Friday, September 28, 2012

One more reason why I’m critical of the finance business


One more reason why I’m critical of the finance business


Bank of America settled a class action lawsuit for $2.43 billion for having misled investors about the Merrill Lynch merger.  Hard to fathom how the SEC agreed to settle the similar charges for $150 million.  That’s not my central point.

I went to the New York Times web-site and searched on the terms “Bank of America” and “settlement” and stopped after ten pages (I was getting tired).   I came up with 20 separate settlements worth a total of $22 billion in payments.  Now the bank neither admitted or denied the charges in most, if not all, these settlements, but the list of allegations includes all kinds of bad conduct: improper collection of fees on overdrafts, big-rigging on bond auctions, a variety of mortgage claims, several securities frauds, money laundering violations, improper trading, etc. etc. 

This list is probably far from complete and doesn’t include any claims that are pending.  Moreover, it only covers the last 8 years.  I’m sure I could come up with the same laundry list for every other major banking institution.

These institutions may be “too big to fail”, but they clearly are failing their shareholders, customers, and the taxpayers.

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