Ritholtz’s Short List of Prosecutable Banking Execs
Barry Ritholtz, author of one of the leading finance blogs on the web, The Big Picture (also listed on my blogroll), is not one to shy away from calling out Wall Street. As such, it’s not surprising that in a recent blog post, Ritholtz shared his short list of banking executives who pocketed money that was likely based on false or misleading or even fraudulent accounting of quarterly earnings statements for the 2007-08 period.
Here’s his list:
• Bears Sterns (
BSC) former chairman Jimmy Cayne, rescued by a $29 billion Fed shotgun wedding to JPM, received $60 million when he was replaced.
• American International Group (AIG) chief executive Martin Sullivan got a $14 million compensation package in 2007. Robert Willumstad was handed $7 million for his three months at the helm..
• Morgan Stanley (MS) Chief Financial Officer Colin Kelleher got a $21 million paycheck in 2007, but in 2008 Morgan Stanley received expedited approval to become a banking holding company in 48 hours — record time. I would spend some time reviewing that if I were head of SEC enforcement.
• Countrywide Financial’s (
CFCfounder & CEO Angelo Mozilo, cashed in $122 million in stock options in 2007; His total take is estimated at over $400 million dollars. The SEC charged (Civil, not Criminal) Mozilo with Insider Trading, and settled for $67.5 million.
• Merrill Lynch (NYSE:MER) Stanley O’Neal steered Mother Merrill into financial collapse, was taken over by Bank of America. His exit package was $160 million.
• Bank of America (NYSE:BAC) acquired both Merrill and Countrywide. Stupidity isn’t criminal, and for his genius in nearly destroying BofA, CEO Kenneth Lewis brought home $25 million in 2007.
• Fannie Mae (FNM) CEO Daniel Mudd received $11.6 million in 2007. His counterpart at Freddie Mac (FRE) Richard Syron, brought in $18 million. They certified their quarterlies under Sarbanes-Oxley just like other CEOs right up until the point they became insolvent and were nationalized by the Federal government.
• Washington Mutual (WM) WaMu chief executive Kerry Killinger received $88 million in compensation between 2001 and 2007 — just before they collapsed in a heap of subprime and were sold by the FDIC to JPM.