Lehman Bros., Bear Stearns CEOs Walked Away With Millions.
By Susie Madrak Wednesday Nov 25, 2009 8:00amVia Raw Story. You know, I not only want the money back, I want these people put in jail. They took the money and ran from their own culpability:
The CEOs of Bear Stearns and Lehman Brothers, the two investment banks that collapsed during last year's financial meltdown, walked away with hundreds of millions of dollars in compensation even as the company's shareholders lost everything, says a new report from Harvard Law School.
The top five executives at Bear Stearns made a total of $1.4 billion from bonuses and equity sales between 2000 and 2008, while the top five executives at Lehman Brothers made around $1 billion during that same period -- the period during which the companies ran up the bad investments that would see them collapse in 2008, according to "The Wages of Failure" (PDF), a report from Harvard Law School's Program on Corporate Governance.
"The people who invested in these companies should feel betrayed," Nell Minow, a compensation expert at the Corporate Library, told NBC's Lisa Myers. "The whole idea of capitalism is that the people provide the capital and the executives take care of it for us. In this case, the people provided the capital, and the executives took it."
Bear Stearns CEO James Cayne personally made $388 million in the eight-year period leading up to the bank's collapse, while Lehman Brothers CEO Richard Fuld made $541 million. Bloomberg news service notes that "shareholders who held their shares throughout the period analyzed in the report lost most of their initial investment."
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thanks suckers!
Big payouts for bankers despite failures
Nov. 24: Guest host Howard Dean is joined by former Gov. Eliot Spitzer, D-NY, to talk about a new report that shows top executives walked away with millions of dollars before the economic collapse.
Geeee...that evil Spitzer...cavorting with hookers. How can anyone take such a morally bankupt individual seriously!!
*snark off*
these ba$tards one red cent is beyond me... create your wealth the old-fashioned way (work) and spend less than you earn. Seriously, I stopped investing many years ago, after one more good friend had a safe bet that I lost thousands of $s on... it's definitely a sucker's game!
I want my $700 billion back. With the same kind of interest and terms the banks/financials charge us. Fair is fair.
i want my $13 trillion back...
$17 trillion!
It is class warfare.
Who is the working class, and how they are actually the great majority of the population, here
The financial coup d'etat here
Personal responsibility? Integrity? Honesty? Committment to shareholders?
Look em up in the textbooks. Savor them. Relish them. They mean nothing in the REAL world.
Welcome to the FREE market!
"If you need a friend, get a dog."
"The main thing about money, Bud, is that it makes you do things you don't want to do."
"The richest one percent of this country owns half our country's wealth, five trillion dollars. One third of that comes from hard work, two thirds comes from inheritance, interest on interest accumulating to widows and idiot sons and what I do, stock and real estate speculation. It's bullshit. You got ninety percent of the American public out there with little or no net worth. I create nothing. I own. We make the rules, pal. The news, war, peace, famine, upheaval, the price per paper clip. We pick that rabbit out of the hat while everybody sits out there wondering how the hell we did it. Now you're not naive enough to think we're living in a democracy, are you buddy? It's the free market. And you're a part of it. You've got that killer instinct. Stick around pal, I've still got a lot to teach you."
Quotes from everyone's favorite fictional capitalist.
It will give me something to ponder while I make my Pumpkin Cheesecake....
Lehman was not offered bailout funds. Their execs just looted the other employees, counterparties and shareholders. Rather than having them in jail, it would probably better to organize a way to have the pension fund retirees string them up.
Bear Stearns is a little different in that the Fed issued guarantees to the Morgan that bought them out, but I would say the beneficiaries were that party, not Bear itself.
Don't get me wrong, they're all crooks in any event.
Bear Stearns is a little different in that the Fed issued guarantees to the Morgan that bought them out, but I would say the beneficiaries were that party, not Bear itself.
I don't remember the actual numbers, but the government guarantee on Bear Stearns losses was capped (at $400 million I BELIEVE...not sure). So...gee do you think that Chase was going to swallow losses that exceed what the government would cover?
Ain't "free market capitalism" grand!!!
what happened to your pension, now you know.
... when Group W CEO Paul Lego got a $900,000 pension and an equally sizeable bonus for all his hard work.
Under his stewardship, our stock price went from the $50 range to around $20/share.
