Fines, Slaps on the Wrist & Business as Usual

Anyone else notice G.E. was fined $50 million? That's chump change for G.E. They spent $200 Million in legal fees trying to fight it.

We had BoA fined $33 million for Merrill Lynch bonuses. How big were those bonuses? $5.8 billion.

Earlier the SEC fined Stanford group, didn't deter much of anything as noted by the final arrests and $8 billion in fraud.

This problem goes way past Wall Street. Most fines and violations are more like a speed bump slow down as corporations throw change at the toll booth.

Thanks for your ante, thanks for playing. If there is no consequence why bother to follow the rules?

If you think this issue is new, it's old, well researched that fines are not a deterrent as long as it is more profitable overall.

For historical purposes, Forbes had a Wall Street fine tracker from 2004 to 2001. Note how much this deterred risky behavior. Recognize any familiar names?

Oh yeah, BoA has about $45 billion in TARP funds. Are those fines robbing Peter to pay Paul...and Paul's CEO, CTO, CFO, COO....

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Where are the shareholder lawsuits?

That may make a difference. GE SEC violations sound pretty serious and particularly misleading - Worldcom-like. If I was a shareholder I would be pissed.

SEC fines are a slap on the wrist because that is the capitalist system we operate in - theoretically any deterrent or punishment will be dealt with in the "market". The problem is that the damage will have been already done and good luck disgorging any misleading gains or profits from companies or executives.

In the case of GE, if this prompts further investigation and lawsuits it may uncover how serious the violation were. It may hurt their credibility and more analyst may question future earnings reports from GE. - Financial Information for the Rest of Us.

Something fun - CNN's "scatter plot" on Obama's econ moves

This is hilarious, a graphic rating Obama's economic successes/failures looks like a scatter plot.

another slap on the wrist, AIG ex-CEO pays $15 million

New York Times:

Federal regulators accused Maurice R. Greenberg, the former chief executive of the beleaguered American International Group, on Thursday of overseeing deals that fraudulently overstated A.I.G.’s financial position, charges that came after a four-year investigation.

Mr. Greenberg, 84, will pay $15 million to settle the suit, an agreement that was announced simultaneously as the government described the charges against him.