Is that US vs Cioffi or US vs Bear Stearns? Do you need me to clarify for you a 5th time? And FYI, it didn't take two years for the govt to go after Enron, AA and Worldcom, now did it? In some cases it only took a few months. If the govt/SEC thought the whole subprime mess was related to fradulent behavior then they would be all over those firms....and not doing the total opposite....continuing to give them taxpayor dollars. And yep, I was an accountant there. I guess that means all of us were fradulent, lol. Your attempted insults don't work. I'm sure you can debate without trying to throw them out there, but maybe not. That takes a certain level of maturity.
Yeah you should clarify for me, because this prose thing isn't your strong suit. This is what you bolded and quoted for me: So I showed you somebody in Sr Mgmt. Now you are saying that all I did was show you somebody in Sr Mgmt...which is what you specifically asked for, and what you really wanted was an entity prosecution. Make up your mind. No...like i said in the Enron case it took them to infinity - as there was never an entity prosecution or SEC case against Enron itself - we've been over this multiple times now yet you keep repeating it....and again I should clarify that htere was never a criminal case against Worldcom, ,and that Arthur Anderson's prosecution was not for fraud....and finally that those cases are the exception and not the rule. How many more times do I have to explain this to you? The fact that you keep confusing all these concepts is why i figured out that you were probablly an accountant who had no real background in this area. Perhaps if you get some it will allow you to better serve your clients.
Once Twice Three times Four times Again, by this point I have already stated (numerous times) that my assertion is these banks did not default because of fraud, but instead for valuing their assets wrong and being stuck with them when the market tanked (again, not purposely). As in can you tie these firms to fraud for what you are asserting in this thread (they purposely screwed folks related to the subprime mess)? This should be quite evident to anyone with comprehension skills. Five times Sr. management, i.e. the company at large, i.e. a CEO like Ken Lay or Stan Oneal....i.e. not some dude that happens to have a high ranking....but someone that can make decisions for the company as a whole. I.E. A CAO or CFO that says "we are going to hide things off the books or misapply accounting rules this way", that impacts the firm as a whole and gets them sanctions. NOT ISOLATED INCIDENTS!!! Six times Seven times Yet, after 7 clear and concise explanations of what I meant, you hang your hat on: Even though I clearly clarify what I mean by Sr. Mgmt here and numerous other examples: Nice attempt spin master. Your credibility is shot. As far as the rest of your post: It didn't take them until infinity to hit Enron. Enron was no more, so they moved on to AA, their accounting firm. AA received SEC sanctions prohibiting them from doing public audits (which is what killed the firm) very quickly). As I noted, the govt moved fast in relation to Enron. Is a criminal case the only kind of prosecution out there? Did I, or anyone else ever say criminal charges had to be filed for the govt to think these dudes were fraudulent? You are the only one that keeps throwing civil vs criminal out there, in an attempt to ignore my point...spinmaster. The point is that the govt went after these firms that they thought fell due to fraudulent behavior, AND FAST. That isn't the case with these companies in trouble due to the sub-prime mess. You saying "it's civil vs criminal" doesn't change the fact that the govt has shown a history of moving in fast when they think there is fraudulent behavior by an entity. AA was convicted of obstruction of justice for shredding documents related to its audit of Enron. That is fraud related. Granted this conviction was eventually overturned, but the damage was done by then. You clearly don't know what you are talking about. Now if you want to hang your hat on those 3 incidents being exceptions then that's a different argument. I highly doubt you will find anywhere here to support that argument either. I'm not confusing anything. I have repeated my quite simple point a good 7-8 times. The only thing I'm not doing is allowing you to get away with your silly attempts at spinning folks posts.
^ You could have saved yourself a lot of time by just explaining the following which illustrates why you are confused (oh and yes I admit, I have been disregarding large swaths of your posts when it became apparent that you were a complete novice in the area - plus your posting style is confusing and hard to read): Sr Mgmt i.e. the company at large made a move to deceive When you say "Senior Management" instead of talking about "Senior Management" - which, to a lawyer, and arguably any logical reader- means the officers of the corporate entity (and/or the board members ), you are - for some bizarre reason not based in law or fact - conflating it with the company itself. Is this because of some vague primordial concept of control person liability that you are referring to under Section 20? Oh wait, I forgot, you don't what that is. You have to very precise - these are precise terms. When lawyers (and business people) say "management", we are referring to the people who run the company. When we talk about "the company" we are talking about the corporate entity as a legal person. A 10b-5 case, for example, can be brought by shareholders against the corporate entity, as well as against "Senior Management". Other kinds of cases, shuch as derivative cases, can only be brought against Senior Management and not be brought against the company. i've explained to you many times why entity prosecutions are generally disfavored. However I wouldn't be surprised to see them in this case - there are already hundreds of pending private fraud cases (against both the ENTITY and SENIOR MANAGEMENT - which are different things legally speaking). In my years of experience in the area, in contrast to your complete lack of experience - these things take quite a bit of time. Now since I explained this to you patiently - answer me this, Icehouse. What was the extent of your legal training? Was it a class at Texas Tech or a Seminar when you were counting beans?