...what he would have gotten for not failing massively!
We license our doctors and our lawyers, who can be effectively removed from their jobs for a variety of reasons. Why don't we do the same to business executives? This type of thing is, morally, at least, criminal, bordering on treasonous. Just like you trust a doctor to look out for your best interest (well, not so much anymore), and your lawyer to represent you in the best manner possible, we should hold the men in charge of our investments to the same level of responsibility. The whole argument that, if you cut bonuses, the 'talent' will leave is crap on it's face; if this is the type of talent we lose billions for, they can starve in the street for all I care. I wouldn't trust the average CEO to run a lemonade stand for fear that they'd rob neighborhood children of their buck-and-a-quarters. American business has become not about solid growth and sustainability, but trying to rob shareholders of as much money as possible between economic setbacks.
You can fuck the middle and lower class, and do it over and over and over again. That's fine... that's America.
But then you start poking shareholders in the eye? Big mistake. NOW you're gonna pay.
The worst part is that this conduct is legally defensible. Investment banking has taken its place among the most corrupt professions in the business world.
please explain
... governing executive compensation.
Standard Republican mentality: that which is not expressly forbidden is entirely legal.
"so long as it is a republican doing it"
this is fraud and even a half decent attorney will nail them.
the execs knew years before the collapse what was going to happen and did nothing except get out after stealing.
textbook case.
a good lawyer can get a bunch of other people unrelated to those companies too. hear me greenspan, summers et al.
.."there's always risk in investment" or some such. You invest with a company based on levels of risk you're willing to assume/take on. High risk can mean high profits or catastrophic losses and either way; low risk means mediocre profits and but is safer for your investment. You sign away the idea that the investment broker is stealing money when you invest with him assuming all is above board and legal and the investment you're steered to is real. Madoff on the other hand was stealing and not investing; there's a difference.
Having said all of that, some protections from behavior like this should be in place. And, random thought, consider the disaster if w got his hands on our Social Security accounts; we would have retired with nothing.
Oh puleese...let's see...there are two now acceptable excuses
1) Ronald Reagan excuse "I don't recall". Now used religiously and accepted as a legitimate excuse.
2) Ken Lay excuse "I was unaware. I was deceived."
..it should be regulated, yes, but investing means risk! That the person one invests with is or is not a scurrilous individual is something you either learn up front or later on. I'm like a lot of people with investments: I lost a lot this past year and worst of all, I had to tap into those investments to make it through the year. I have a fund that has been worthless in the best of times but I don't blame the broker for its poor performance or my selection of it; I tooks my chances and I has to pay the price.
Falsified ratings by the ratings agencies, intentional targeting of uneducated and desperate people, undisclosed risks packaged into investments and much more.
Those are swindles.
Risk? You mean you can LOSE money by investing?!?! Nooooo...say it aint' so!
Markets go up up up!! Kudlow and Cramer told me so!!
but the CEOs stack the deck to eliminate their risk.
But the CEOs MUST make the money...or they will become disheartened...and quit their companies...and their companies will suffer...slowing our economy...costing jobs...and then....and THEN!!! The TERRORISTS WIN!!
Nooooooooooo!! AAAAAAAAAAAAAAAAAAAAAAAAAH!!!
.
so i got 8 replies and none of them are valid.
the ceos were not investing, they cashed out thier shares/options when they knew the shit was gonna hit the fan. that is insider trading and fraud because they did not inform thier shareholders. this is a easy case for a decent attorney.
next time i go to court i am going to ask to be accquited due to the law named some such.
note: these are not responses to your post.
if so, they would be responding to your orig post. as, if you notice, my post was in response to surfjac's post, not your's
just sayin'
Thinking there is going to be or we will return to an instant credit happy shopping speculative bubble is mass delusion.
If not, it's pretty darn good reporting (As would be expected from them).
http://www.pbs.org/wgbh/pages/frontline/credi...
but I do clearly remember myself thinking in 96 during the Tech Boom . . "no way this is going to last.. no way!"
Don't you remember all the smart people saying we had entered a "new era" and the economy wouldn't ever go down again?
the whole bunch of 'em!
That article was from 1997. Over ten years, two boom/bust cycles and trillions of dollars lost before Greenspan and his faithful flock realized their worldview might be wrong.
he must have been the first libertarian ever to have considered the remote possibility of him being wrong.
