Seriously. Connecticut is really pissed off and they want their piece of the pie. Yesterday.
The state of Connecticut is analyzing the details of bonuses paid by American International Group to see whether they violated state law and what possible remedies might be pursued, the Commissioner of Consumer Protection said on Monday.
But that’s nothing. Consider the point of this $165 v. $218 million bonus discrepancy thing. Connecticut wants to get that. Now.
This discrepancy now will be probed, Farrell said.
Well, Ed, prepare to be probed.
Connecticut eyes AIG bonuses, possible remedies [Reuters]
I see his mouth moving, and hear stuff coming out of it, and yet, I got nothing. (“We’re going to work with Congress” doesn’t count. For all we know that could mean Frank putting TG in a sleeper hold.)
Maybe!
NEW YORK (Dow Jones)–The U.S. Senate’s proposed legislation that attacks Wall Street compensation might not mean the end of all bonuses for brokers.
The bill, which is on the agenda this week, would impose a 70% surtax on so-called “excessive bonuses” – half on employees and half on banks that received bailout funds from the federal government. The tax, while less damaging than a similar measure passed by the House of Representatives on Thursday, would extend to more employees and firms than that bill.
While both bills appear to encompass broker retention payments, language in the Senate bill could provide a loophole for signing bonuses. According to the legislation, the tax applies to bonus payments “attributable to services performed by such individual during any preceding calendar year.”
Kenneth Raskin, head of White & Case LLP’s global executive compensation, benefits and employment law practice group, said the Senate bill, in its current form, seems to exclusively address rewards for past performance.
“If you sign a contract for me and I just give you money for signing the contract, you haven’t performed any services yet … it’s a technical interpretation, but it’s also the right one under the language,” Raskin said.
Signing Bonuses Could Escape Senate Bonus Tax [WSJ]
When we last checked in with our heroine, she was suffering through what is believed to have been her first attempt at food shopping in the last several decades, though maybe ever. It was a trying experience, one which left her very cranky, and sans Jarlsberg. Luckily, a weekend in Palm Beach was planned (it’s her primary residence, as you know), though for some reason she wasn’t staying at the manse, which was likely being redecorated or something. But people, please. Do not assume it was a restful vacation that left the old girl rejuvenated and with the newfound strength to put herself out there and give Benjamin Lipshitz, who she should’ve married in the first place, a call. Because it was anything but. Sure, there was shopping for baubles, but not those deserving of a lady named Ruth Madoff.
What she’s doing by day, I know. Shopping. In and around the Via Mizner alleys, where they sell knockoff cheapo costume bangles. We are not talking Cartier here. We are talking plastic. Hunting with girlfriends who’d call out, “Ruthie, look at this.” Ruthie then came and looked at this.
Ruthi Madoff Is Using Her Plastic [NYP]
Josh Gerstein over at Politico is not a very happy camper. We’re not huge Politico fans or anything, but Gerstein brings up some very interesting points about how badly Paul Volcker has been used by the present administration. To wit:
Six weeks after President Barack Obama appointed a blue-ribbon panel to help him dig America out of its economic crisis, the board has yet to hold an official public meeting.
The White House initially said that the 16-member Presidential Economic Recovery Advisory Board, headed by former Federal Reserve Chairman Paul Volcker, would meet “every few weeks.” Last month, a spokesperson told POLITICO the group would meet monthly. More recently, the White House said the high-powered board, set up to address what Obama has called the worst economic emergency since the Great Depression, would gather only about four times a year, with the next session due in “late spring.”
Gerstein goes on to wonder if some private meetings by segments of the Advisory Board aren’t gaming the Federal Advisory Committee Act, which requires public disclosure when such bodies meet.
It does seem a bit like Volcker was paraded about to inspire confidence, and then mushroomed once his appearance hit flat panel screens around the country enough times to have the desired effect.
Econ board has yet to meet publicly [Politico]
Not everyone is feeling the pain. Consider the folks who now bill out at GBP 1,000 per hour, for instance:
U.K. regulatory lawyers advising clients on the financial crisis and scandals like those involving Bernard Madoff bill as much as 1,000 pounds ($1,440) an hour — 50 percent more than mergers-and-acquisition lawyers did during a takeover boom two years ago.
“It’s our time in the sun,” said Darren Fox, a regulatory lawyer who advises hedge funds at London-based Simmons & Simmons. “If you ask which departments are very busy and where clients’ worries are, it tends to be in the regulatory area.”
Surprise!
Madoff, Recession Drive Top U.K. Lawyer Fees as High as $1,440 [Bloomberg]
From the mailbag: “UBS Wealth Management in the US is starting to sell off branches – should be announced ‘shortly’ in Chicago.”
As is his wont, Geoffrey Raymond, the greatest artist of our time has finally weighed in on the toxic assets plan, with a portrait entitled St. Timothy. It looks absolutely nothing like T. Geith, but that’s not the point. Raymond of our time will be in the alley behind Goldman Sachs tomorrow, taking public annotations, but if you can’t make it, weigh in below and he’ll add your two cents, be it “Great job!” or a sample of DNA, to the canvas. Bidding starts at $30,000, though we have it on good authority you’re going to have some stiff competition.
And the ECB don’t need no stinking stimulus, and won’t be pumping cash shamelessly into the European economy, thank you very much. Of course, this might just be a reaction to the fact that, historically, Europeans have quite a bit more experience with, and therefore fear of, inflation than Americans. Either way, Jean-Claude’s slight is just the latest sign of what amounts to a total lack of respect for the likes of Tim “The Safecracker” Geithner in Europe. The G20 is just as anxious to be rid of Geithner and, by extension, his hand on their purse strings, as anyone else. As usual, Germany is expected by the world to haul the freight for the continent so its somewhat surprising that Trichet (no friend of Wiemar) has been supportive of Europe’s (read: Germany’s) spending sloth (aside from buying its citizens a stack of new Volkswagens, that is).
It is hard to blame Trichet. The United States has to abate this crisis anyhow, so why not ride on the coat-tails without blowing up your own debt, and emerge with the kind of fiscal strength that the United States will lack after tacking $2 trillion onto the liabilities side of the balance sheet. Hell, played right, the Euro, and not the Dollar, might emerge as the world’s reference currency. (We giggle here, but only just).
ECB Chief Says Boost In Stimulus Not Needed [The Wall Street Journal]
Of course we all know how to make that happen: Simply regulate short selling and the hedge funds who poison us with it.
“We believe that short selling should operate in a well-structured regulatory framework in the interests of maintaining a fair, orderly and efficient market,” said Martin Wheatley, chairman of IOSCO’s task force on short selling and also chief executive of Hong Kong’s Securities and Futures Commission.
Several European Union countries introduced curbs last year unilaterally, drawing industry criticism over a lack of coordination in a single EU share trading market. The slide in many financial shares continued in spite of the curbs.
We are absolutely thrilled to see some action on this front, let us just tell you.
Regulators seek global approach to short selling [Reuters]
