’em Andrew! Vote Cuomo forever!


Manic Monday on Wall Street

Monday, September 15, 2008

1-2 Knockout live blogged the Merrill Lynch / Bank of America conference call this morning. BoA is still swallowing Countrywide, and now Merrill. They’re going to cut costs and go global – radical!

Floyd Norris will be live blogging throughout the day at the New York Times. Plus, Dealbook just post that AIG’s stock has been downgraded in advance of anticipated debt downgrades.

Dealbreaker has got gossip (Buffett to AIG’s rescue?).

And, of course, there is CNBC.

Dow down 300 at opening bell…


Lehman Bankrupt, Merrill Sold, AIG Teetering

Sunday, September 14, 2008

Holy cow!

The Feds are not going to bailout Lehman, Merrill Lynch is sold to Bank of America, and everyone is trying to figure out how to keep AIG from collapsing.

Doom and gloom, Great Depression-like in scope. Black Sunday.

And Citigroup, UBS, WaMu, etc. are still out there…

Look for a chaotic and bleak Monday.


Merrill Lynch Steps Up and Takes A Hit

Tuesday, July 29, 2008

By writing down the value of $30 billion in CDOs to the tune of 22 cents on the dollar, Merrill Lynch may have positioned itself to begin moving beyond the subprime mortgage crisis. The action, which some believe may set-off a chain of similar discounts, can’t be easy for Merrill’s shareholders, but it does, at least, put a price on some of the previously impossible-to-value debt obligations.

Now we’ve got to watch and see if Citi, UBS, Lehman, and whoever else, follows suit. There are buyers out there willing to take this kind of debt off the banks’ hands at that price. It ain’t pretty, but it may mean a fresh start. And right now, the banks desperately need to get out from under it.

It is a tough but good move by Merrill.

Update (7/30/08): This deal is looking less good. Merrill has apparently given up all profits, but remains on the hook for potential losses because they lent most of the purchase price to the private equity firm (Lone Star Funds) that bought the CDOs. D’oh! Read about it here.


Goldman Subpoenaed; Short-Sellers Targeted

Wednesday, July 16, 2008

Acting quickly to investigate the spreading of false rumors in financial markets, the SEC has subpoenaed Goldman Sachs, Deutsche Bank, Merrill Lynch, and more than 50 hedge funds to trace the source of rumors that have destroyed the value of Bear Stearns and Lehman Bros. stock.

This move comes as SEC Chairman Christopher Cox has ordered a temporary halt to “naked” short-selling in a handful of financial stocks (the order takes effect on July 21, see list here). “Naked” short-selling allows investors to sell a stock without actually owning or borrowing it. This enables the investor to drive down the price with nothing more than a bunch of sell orders. The temptation for manipulation is great, and naked shorting with the intention of driving down prices is illegal (you see, when you short, you just have to hope).

At any rate, this is all good stuff and should put some of the shorters back on their heels and give these financial stocks a little room to breathe.