Most of them don't come to their senses regarding their hubris until they're in their deathbed.
Yeah...and they eliminated the business cycle!!
Of course, productivity over the years has skyrocketed while wages are actually decreasing.
Yup, they sure razed everyone's standard of living!
Higher productivity rates allow employers to give workers higher wages without raising prices.
This has to be the single stupidest statement ever made. These jerkoffs just made shit up and not only sold it to the public...they actually believe it...and still do.
I know, that's the amazing part. The fact that the people who benefit most from the system believe it is flawless is sad, the fact that people whose lives have been decimated by the system believe in it is fascinating.
I'll never understand my right-wing and "fiscally conservative" friends.
off this system to think it is "flawless." I would say it is expected.
The thing that I consider sad, it is the millions of idiots in the middle and lower classes who would fight to their last drop of blood to defend a system which does nothing but exploit and suck all their wealth for no return whatsoever.
The US will be the first society in human history, in which the exploited masses rise up in a revolution whose only purpose is to defend the interests of their exploiters.
...but also employment levels when seen as a function of productivity. Fewer workers + Higher Productivity + Lower Wages = High Profit Margins, and also economic collapse...
They tended to leave out little details such as what "efficiency" and "productivity improvements" really meant.
Little things like firing 25% of the staff, or offshoring the whole dept and firing EVERYONE.
Oh...and don't forget the evil UNIONS. Boooga booooga booooga!
They's distroyin' 'murica! Askin' fer those pesky little things like werk rules and pinsions.
...I belonged to was almost as bad as the corporations. $800 a year in dues, and all they guaranteed me was $0.10 over minimum wage (in fact the contract limited me to that) and health care that I could buy for $50 a month, but only if I managed to average over 36 hours a week, 3 weeks out of the month. The Union Chairman retired with a plan valued at about 5 million dollars.
But, I'd hate to see what the country looked like if we never had any unions...
Like so many things, a union is great on paper but you add the human element and it can become a corrupt and ugly thing. Much like Capitalism, Communism and marriage.
See below. I question his numbers.
because a couple of them got rotten.
I would to hear more about your numbers. Current minimum wage is about $15,000 per year, for a 40 hour week. That is not much.
If you paid $800 in dues that on that is over 5% which is LOT.
However in my experience work dues are 2 or 3%.
I also question that any contract would limit you to a number. My experience is that a CBA sets a minimum and not a maximum.
All of the aspects of a union CBA and the work dues, the organization and the terms of remuneration of the officers are subject to the democratic approval of the union members.
You vote to ratify the contract terms in a ratification vote before the contract is signed. In internal elections you vote to approve any bylaws which include the work dues and officer's compensation. These are enshrined in Federal law, if your union doesn't follow you a number of avenues of redress. Internal or the NLRB, the DOL or through the courts.
A corporation is a totalitarian regime. If you have no union, you don't get to vote on ANYTHING. There is very little you can do.
So I would tread lightly here.
...the dues were $200 a quarter for all members, excepting those under 18. Most in the union made good wages, and had better health options. I was in a low entry-level position that made up a very small percentage of the company and was largely dominated by high school workers who, under the union contract, were not required to pay union dues until reaching the age of 18. My situation was not average, I'll admit. The contract was ratified by majorities because it was good for the majority. Although, union redress often did go unanswered, as well... I am very pro-union. But to suggest that there are no problems and is no corruption is irresponsible.
Also, what happens to me if I refuse to tread lightly?
Where did I or anyone suggest that there are no problems and no corruption.
What I AM saying is the unions are organized by their members, not the other way around.
On second thought, I was being a little selectively ommissive to make a point. I apologize.
Living this life, when you are a working class person, is full of danger.
Your only power is through collective action which is what a union gives you.
Unions are only as good as the continued vigilance and concern of their members.
There are plenty of rats and they will scurry about if they get a chance.
But on the other side, the Capitalists are clear in their own minds that destroying unions, in other words, destroying the collective power of workers, is job number one.
They think about that from morning until night even though some of them seem pleasant enough to avoid outright harsh condemnation.
The big rats on their side would have slavery again if they could.
It is possible, just not in this country, yet.
...a thing that I think many unions, like any democratic organization of a large size, can sometimes forget it's purpose. That's a gut-feeling thing, though, so I could be wrong.
