The SEC is cowardly trying to explain away why they only fined BOFA $33MM. Its really frightening to see and hear Linda Shapiro and the SEC goons tell the Judge that $33MM is enough punishment for letting greedy incompetent Merrill executives get $3.6B in bonus money.
Regulators claimed that Bank of America had said in its proxy statement that it would not pay out bonuses to Merrill employees in fiscal year 2008, when, in fact, the bank authorized bonus payments of as much as $3.8B to Merrill employees. Then is a recent filing, BOFA "suggested" that investors should have already known about the bonuses given the media attention surrounding the merger after it was first announced last September. In addition, the bank pointed out that Merrill disclosed the size of its bonus pool when it reported financial results earlier that year. First BOFA gives too much credit to investors, investors only care if the stock price goes up, BOFA could be in the kiddie porn business, as long as the stock is in upward trajectory, all is good. Secondly, Merrill earlier in the year had set the bonus pool when the mortgage market wasn't on life support. Bottom line here, Ken Lewis and the honchos at BOFA had a hard on for Merrill Lynch for a decade and wanted the company at any cost. So John Thain and Lewis hammered out the deal while hammering the shareholders in the process. When Lewis realized they he was the one being screwed, he changed course.
The Judge in the case expressed concern about the SEC's apparent unwillingness to single out any individual at either firm for signing off on the payments, and the possibility that the settlement would be paid using bailout money from U.S. Taxpayers, namely himself.
The SEC said that the $33 million fine "strikes the right balance between the goals of deterrence and the need to avoid unnecessary harm to existing shareholders."
Why would any of this surprise anyone? The gals/guys at the SEC need to make a living after they do their public service, where would they work?
A lot has been said about the lack of volume that has ramped up indices. What is truly mind boggling is the volume is being dominated by crappy stocks like C, AIG, FRE, FNM, & CIT.
These 5 stocks make up nearly 30% of the total NYSE volume on any given day. Also AIG generally trades its entire public float on any given day.
You would think this would be a red light for regulators. Silly Rabbit! Markets are going up! Shut Up!
We know that there is forced short covering, forced margin buying going on. The HFT Machines need stock to trade, so the stock loan departments call in all stock on the short side. Algorithmic trading has taken over 100% in the financials and corresponding ETFS. All done to paint the tape and collect rebates, while the overall market floats higher on zero volume. This all puts the simpletons in a better mood, so that the big boys can lower the boom later.
You would think the SEC would be worried that just 5 stocks make up 30% of trading volume, no collusion here, this is just normal behavior on Wall Street...You got that right.
But wait they are on it. When the markets eventually get smoked and stocks start to retreat led by the financials, they will come out promptly re implementing the uptick rule. When Goldman, Morgan, Citi, and BOFA start to get walloped, they will prohibit short selling in them as they did before, all in an attempt to stabilize Skynet.
tradersutra.blogspot.com/2009/03/uptick-rule.html"
6 Months from now, everyone including Obama will say what a great job the SEC led by Linda Shapiro did to stabilize this pig of a stock market.
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