Grade the following statement, made in 2000 by the Honorable Louis Stanton, the judge hearing the Bernie Madoff civil case:
Second, a stock split divides only the outstanding shares of a corporation. “Delaware law, which is controlling under the terms of the Agreement, defines `outstanding’ stock as that which can be voted and therefore is `construed to mean stock in the hands of shareholders, not stock in the treasury.’”
(Satterfield v. Monsanto, 88 F.Supp.2d 288, March 27, 2000).
Is His Honor correct?
If not, why not?
Extra Credit: In light of this, is Judge Stanton competent to handle the complex Madoff civil case now before him?
88 F. Supp. 2d 288.pdf
Earlier: Ponz. Boy Settles
We were, of course, worried when the rumors started that investors in Bill Ackman’s “All Target, All The Time” fund might face limits on withdraws. We just knew it wouldn’t turn out that way. That wasn’t like the Bill we know.
William Ackman told investors in a hedge fund that invests only in Target Corp. he’s “deeply disappointed” in its performance, and that those wishing to exit can do so in full next month.
“I apologize profusely for the fund’s results to date,” Ackman said in an investor letter dated Feb. 8. Ackman also offered a fee waiver for those who invest in his other Pershing Square funds.
Call us WA! We love you!
Ackman Apologizes, Says Investors Can Exit Target Fund in March [Bloomberg]
Those of you doing research for a collection of forthcoming memoirs on the topic of being violently gang-raped know all too well that Bank of Amerillwide will be paying out bonuses for last year’s work until 2012. Today we’ve received word that this adorable exercise has an official name. Disappointingly, it’s not very fitting or descriptive, though we’re sure you people can come up with something better.
Bonus pay, which was down on average about 80%, will be paid through a series of deferred vesting periods with staff set to receive the first 6% of the cash payout next month, followed by a set of subsequent cash payments over the next three years, Financial News has learned.
Seventy percent of the Bank of America bonus pool is being placed into a new plan called Additional Principal Programme, the first third of which will be paid out through a series of quarterly payments this year, followed by a second and third payout in February 2011 and February 2012.
The remaining 30% will be paid through an Equity Deferral Plan, which will be decided on sliding scale depending on an individuals total pay. The first vest from this pool will be next February, with staff receiving a third of their stock, this will be followed by two further vests in 2011 and 2012.
BofA sets up deferred pay scheme as bonuses fall 80% [WB]
…the most meaningless case on his plate.
The United States Securities and Exchange Commission announced that on February 9, 2009, it submitted to the Honorable Judge Louis L. Stanton, a federal judge in the Southern District of New York, the consent of Bernard L. Madoff to a proposed partial judgment imposing a permanent injunction and continuing relief previously imposed in the preliminary injunction order, entered on December 18, 2008. Madoff consented to the partial judgment without admitting or denying the allegations of the SEC’s complaint, filed on December 11, 2008. If the partial judgment is entered by the Court, the permanent injunction will continue to restrain Madoff from violating certain antifraud provisions of the federal securities laws. Also, the proposed partial judgment would continue against Madoff the relief imposed in the December 18, 2008 Order, including the order freezing assets. The proposed partial judgment would leave the issues of the amount of disgorgement, prejudgment interest and civil penalty to be imposed against Madoff to be decided at a later time. For purposes of determining Madoff’s obligation to pay disgorgement, prejudgment interest and/or a civil penalty, the proposed partial judgment deems the facts of the complaint are established and cannot be contested by Madoff.
Securities and Exchange Commission v. Bernard L. Madoff and Bernard L. Madoff Investment Securities LLC [SEC]
If you know anything about us, you know we’re big fans of getting up in people’s faces all self-righteously, and if there are coordinated tee-shirts to speak of, all the better. So we were delighted to hear of some organizing going on up in CT this weekend, though sorely disappointed to not have gotten in on that shit ourselves. The Stamford Advocate reports that hundreds of protesters from the Neighborhood Assistance Corporation of America gathered outside the home of William Frey, CEO of Greenwich Financial services on Sunday, in order to “denounce predatory mortgage lending practices.”
The event is apparently part of a “national accountability campaign” aimed at getting Frey and his ilk* to support refinancing loans. Sunday’s message was underscored by the yellow T’s at left, bearing the slogan “Stop Loan Sharks,” with a picture of a rather menacing one, which was thought to be the brain child of Greenwich resident and event participant S. Cohen (who was sadly talked out of the idea of tossing an effigy of Frey in the Hirst tank, “just to show them we mean business”).
Somewhat oddly, the group apparently made a stop at Morgan Stanley CEO John Mack’s home in Rye before Frey’s to shout about the same issue, but perhaps that was merely a matter of organizers needing to stretch their legs during the interminably long Metro North ride, and not part of the ‘people who a thin argument at best can be made to blame’ segment of the event. If we’re going with the latter, however, we have it on good authority John Paulson is being targeted next (owns large home).