How old are you?
Quite young for the average of C&L readers, I'm sure. I've not yet reached the age of 40, chronologically, but will lay claim to "old soul" if it will increase my anonymous internet credibility...
My experience is the strong leaders have strong egos.
Corruption of spirit is a universal problem with human beings.
Corruption and ego do not necessarily go hand in hand.
There are no fail safe solutions or remedies.
The advice that Shakespeare gives Cassius is timeless:
...is end the constant intentional cycle of boom/bust that we've gotten ourselves into. Rapid growth cannot be sustained, but no one complains when we grow rapidly. What we need is slow, steady, sustained economic growth, not the "pocket in the pocket" mentality we've been espousing. We're about to hit a point where the average 'consumer' can't repay their debts, and that's when we really start going downhill. We've already begun to see business 'leaning' to increase margins, as well as massive capital hoarding, both of which will get worse without any government intervention. While 'the market' would likely self-correct, it would only come after a massive eradication of joblessness, one way or the other. Unlike government and taxes, large business can boost revenue by cutting employment. This is why we see unemployment continue steady or rise even as financial companies give record bonuses and the DOW start to rebound. It's not really tied into 'conditions on the ground', as it were.
...unfortunately, in order to accomplish this, an overwhelming majority of the American people would need to make significant changes in their lifestyles and stop depending so heavily on credit. To put it bluntly, that's going to go down like a cup of cold sick (as some of my British acquaintances might say).
It's not easy to stay conscious of the fact that even many poor people in this country lead lives of luxury in comparison with at least half of the people on this planet (especially in Asia, Africa, and South America). We've allowed ourselves to become so complacent in our prosperity that we've taken far too much for granted -- especially when you consider the fact that many of the privileges we enjoy come at the expense of some of those very same people in other countries who have considerably less than we do. Unfortunately, it looks as though the proverbial chickens are starting to come home to roost -- so much so that a growing number of Americans are finding themselves unable to afford true necessities such as food and health care. Yet for many years, when I've brought up these issues, I've been accused of being a socialist or worse...
I've been saying this for a couple of years now...I think that at least part of what we're seeing is the blowback resulting from nearly three decades of living in a culture virtually obsessed with immediate gratification and conspicuous consumption, one in which we're being constantly encouraged to want more instead of taking the time to appreciate what we have. At this point, a majority of people in this country are living beyond their means and are at least several thousands in debt in order to support a lifestyle which they appear to view as an entitlement. In the old days, there was a place for people like this...it was called "debtor's prison!" What people don't seem willing to acknowledge is the fact that when a majority of people are living on credit, the growth of the economy is fueled not only by consumer spending but also by interest paid on the money borrowed to drive that spending! Yes, some degree of debt is probably necessary in order to help stimulate economic growth -- but too much creates instability and results in "boom-and-bust" cycles. Sadly, human nature being what it is -- namely, all too prone to relying on the "quick fix" and believing in something for nothing -- I don't see a great deal of room for optimism that this will change as soon as it needs to, or indeed ever.
My belief is that a raising of the tax rate on income over a certain amount would force re-investment and disallow wealth hoarding. Also, require (and enforce) reporting of overseas holdings, and a fair trade tariff would go a long way toward a solution.
...is that investment (if you mean investment in the stock market) appears to be one of the primary elements responsible for the widening earnings gap between the middle class and the wealthy. "Trickle-down economics" is ostensibly intended to encourage the wealthy to invest more and thereby promote job creation which theoretically should produce benefits for the rest of the country -- provided, of course, that it isn't simply a smokescreen intended to disguise the fact it's an economic form of feudalism as some people believe it is. One of the flaws in this model in any case is that it relies too heavily on the assumption that when people are allowed to choose voluntarily and with impunity between self-interest and the common good, most or at least many will choose the common good. Unfortunately, social psychology is full of research studies which suggest that the reverse is far more likely to be true...which is one of the reasons why at least some degree of regulation is necessary in an attempt (even if not always successful) to keep people honest. It may be true that the government which governs best governs least because the people govern themselves -- but what works in theory often does not work nearly as well in practice, and the fact is that many people choose either consciously or unconsciously to not govern themselves.
