Corporate Crimes
I read in the paper today that John Stumpf, the CEO for Wells Fargo & Co., received over $12 million in compensation last year while the total return for shareholders in his company was down over 12%. If my math is correct, that means that Stumpf collected $1 million for every 1% the company stock lost in value.
Where can I get a job like that?
The former Bear Stearns CEO, James Cayne, collected $40 million in compensation in 2006 while his company and shareholders were headed for a train wreck.
Unfortunately, Stumpf and Cayne are the rule on Wall Street, not the exceptions. CEO pay in the U.S. is now 500 times the pay of the average worker.
So, you ask, where is the crime?
Talk to the employees and shareholders of Bear Stearns, the most recent victims of unchecked greed and corruption. One year ago their stock price was $170 per share. Yesterday, J.P. Morgan Chase & Co. bought the company for $2 a share.
In the last twenty years we’ve seen meltdowns because of financial mismanagement in junk bonds, commercial real estate, tech stocks, and now hedge funds and sub-prime mortgages. Investment bankers who should know better bought “nothing-down,” “interest only,” and “no documentation” loans and then sold them to institutionalized investors as mortgage-backed securities. In many cases these mortgage brokers took advantage of unsuspecting consumers or committed outright fraud.
We spend a lot of time in this country investigating and prosecuting crooks on Main Street. Maybe it’s time we spent more time investigating and prosecuting the crooks on Wall Street.
Where can I get a job like that?
The former Bear Stearns CEO, James Cayne, collected $40 million in compensation in 2006 while his company and shareholders were headed for a train wreck.
Unfortunately, Stumpf and Cayne are the rule on Wall Street, not the exceptions. CEO pay in the U.S. is now 500 times the pay of the average worker.
So, you ask, where is the crime?
Talk to the employees and shareholders of Bear Stearns, the most recent victims of unchecked greed and corruption. One year ago their stock price was $170 per share. Yesterday, J.P. Morgan Chase & Co. bought the company for $2 a share.
In the last twenty years we’ve seen meltdowns because of financial mismanagement in junk bonds, commercial real estate, tech stocks, and now hedge funds and sub-prime mortgages. Investment bankers who should know better bought “nothing-down,” “interest only,” and “no documentation” loans and then sold them to institutionalized investors as mortgage-backed securities. In many cases these mortgage brokers took advantage of unsuspecting consumers or committed outright fraud.
We spend a lot of time in this country investigating and prosecuting crooks on Main Street. Maybe it’s time we spent more time investigating and prosecuting the crooks on Wall Street.
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