USDJ Rakoff Rejects SEC-BofA Settlement.

Judge Rakoff wants the explanation behind why a Bank of America proxy statement last November misled investors about bonuses for employees at Merrill Lynch, which was about to be acquired by the bank. On Tuesday, he stated another desire: to get the SEC to better explain why had agreed to a settlement without pressing the bank’s executives harder. The judge is also questioning how anyone can judge the merit of a reliance on the advice of counsel defense, when the defendant has not waived the attorney-client privilege.

This is obviously a tough decision for the SEC, and is starting to suggest an apparent willingness on the part of the Commission to let a big player off the hook for serious violations with the payment of a significant sum of money. As we have said in the past, if this wasn't Bank of America, and instead was a small or regional firm, not only would the SEC be looking to put them out of business, prosecutors would be filing criminal charges. More>>>

Obama to Nominate Bernanke For Second Term

President Obama on Tuesday will nominate Ben S. Bernanke to a second term as chairman of the Federal Reserve, administration officials said. More>>>

AIG New CEO's $7 Million Salary

American International Group, the insurer that received billions of dollars in a U.S. bailout, said on Monday that it will pay newly-appointed Chief Executive Robert Benmosche an annual salary of $7 million.

AIG says that the Obama Administration's Pay Czar approved the salary.

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The Final Days of Merrill Lynch

The Atlantic explores what happened behind the scenes in the final days of Merrill Lynch, when the Wal-Mart of banking took over the former Wall Street powerhouse. A great read.

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Congressional Stock Trading Oddities -Time for Blind Trusts?

The controversy over Senator Durbin's stock transactions has put the spotlight back on stock market transactions by our elected officials. While Senator Durbin appears to have bought and sold stocks after the public announcement of the information he allegedly received, other odd trades are beginning to surface.

There are a number of reports of senators and representatives buying and selling stock at the time of important and significant announcements surrounding the government bailout programs last year. There are certainly problems with the claims of insider trading as I pointed out in my recent post on Senator Durbin's trades, which appear to be perfectly legitimate. The stories ignore the fact that many of these representatives have brokers or money managers who actually pick the positions that are bought or sold, and there are some who are actually in blind trusts.

But in a time when the American public is thoroughly disgusted with the conduct of our elected officials, and with the financial sector, isn't it time to address those perceptions and do something about the ability of elected officials to purchase or sell securities. Or to at least prevent them from doing so in industries that they have the ability to dramatically impact through legislation or other actions?

Blind trusts would appease some of the concerns without an outright prohibition, and is something that should be considered. Then again, it is these senators and representatives who would have to enact such a rule upon themselves. We will undoubtedly see term limits before we see a rule requiring blind trusts.

Wall Street job losses could top 200,000

Wall Street Job Losses - Wall Street has already laid off 110,000 people in 2008 as a result of the financial crisis, and some experts see that number reaching 200,000 by the end of the year. Goldman Sachs Group said Thursday it would cut 3,200 jobs, or 10% of its work force. 'Wall Street the way we know it is, frankly, gone,' said Michael Williams, dean of the graduate school of business at Touro College in New York.

The fault, dear Brutus, is in ourselves

An editorial at Investment News raises the point that "Wall Street Greed" is not the cause of the current financial crisis, although it is the current poster boy according to politicians.

Of course, it is always easier to blame someone else, but this article points out that we, the guy in the street, are partly responsible for this crisis.

The fault, dear Brutus, is in ourselves - InvestmentNews

Firms Report More Losses

As expected, the brokerage firms continue to report losses:

Raymond James Q4 Net Drops 22%

Merrill Posts $5.2 Billion Loss, Fifth In A Row

Financial Rescues Can Set Off New Problems

An interesting analysis of the unintended consequences of the financial bailout from the Washington Post.

Financial Rescues Can Set Off New Problems