Just when the heads of Bank of America, Bank of New York Mellon, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, State Street and Wells Fargo are being questioned on how they had spend their TARP money...
US bank bosses face Congressional hearing
WASHINGTON: US bank chief executives paraded before lawmakers on Wednesday to express remorse about public fury over their use of government bailout money, but insisted they had not lined their own pockets.
The heads of Bank of America, Bank of New York Mellon, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, State Street and Wells Fargo braced for tough questions at a hearing in the House of Representatives.
Underlining the sour mood, House Financial Services Committee chairman Barney Frank issued a stern warning at the hearing's start against public disruptions.
"There's a great deal of anger in the country, much of it justified," the Democrat said.
In their written testimony, the chief executives said they had not used money from the 700-billion-dollar Troubled Asset Relief Programme (TARP) to pay out bonuses and were in fact taking salary cuts.
"It is abundantly clear that we are here amidst broad public anger at our industry," Goldman Sachs boss Lloyd Blankfein told the House Financial Services Committee.
"In my 26 years at Goldman Sachs, I have never seen a wider gulf between the financial services industry and the public," he said.
"Many people believe - and, in many cases, justifiably so - that Wall Street lost sight of its larger public obligations and allowed certain trends and practices to undermine the financial system's stability."
A similar mea culpa came from Morgan Stanley CEO John Mack.
In his testimony, Mack said Morgan Stanley had maintained its capital cushion and delivered positive results in 2008 despite the financial crisis.
"But we didn't do everything right. Far from it. And make no mistake: as the head of this firm, I take responsibility for our performance," he said.
"I believe that both our firm and our industry have far to go to regain the trust of taxpayers, investors and public officials," Mack said, echoing the other CEOs in pledging to pay the government back quickly.
President Barack Obama and members of Congress have expressed deep anger over how the first half of TARP money was used, especially over hefty executive bonuses that continued to be paid out on Wall Street.
Treasury Secretary Timothy Geithner on Tuesday outlined a new bank bailout potentially worth up to two trillion dollars, but lawmakers are grumbling that Wall Street has yet to show it is mending its ways.
Merrill Lynch happily paid out one million dollars or more bonus to each of its 700 top executives...
Merrill Lynch's bonuses made 696 millionaires, probe reveals
WASHINGTON: Merrill Lynch quietly paid out at least one million dollars bonus each to about 700 top executives even when the investment house was bleeding with losses last year, a probe has revealed.
They were part of 3.6 billion dollars in the firm's bonus payments in December before the announcement of its fourth quarterly losses and takeover by Bank of America, the investigation by the New York state Attorney General's office showed.
"696 individuals received bonuses of one million dollars or more," New York Attorney General Andrew Cuomo said of the Merrill scandal in a letter to a lawmaker heading the House of Representatives financial services committee.
Cuomo said "these payments and their curious timing raise serious questions as to whether the Merrill Lynch and Bank of America boards of directors were derelict in their duties and violated their fiduciary obligations," according to a copy of the letter.
Bank of America said recently it was aware of the amounts and timing of the bonuses even though previous reports had suggested the top bank was surprised by the payout.
Cuomo said in his letter to Democratic lawmaker Barney Frank that his office was also examining whether senior officials at both companies "violated their own fiduciary obligations to shareholders.
"If they did, this raises additional serious issues with regard to the inappropriate use of taxpayer funds," he said.
"Merrill Lynch's decision to secretly and prematurely award approximately 3.6 billion dollars in bonuses, and Bank of America's apparent complicity in it, raise serious and disturbing questions," he said.
Shareholders and experts had expressed concern over Merrill's 15.3 billion fourth-quarter loss, which caused Bank of America to request a second round of government bailout on January 16.
Bank of America's shareholders voted to approve Merrill's takeover on December 5.
Former Merrill Lynch chief executive John Thain, Bank of America chief administrative officer J. Steele Alphin and other top executives have been summoned to provide testimony in the probe.
"One disturbing question that must be answered is whether Merrill Lynch and Bank of America timed the bonuses in such a way as to force taxpayers to pay for them through the deal funding," Cuomo said.
Cuomo said the Merrill Lynch bonus payment was "nothing short of staggering."
While more than 39,000 Merrill employees received bonuses from the pool, the vast majority of these funds were "disproportionately distributed to a small number of individuals."
"Indeed, Merrill chose to make millionaires out of a select group of 700 employees."
I am now crossing my fingers real tight that companies in Singapore are going to use their Job Credits the right way. Not "right-for-the-boss" right, but "right-for-the-workers" right...
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