Can you bring me up to date on the actions being taken in the USA about bank executives,...?...please? I keep hearing that in the USA there are lots of actions being brought, by all sorts of parties, against bank executives. On this side the pond, there's anger, but very little threat of action (although I've just heard a radio commentator suggest that some of them should be lined up against a... | |
After the election, you'll probably see more government action. In some cases, certain entites have already "settled" with government agenies in exchange for more cooperation into deeper investigations. For instance, the Washington Post reports that Fannie Mae has avoided criminal charges related to its accounting. The executives are still on the hook and under investigation (probably more after the election on them). The immunity is only from government entites and not private parties.
Sam Buell, the former federal prosecutor who spearheaded the 2004 prosecutions does not believe there will be too many individuals under the chopping block in this case; the matter is just too big. Still, the country is looking for someone to point the finger at, so watch for someone to be sacrificed. According to the financial rumor blogs, there are about 100 stock brokers out there who engineered this and knew exactly what they were doing. Watch for anoher book like "The Smartest Guys in the Room," in which some detail will be given as to who these people are -- I'm afraid if the rumor is true, there will be a few folks going to the "Steel Chateau" instead of Aspen this Winter.
No one wants to be seen as partisan, so for the time being, most of what's being done is at the private level. For instance, a Ney York firm, on behalf of investors, brought a class action suite against, Merrill Lynch, Pierce, Fenner & Smith Inc., Citigroup Global Markets Inc., Morgan Stanley & Co. Inc., UBS Securities LLC, Wachovia Capital Markets LLC, Stephen B. Ashley, Daniel H. Mudd, Stephen M. Swad and Robert J. Levin in the United States District Court for the Southern District of New York.
The lawsuit claims that these entities concealed information necessary to investors to make a reasonable decision about the stock. In effect, the suit alleges fraud. I suspect that public opinion being what it is, and justice not always being blind, the shareholders will be vindicated and these companies will be required to pay something.
Finally, though nothing is being done at present, there are folks like financial guru Suze Oreman who are clamoring for prosecution of executives, but that just has not happened yet and probably will not for several months. After November, things will heat up. American, generally can only do one thing at a time, and right now, we're busy hating each other over our selection for president. Once that battle is over, we'll get back to the business of running the country.