P.S. - I should add that when in court, if your opponent is reduced to sputtering that you are "a SPINMASTER!!!!" repeatedly - it generallly means that you've won the argument. I declare myself the victor of this thread. Again.
Woh, now this is news. I'm not a lawyer or anything, but this is certainly a new development. Apparently being subpoenaed is now equal to commiting fraud. Boy I sure haven't kept up with the times. You know who else got subpoenaed? Steele Alpin. Ken Lewis is likely next. Did they committ fraud too? Just making sure. And that's not all, apparently giving bonuses is now fraud. Now according to John Thain (and I don't care to approve or disapprove of tha claim), Merrill paid the bonuses with the full knowledge and approval of Ken Lewis. So assuming his right, you missed your target by a mile... again. That's just hilarious. This coming from the say idiot who couldn't find a single MBS that was fraudulently mispriced (in large party because he knows jacksh1t about them) and now has to move on to fraud in general. SamFisher... a legend in his own mind.
Actually I defended a case in front of Judge Scheindlein over one back in the early part of this decade. All right, defended was an exaggeration since I was a first year, so I guess I would be like "third chair", but imagine that!
And let me guess, you got shu-shed and was told "you're lying. I can tell when somebody's lying." Don't take it personally.
that is what the judge said, we settled that case fast even though we weren't. though maybe we were, I don't know.
Sam, I have no problem admitting that I have no formal legal training (as far as law classes, courtroom experience, etc). However, I have tons of experience dealing with corporate entities and all the compliance (i.e. LEGAL) type of regulations that we can get sued for (i.e. what constitutes us committing fraud...believe it or not they train us on it 24/7 so we don't commit it, on accident or intentionally...or so you can catch it while you perform audits). This comes from both sides...as an auditor and for the company. So your assumptions that I don't know what I'm talking about are way, WAY off base. The fact that you think an auditor doesn't know what constitutes securities fraud, or that a bank employee wouldn't know....shows that you really have no clue what you are talking about (i.e. assuming only lawyers know about this stuff). What's next, are you going to tell us insurance agents don't know about the laws that they can get them sued for, or homebuilders, or any other profession. Again, I explained what I meant by "entity" and "Sr Mgmt" in multiple posts (the company as a whole for their control environment, those with the power to set corporate policy for things like accounting regulations or to hide stuff off the books like Ken Lay or Oneal or Skilling, etc). Again, this was clarified more than once. You can try to go with the "that's not the legal term" or "your posts are hard to read" spill if you want, but no one is buying it. Especially when you admit yourself that you have disregarded most of my posts. In all of my years on this board I have never had someone tell me my posting style is confusing or hard to read. I doubt you will find anyone to agree with you that the 7 or 8 examples that I just posted are confusing or hard to read. Now feel free to make another spinpost using some legal terms or the cases you worked on so you can claim folks don't know what they are talking about...but again...we aren't buying it. And you can "declare" yourself the victor all you want. T-Mac declared himself in shape earlier....we all knew he was full of it too.
