Kenneth Feinberg, Special Master on Compensation Reform, cited 17 financial firms for “ill-advised” excessive payments to their executives while taxpayers were bailing their companies out with TARP funds. He called this “bad judgement.” Total of the bonuses and other executive payouts: $1.6 billion.
Interpol wants Sigurdur Einarsson, former chairman of Iceland’s failed Kaupthing bank. Iceland has already arrested the bank’s former CEO, Hreidar Mar Sigurdsson.
Mr. Einarsson, accused of counterfeiting, forgery and fraud, is said to be in London. The real Interpol wanted notice is here. There’s no reward but, if you find the guy, grateful Icelandic authorities will probably treat you to a glass or two of Brennivin.
The Securities and Exchange Commission (SEC) has sent a letter to a score of bank CFOs asking if they used the same maneuver as Lehman Brothers to cook the books during quarterly reporting periods. In the trick, called Repo 105, a bank uses a short-term contract (a Repurchase Agreement) to exchanges assets for cash, agreeing to buy them back later at 105 percent of their value, but the firm reports the resulting cash as if it were a straight sale. This gives the temporary illusion of bank soundness and profitability.
More:
“SEC: Did others use Lehman accounting gimmick?” AP via Salon.
“SEC to Banks: Who Else Used Repo 105?” Marian Wang, ProPublica.
“Do other firms use Lehman’s accounting ‘drug’?” Alistair Barr, MarketWatch.
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Goldman Sachs helped alleviate economic suffering by donating $16.2 billion to needy investment bankers. Its own. Company executives also committed a whopping 3% of that amount to help struggling small businesses. Strange; we thought New Yorkers always tipped 20%.
Goldman Sachs was saved from certain doom by the generosity of U.S. taxpayers, many of whom are now unemployed thanks to the machinations of Goldman Sachs. The company paid back the $10 billion in federal TARP funds that saved its assets. Why not? $12.9 billion of AIG’s federal bailout funds were paid directly to Goldman Sachs.
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Comments are welcome if they are on-topic, substantive, concise, and not boring or obscene. Comments may be edited for clarity and length.
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