More: Grab Your Torch ‘n Pitchforks! A Predator’s Tour
*NACA’s “Most Wanted” list includes Lloyd Blankfein, Barclays CEO Robert Diamond, Credit Suisse’s Robert Shafir, HSBC’s Brendan McDonagh, National City Mortgage’s Peter Raskind and Carrington Capital Management CEO Bruce Rose.
I hope he has been paying his taxes while over at Deutsche Bank.
[via CNBC]
Ironically, if there was ever a time for the flat tax, this is it. Consider:
1. The most violent opponent to a flat tax, the mortgage lobby, hooked on the mortgage interest deduction like a long-time junkie on heroin, is at the nadir of its political power, as should be the very concept of stimulating a second housing bubble with government incentives like tax breaks. Now is the time to pull the rug out from under these people.
2. Given the inability of Obama’s Economic Superfriends to properly pay their taxes (and considering their genius is supposed to be substantial enough to save the financial world from imminent ruin) there has never been a stronger case for tax simplification. If the Secretary of the Treasury can’t (won’t) figure out what he owes, how can Joe Sixpack be expected to? Simplification never had a more obvious set of poster children than the current cabinet. If nothing else, it would be amusing to hear them argue against the idea.
3. One of the little appreciated benefits of a flat tax is that a massively complex set of deductions and exceptions inevitably serves those with the wherewithal to retain expensive tax preparation services. Read: the rich. In a time of hyperactive class warfare, and where a chief complaint of the anti-rich is that wealthy Americans have an effective tax burden below 20%, it would seem that a nice, deduction-free flat tax would actually increase average tax rate. Certainly, it would for Corporations, which have even greater means to use clever tax planning to pay fractions of their actual marginal rate.
4. The GAO claims that between $240 billion and $600 billion is spent on tax preparation every year. This is up to 20% of the total amount of tax collected. Think about that. The second most violent opponent to a flat tax, the tax preparation lobby, along with white collar professionals at large, is also near its political nadir. Further, putting $240-$600 billion to more efficient and productive use cannot be other than a good thing. Accountants presently have few friends in the country.
5. IRS auditing and enforcement would be vastly less costly in terms of time, personnel and capital. A portion of these professional and accounting-familiar resources could easily be sent where they are now badly needed: The SEC’s enforcement division. The rest could simply be let go, to find more productive endeavors.
We tend to think that the best approach is actually not a totally flat-tax, but a flat tax with a credit for the first, say, $25,000 in income. This is really a two-tier progressive tax, but we won’t tell anyone if you won’t.
Finally, it seems rather silly to give Congress a lever this big without some checks and balances. We think a three-fifths majority requirement to raise taxes might be a good one. Since there will be no escape from a tax raise, we need to be very careful how easy it is to adopt one.
Its hard to shake the disappointment associated with this weekend’s Times piece on Bank of Amerillwide– specifically, the graphic at left, which fails to pass the WWTPD (What Would The Post Do?) test. You know as well as I do that, at the very least, the Post would’ve had Lewis and Thain in a heart-shaped tub together, a ball gag off to the side for use later on, and an effete pinky sticking out of JT’s grip on a champagne flute, the implication being J to the T is the woman. Nevertheless, there are a couple points of interest.
First, that Thain, who according to emails among senior execs at Bank of America never asked for a $10 million bonus, actually floated the idea for him to get a $40 million bonus. But he just threw it out there mostly as a joke to see if it’d get any bites, knowing all along the stiffs at BAC would probably shoot it down (“An internal debate with Mr. Thain over his bonus ensued; a person familiar with Mr. Thain’s thinking said that a $40 million bonus was “never a subject of serious discussion.”)
And then there’s this:
Mr. Lewis, battered by analyst questions about the wisdom of the Merrill takeover, became disenchanted with Mr. Thain. In mid-January, he met with Mr. Thain at Merrill’s downtown headquarters. After a five-minute meeting, Mr. Thain was out.
Furious, Mr. Thain paced the halls of Merrill, venting his frustration to at least two people. “I don’t know how these people can run this company without me,” he told them.
What the Times doesn’t tell you is that, according to two sources, Mr Thain then went in to his locker, put on his singlet, and began shadow wrestling, calling out ‘Lewis!’ in a manner that made onlookers nervous for their safety, before being escorted from the building.
Avenue International, Ltd., Eton Park Overseas Fund, Ltd.
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Down $7.5 billion Fairfield Greenwich Group founders Walter Noel and Jeffrey Tucker have been forced to sell their one-sixteenth share in a Cessna 560XL. This is, of course, extremely upsetting, as it will make getting to Mustique difficult. But we’re heartened by the news that Citi is considering picking up the 25 and 50 hours of use a year, for the bargain basement price of $2,000/hour plus part of the plane’s $200,000 annual maintenance fees. So, every cloud…
In related news, the Post reports that Tucker is considering unloading his Schuylerville horse farm; if you know anyone who’s interested, get in touch.