Supposedly, one of the reasons why the gap between the middle class and the wealthy has grown so exponentially is the fact that the wealthy took advantage of "trickle-down economics" and invested in the stock market, but most of the jobs which were created as a result were not the sort which were likely to help the middle class make substantial gains. Based on what I read, the middle class by contrast invested their discretionary income in real estate which failed to increase in value at the same pace as the stock market. This is one of the reasons why I'm still somewhat unclear (and also somewhat skeptical) about how raising the tax rate will necessarily force re-investment in such a way that it won't simply exacerbate the gap between the wealthy and the middle class.
Except two comedians:
http://www.youtube.com/watch?v=mzJmTCYmo9g
A regulator:
http://www.pbs.org/wgbh/pages/frontline/warni...
and anyone with at least one foot in the real world. But at least we have Joe Scarborough to tell us who is truly at fault!
...you just weren't watching the right people!
(Susie Orman is a fraud)
these are yet two more ceo's in literally hundreds that have run companies into the ground; cut jobs and destroyed firms knowledge capital, market strength, R&D; blatantly looted the companies (anyone remember Eastern Airlines and Pan Am, along with countless companies 'restructured' - i.e., looted - during the LBO go-go years of the 1980s and into the 90s)... and all the CEOs walked away (after taking millions in compensation from these companies) with million dollar retirement packages or 'golden parachutes'... hell - just look at BoA's Kenny Lewis - after all the shit he oversaw there, he's collection a LIFETIME retirement package valued into the 100s of millions...
THIS is the 'capitalism' the political class and the corporatist carnival barkers (CNBS, Fox News, Beck, the tea baggers ad nauseum) spew and support... while the other 99% take it in the ass...
WE finance these guys through purchases, taxes, bailouts... and while they walk away ALL THE TIME with millions, they hold the proverbial 'free market' carrot in front of us, (falsely) making us believe we too can have that lifestyle... and then constantly restructure the firms we work for, offshore our jobs, and pocket the so-called 'savings' in always-increasing pay packages for themselves, while we get pushed ever down on the socio-economic ladder...
and the BEST part is: despite these criminals destroying and looting companies, because they're a member of the corporatist club, they'll eventually find a spot on the board or as an officer or a highly-paid 'consultant' for another company and the looting and criminal activity continues unabated...
They're wealthy and white, for chrissake!
The Amurkkan police/prison state holds it's true rulers above the law.
Stick to the imprisonment of kids smoking reefers, pregnant Latinas in shackles and negroes who've been proven innocent.
The power of nation-states has been eclipsed by the rise of the megacorporations.
Their CEO/Kings have stolen more loot than can possibly be spent in a single lifetime - in effect creating royal lineages of privileged assholes who have theirs AND yours and they want you to make them some more!
...is a goof.
Corporations and Govt working together is defined as fascism!
from the railroad barons in the 19th century, to the oil/steel lords of the 20th century, all the way to the financial masters of today--our political class has been beholden to the ruling class
Leeeeave the rich aloooooooone. Stop picking on the riiiiich1
stops being capitalism. Wow, ain't that convenient?
I love how the "personal responsibility" squad are always the best when it comes to pass the buck.
BTW, Fascism is a political ethos. Not an economic theory. Fascism tends to expect to work under a corporatist economic ecosystem, which is a version of capitalism. Whether you like it or not.
(YouTube) AP: China Executes Two in Tainted Milk Scandal
ralph cioffi was acquitted earlier this month...
Ralph Cioffi and Matthew Tannin, former hedge fund managers and co-heads of Bear Stearns Asset Management, were acquitted yesterday (November 10) of all six counts in their fraud trial” U.S. v. Cioffi, 08-CR-00415, U.S. District Court for the Eastern District of New York (Brooklyn).
who says justice isn't blind(ly tilted to favor the rich)?
As I recall the story ..
Benjamin Franklin took the chief from some American Indian tribe to Europe. There the Chief remarked on the disparity in wealth between the Nobility and the Peasants - "If this happened in my tribe we would kill all the rich people and take their belongings. Why don't these European Peasants do the same?"
hopefully we've learned enough from the storming of the Bastille and the French Revolution to take to the streets when we've had enough of this bull$hit! It's beyond me we haven't had that call to action yet...
Not enuf pain yet. Folks are still able to buy "stuff".
