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Where the Bush Bailout Went

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Anonymous

Guest
FATCATS getting fatter on the Bush/Paulson requested- Paulson run supersecret Bailouts....

January 22, 2009, 4:16 pm
New York Attorney General Scrutinizes Merrill Lynch Bonuses
Posted by Heidi N. Moore
New York State Attorney General Andrew Cuomo is investigating Merrill Lynch’s eleventh-hour bonus payments, a person familiar with the matter told Deal Journal.

Merrill Lynch executives, led by John Thain, accelerated bonuses to employees before Bank of America could interfere with the payouts, the Financial Times reported here and the WSJ reported here.

Cuomo’s office “will certainly examine closely the disturbing reports of what appear to be large, secret, last-minute bonuses,” this person said.

Cuomo has taken issue with Thain’s actions before. Late last year, he criticized Thain’s request for a $10 million bonus as “shocking” and wrote a letter of protest to Merrill Lynch’s directors.

“Clearly, the performance of Merrill’s top executives throughout Merrill’s abysmal year in no way justifies significant bonuses for its top executives, including the CEO,” Cuomo wrote in that letter.

Cuomo’s investigation also takes its place alongside a plaintiff’s lawsuit — the first of many, likely — filed today. Our brother Law Blog has the full report here, including this interesting paragraph from the complaint:

As reported in The Wall Street Journal, just three days after shareholders voted to approve the merger, on December 8, 2008, Merrill’s CEO John Thain addressed a meeting of Merrill’s Board of Directors. Thain reported that Merrill suffered significant losses in November, which Thain described as one of the worse months in Wall Street history. Despite the size of these losses, Thain told Merrill’s board the losses were in line with BOA’s estimates. Neither BOA nor Merrill, nor any of the Individual Defendants, ever disclosed any such estimates . . . to their shareholders in the Proxy Statement. Likewise, no loss estimates were disclosed in any subsequent filings.



Ex-Merrill chief Thain leaving Bank of America
Thain agreed to resign Thursday, just one week after BofA received $20 billion from the government to help the bank cope with Merrill's substantial losses.


By David Ellis, CNNMoney.com staff writer
Last Updated: January 22, 2009: 3:46 PM ET

NEW YORK (CNNMoney.com) -- Former Merrill Lynch CEO John Thain will leave Bank of America, the company said Thursday, just months after he shepherded a deal between the two firms during the height of the financial crisis.

Thain, who was set to oversee Bank of America's investment banking and wealth management operations following Bank of America's decision to buy Merrill in mid-September, met Thursday with Bank of America CEO Ken Lewis in New York. Both agreed that Thain should resign, a company spokesperson said.

Brian Moynihan, Bank of America's general counsel, will take over for Thain, the company said. Moynihan previously ran Bank of America's investment banking and wealth management businesses.

Lewis characterized Moynihan as a "strong manager" who can "effectively envision strategy and executive." He added that Moynihan's appointment did not indicate any change in the company's strategy or its plans for the newly acquired Merrill Lynch businesses.

"Those organizations, which formed the heart of Merrill Lynch, will continue to serve their clients as world class financial service providers," Lewis said in a statement. "We are quite happy with their performance since the merger."

Thain's exit marks the latest in a string of departures of top Merrill executives, a reflection of how difficult it has been for Bank of America to integrate the deal.

In December, Lewis threatened to scuttle the acquisition after his firm realized that fourth-quarter losses at Merrill Lynch would be much worse than they had originally anticipated.

But last week, the Treasury Department agreed to give Bank of America an additional $20 billion in funds from the controversial bank bailout program to help Bank of America digest the deal, which closed on January 1.

Merrill Lynch reported a loss of $15.31 billion, or $9.62 per share, during the fourth quarter, hurt by the turmoil in the capital markets following the collapse of Merrill rival Lehman Brothers.

"Mistakes obviously were made here," said David Dietze, chief investment strategist of Point View Financial Services in Summit, New Jersey, which owns shares of Bank of America. "Since Ken Lewis was the acquirer and John Thain was the acquiree, it was kind of inevitable that Mr. Thain, and not Mr. Lewis, would be the first scapegoat here."

