Nearly a dozen banking giants, including Merrill Lynch & Co., Citigroup Inc. and Bank of America Corp., paid out more than $32.6 billion in bonuses in 2008. At the same time, the banks were accepting $175 billion in taxpayer funds through the Troubled Asset Relief Program. A report, released by New York Attorney General Andrew Cuomo, analyzed the original nine U.S. banks that received TARP funding in 2008 and concluded that even though the banks’ profits fell drastically, they continued to pay out large bonuses. I would have thought the top officials with these banks would have learned their lesson. But apparently not, and their greed continued to override their judgment of fair play.
In the report, entitled “No Rhyme or Reason: The ‘Heads I Win, Tails You Lose’ Bank Bonus Culture,” the Attorney General’s office analyzed 2008 bonuses at nine banks that received TARP financing from the U.S. government. Citigroup and Merrill, since taken over by Bank of America Corp., received TARP funding totaling $55 billion. Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co. paid out a total of $18 billion in bonuses in 2008, while receiving a combined total of $45 billion in taxpayer dollars through TARP. In 2008, the three firms earned a combined $9.6 billion last year, according to the report.
It’s absolutely impossible to justify the TARP funds being used to pay bonuses to officers or employees of banks that recorded billions of dollars in losses. For example, Citigroup and Merrill Lynch suffered losses of more than $27 billion at each firm, according to the report. Even so, Citigroup paid out $5.33 billion and Merrill $3.6 billion in bonuses.
Source: Law 360 and TransWorld News
Contact us today for a free legal consultation with an experienced attorney.
Fields marked *may be required for submission.
If you would like to subscribe to the Jere Beasley Report digital edition, simply visit our Subscriptions page and provide the necessary information or call us at 800-898-2034.
Attorney Advertising - Prior results do not guarantee a similar outcome.