Even a dog knows the difference between being
stumbled over – and being kicked. But do you think imperious and obtuse Wall
Street bankers would even feel it if they got a kick in the pants?
Jed Rakoff, a federal judge in New York City,
decided to find out. Earlier this
year, lawyers for Bank of America and the
Securities and Exchange Commission strolled into Judge Rakoff's courtroom asking
him to ratify a legal settlement between the bank and the watchdog agency –
usually a routine matter. But this case involved the $3.6 billion in executive
bonuses that a subsidiary of Bank of America had doled out last year – even as
the bank was getting a $45-billion taxpayer bailout.
Worse, the bankers had lied to their own
shareholders about it – a boo-boo that violates SEC rules. But our watchdog had
no bite and very little bark. The agency assessed a measly fine of $33 million,
which is less than the individual bonuses that some of the bankers had
To the astonishment of those who made this shameful
sweetheart settlement, the judge refused to rubberstamp it. Instead, he demanded
the names of each executive responsible for the bonus ripoff, saying they should
be held personally accountable for their crimes. In two hearings before the
judge, the bankers and the SEC bobbed and weaved, shucked and jived, trying to
But Rakoff, was not to be trifled with. Invoking
America's notions of morality
and fair play, as well as channeling the public's
rising anger over Wall
Street's greed and Washington's meek complicity in
that greed, the judge voided the settlement on September 14.
Now, Bank of America and the SEC face a public
trial over the whole sorry mess they created. At last, a judge has kicked back
at some of the financial system's greedheads and incompetents – and, yes, I do
think they're feeling it.