Thain was initially lauded for helping to cobble a deal together with Bank of America on the heels of Lehman's bankruptcy.

Some believed the problems at Merrill Lynch were just as severe as they were at Lehman, and that the brokerage giant would have been the next to collapse had Lewis not stepped in with an all-stock takeover offer that ultimately valued Merrill Lynch at $19 billion.

But the reputation of Thain, who previously was a high-ranking Goldman Sachs (GS, Fortune 500) executive and CEO of NYSE Euronext (NYX), has taken a hit since last fall.

Thain, who worked for Merrill for less than a year, asked Merrill board members last year for a $10 million annual bonus, but agreed to forfeit that payment in December after facing heavy public criticism, most notably from New York Attorney General Andrew Cuomo. Thain also received a $15 million sign-on bonus when he joined Merrill.

In addition, CNBC reported earlier Thursday that Thain spent $1.22 million decorating his office last year, including an $87,000 rug and $28,000 curtains.

A spokesperson for Bank of America would not confirm the CNBC report but told CNN that these expenditures "apparently happened a year ago, well before Bank of America was involved."

"While we would not endorse that activity, there were other more important issues that led to John Thain's resignation," the spokesperson added.

Bank of America (BAC, Fortune 500) shares, which have fallen nearly 53% so far this year, tumbled an additional 13% in late afternoon trading Thursday.
 

Mike

Well-known member
That the same bailout that the Dems passed in the House & Senate?

You know, the one that Pelosi and Barney took all the credit for.
 

Sandhusker

Well-known member
Mike said:
That the same bailout that the Dems passed in the House & Senate?

You know, the one that Pelosi and Barney took all the credit for.

Mike, would that be the same one where Pelosi would not even allow alternatives to be discussed? The one that she chided Republicans of not voting for? Is that the "Bush" bailout?
 
A

Anonymous

Guest
Sandhusker said:
Mike said:
That the same bailout that the Dems passed in the House & Senate?

You know, the one that Pelosi and Barney took all the credit for.

Mike, would that be the same one where Pelosi would not even allow alternatives to be discussed? The one that she chided Republicans of not voting for? Is that the "Bush" bailout?

Yep-- the same one the Repub Congressmen refused to vote for if some stringent oversight and regulations was attached to how it was spent- and requirements were put on to require Paulson to report it to Congress/the public.... :wink:
 

Mike

Well-known member
Oldtimer said:
Sandhusker said:
Mike said:
That the same bailout that the Dems passed in the House & Senate?

You know, the one that Pelosi and Barney took all the credit for.

Mike, would that be the same one where Pelosi would not even allow alternatives to be discussed? The one that she chided Republicans of not voting for? Is that the "Bush" bailout?

Yep-- the same one the Repub Congressmen refused to vote for if some stringent oversight and regulations was attached to how it was spent- and requirements were put on to require Paulson to report it to Congress/the public.... :wink:

You're lying. Again. :roll:
 

RobertMac

Well-known member
Oldtimer said:
Sandhusker said:
Mike said:
That the same bailout that the Dems passed in the House & Senate?

You know, the one that Pelosi and Barney took all the credit for.

Mike, would that be the same one where Pelosi would not even allow alternatives to be discussed? The one that she chided Republicans of not voting for? Is that the "Bush" bailout?

Yep-- the same one the Repub Congressmen refused to vote for if some stringent oversight and regulations was attached to how it was spent- and requirements were put on to require Paulson to report it to Congress/the public.... :wink:
OTH(Oldtimer The Hypocrite), I realize you are mathematically challenged, but the Republican Congressmen aren't in power, don't have enough votes to change anything, and the Democrats could have passed the bail out without a single Republican vote.
It was the Democrats that gave Paulson COMPLETE CONTROL over how the money was handed out...part of it came back to pay for Obama's inauguration!!!!!
 

Bullhauler

Well-known member
Mike said:
That the same bailout that the Dems passed in the House & Senate?

You know, the one that Pelosi and Barney took all the credit for.

Gee the two Democrats from South Dakota voted against the bailout. But every conservatives wet dream John Thune voted for the bailout.
 
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