http://www.nakedcapitalism.com/2009/01/wall-street-quakes-at-threat-of-400000.html Wall Street Quakes at Threat of $400,000 Pay Cap Today, Senator Claire McCaskill of Missouri introduced legislation that would limit salary, bonus, and stock options for executives as financial firm recipients of bailout funds be limited to the President's level of pay, currently $400,000. McCaskill's proposal is likely to go all of nowhere. She is not a member of the Finance or Appropriations committee, so her proposal is more a shot across the bow than a serious initiative. And given that "executive" is generally defined as the five most highly paid corporate officers, the ones whose remuneration is listed in the proxy statement, it covers only a trivial number of employees. But her bill is getting a lot of media coverage, which means it could serve as a starting point for negotiations. It has become a benchmark as far as the public is concerned. So how reasonable is it? The problem is that too few people in the industry have any memory of what bad times were like, and the last few years were so grotesquely rich (in terms of pay, not risk adjusted performance) as to have distorted industry participants' sense of reality. The pretext for the largess was that the really good people would decamp to hedge funds, so pay had to be ratcheted up to those levels (John Whitehead, former co-chairman of Goldman, dismissed that idea when the bubble was at its peak). Bear in mind: the bonuses paid in 2008 in New York, when all the big domestic players and most of the large foreign firms (who constitute the bulk of employment) were on government life support, were the roughly the same as in 2004, which was a good but not stellar year. I'm not certain of the headcount differences then versus now; with the loss of Bear, Lehman, and a lot of headcount cuts industry-wide, I doubt that employment is much above 2004 levels. Since people are generally not too open about pay (and tend to exaggerate to boot), I have only a couple of datapoints, but I think they are germane. Anyone with relevant info from the last downturn is encouraged to speak up. The dot bomb bust was bad on Wall Street. To give an idea: I went to see a friend in the search business in 2002 to get his insights about a company he knew. He had two neat stacks of unopened letters on a credenza behind his desk, each roughly 2 feet high. I asked about them. He explained he was getting an enormous amount of letters from job-seekers (and mind you, his was a very small firm). He didn't bother opening them, since he knew or could find plenty of good people and employers preferred to hire the employed over the unemployed. The letters were from unknown quantities and there was no reason for him to try to weed through them. So why did he keep them? In case someone connected called him to ask him if he had received the resume of his good buddy. Then he would dig through the pile and give it a (usually obligatory) look. One of the hard hit businesses was mergers and acquisitions. Keep in mind that M&A is a fee business; the professionals do have overhead (salaries, travel, secretarial, computers and software, access to databases) but they don't use capital and they require less infrastructure than trading operations (which have trading stations, data feeds, lots of software and valuation modes, risk management, sales forces, back office). Now admittedly, in boom cycles (the late 1980s and the last few years) Wall Street messes up this nice model and decides to try to gain a leg up in M&A by risking its balance sheet (committing to lend to fund deals). That always leads to ruin. But that gets reined in during bad times, so let's think of the traditional, high wits, low overhead version of the business. I'd welcome any other inputs, but the people I knew in M&A (senior MDs running what had been high profit industry groups, so the top of the food chain in that business) were cut back to $400,000. And they were unhappy but not disappointed, if you can appreciate the distinction. They of course hated that they had to keep trying to do business when there was no business to be had. Tilling a field during a drought is not pleasant. But they were grateful to still have a job, to not have been demoted, and knew intellectually that their pay was fair in light of current conditions. Assume 3% inflation. Compound $400,000 forward to 2009. You get roughly $500,000. M&A is a talent business. You need pretty highly developed skills to master the technical aspects and be credible with CEOs. The top people can and do set up or join boutiques (although some recent ones overlarded with talent, like Perella Weinberg, haven't done as well as the older boutiques, like Greenhill & Company). Traders will argue that level is too low, that if they make $30 million for someone, they deserve a bigger cut. No dice, Unless you are willing to pay back your share of losses, I don't accept the logic that you are entitled to a asymmetrical pay deal. You may have been lucky enough to extract that, but what you can get in good times (or from chumps) and what you deserve in a more abstract sense are two different things. You are playing with other people's money, and that carries with it substantial responsibilities (or at least it should, but management heretofore has been complicit in pretending that it doesn't). Warren Buffet, in his reinsurance business, had a simple formula: his execs got a pool of 15% of the profits on deals written 5 years earlier, ex any losses on the same pool. Five years was long enough for the vast majority of deals to prove themselves out. I could see a variant of that formula for traders. Say you do make $30 million in profits in year one. You get a salary and only 1/10 of your cut that year in cash. The rest is deferred. Any losses in years 2-5 get deducted (the deferred portion can be invested in a high or low risk manner at the choosing of the trader, so there would be some income on the deferred amount) Any remainder is paid out. Now that would take some tweaking (t creates an incentive for a trader having a super year to change firms, for instance), and there may be better ways to achieve the same end, but you get the drift: you can't have people who take serious risks with capital enjoying "head's I win, tails you lose" arrangements. Either they rewards have to be reined in substantially so they have less reason to take big gambles, or they need to share more in the downside. The threat to contain pay is serious enough that Wall Street may have to find a way to deny its reflexes and exercise restraint. This is going to make for some interesting theater.
Boy it's been a bad week for MFW Great piece in the NY Times today detailing the disastrous tenure of Thain at Merrill and his attempts to loot the company for an extra $40 million on the way out the door. http://www.nytimes.com/2009/02/08/business/08split.html?_r=1&scp=2&sq=thain&st=cse PS - you got problems with Geithner? Thain was McCain's prospective Treasury secretary, lol.
Do you really want a guy with tax issues in that spot? Not only that, he apparently has honesty issues because I just don't believe that he did not understand the IRC.