When a significant portion of the population can't buy the latest IPod, then they will rise up! Then Apple will lower the price by putting more underage Asians to work and we'll be happy again.
... it's just the teabaggers out to stomp out
that dadgum black fella in the White Housesocialists....from wage earners...
...and gives it to large banks and investment firms...
...should have his ass kicked...
...no matter what color his skin is...
most of the bail out happened during Bush.
Our biggest problem is the right-left populist split.
The Becks and Limbaughs have done a marvelous job of focussing the right-wing populist rage against the left, when in fact it's the very taskmasters who finance the Becks and the Limbaughs at whom the rage SHOULD be directed.
the sheeple are still too comfortable.
Sure a person has to work two jobs and has no healthcare and gets no vacation -
but most still have a roof over their heads. They have teevees that show them American Idle and Glenbeck telling them that it's all the libbrills' fault.
Old Skullpopper is cheap and plentiful and dulls the pain of work-related injuries and the pain of a troubled existence.
And then they can dream of becoming rich and being able to afford real hookers like their government representatives. Instead of having to inflate their mistress.
Was this before or after we slaughtered his tribe and stole his land?
lotto winner/invester acquaintance said he's finally getting about 1/2 his losses back with the stock market recovery. A friend of mine asked him if he was going to write Obama and thank him.
It was the hedge fund trading in the crude oil commodities market that precipitated the financial crash.
Yes it was a house of cards waiting to collapse, but I think it's important to remember what actually precipitated the crash.
They pushed the price of gasoline in the US beyond what people were willing/able to pay for it, and the whole world wide network of distribution choked.
...somebody desperately needs to do something about the practice of giving "golden parachutes" to top-level executives.
Conservatives and/or Republicans love to pontificate on how important it is for people to take "personal responsibility" stemming from their professed belief that people are motivated to work harder when they know that achieving what they want will be heavily or even solely dependent on their own efforts. This is the justification which they use to fight social programs such as welfare which serve the disadvantaged -- but it's interesting, isn't it, that they have no such objections to corporate welfare? If they truly believe in the importance of "taking personal responsibility" and its impact on motivation, then why aren't they just as opposed on principle to golden parachutes as they are to welfare? Answer me this...when a corporate executive knows that he has a contract which entitles him to walk away from the company with a hefty stake no matter what happens to it under his tenure regardless of whether he walks out or is forced out, where's his motivation to put forth any real effort for the company and the people who work there? Unless he's a particularly ethical person -- which in the business world seems to be a rara avis these days -- where's his reason to care what happens to the rest of the employees (who, it should be noted, all make a contribution in their own way to the success he's privileged to enjoy)? He and his are taken care of no matter what, even if the company suffers a serious decline in profits or even collapses completely while he's at the helm.
Don't get me wrong -- I don't see anything wrong per se with paying executives well, but I think it should depend much more heavily on performance. I'd be in favor of a system in which top executive compensation increases by a certain amount when profits and/or stock prices go up, but go down by a similar amount if profits and/or stock prices fall -- and if the company suffers significantly or collapses under that person's tenure, their compensation likewise goes down significantly. This would motivate them to do their best on behalf of the company and its employees, since their own income would depend on how well the company does -- and actually, I think this might have other less tangible benefits as well in terms of increased employee morale since the employees would know that they won't be the only ones suffering if the company experiences problems.
but I think it should depend much more heavily on performance.
Classic free market economics...it's ALL about performance. That's why the numbers were complete bullshit.
When the truth came out...these asshats should have resigned (if they had any real integrity) or been FIRED...at minimum.
The fact is that Wall Street bankers and financiers KNEW this was a house of cards. So, they are CRIMINALLY llable. THAT was the whole justification for declawing the SEC, that the MARKET would self correct.
How did that work out.
I'm not sure why Enron popped into my head....
Oh yeah, drop kick those CEOs right into a jail cell.
No one could have anticipated that well connected, wealthy, white people would have profitted during the universal screw-job that was the Bush Stock Market Crash.
...try 'em, convict 'em, sentence them to death and shoot 'em right after the trial.
The only good capitalist pig is a DEAD capitalist pig (providing he or she was tried, convicted and sentenced by a court of law, of course).
don't deserve a visit from Santa. They deserve a visit from the pissed off middle and lower classes.
"Nice painting you got here..."
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