Ed. note: This is a weekly column by Elie Mystal, Managing Editor of Above the Law Redline, wrapping up the week that was in law and finance. Elie is not a practicing attorney, and anything he says that you listen to can and will be used against you.
Maybe It's The DOJ That's Asking For A Bribe?
The law firm Gibson Dunn reported that companies paid a record amount of fines for violating the Foreign Corrupt Practices Act. Firms paid an average of $157 million to settle FCPA investigations.
If I was sipping cocktails with Avery Tolar on Grand Cayman, I'd tell him that I think the FCPA is borderline idiotic. There are countries out there where you can't do business without greasing somebody's wheels, but we're going to fine our business for accepting that reality? When in Rome, the dude abides.
But, in these globalized times, it's probably unworkable to abandon the FCPA. Bribes are bad, theoretically, and you shouldn't get an advantage just because your illicit envelope is fatter than the other guy's. Except, that's precisely the kind of regime the DOJ has set up. The Gibson Dunn reports says that the government took the money... I mean "settlements," but states "External compliance monitors were not imposed for the duration of a deferred-prosecution agreement as a part of any bribery settlements last year."
With no independent compliance monitors, firms that "self police" kind of have the option to pay off their global "partners," and then pay the DOJ its vig. It's just the cost of doing business.
Bear Stearns Bill Comes Due
JP Morgan bought the flaming carcass of Bear Stearns in 2008 and now it has agreed in principle to pay $500 million to former Bear Stearns investors to settle their butthurt over subprime assets. Given that JPM has already agreed to pay a $13 billion settlement with regulators over mortgage backed securities, this rounding error over Bear assets will have no effect, whatsoever, on any action taken or not taken by JPM in the future, and the bank probably priced in the settlement years ago.
Somebody wasted their time suing JPM and so somebody had to waste their time reporting on the settlement and I have now wasted your time by asking you to read about it... so now the circle is complete. Let us never speak of Bear Stearns again.
Whatever You Do, Don't Fine Your Kid $200
When dealing with a psychotic, greedy brat who has no respect for laws or humanity, the solution is not to take away a de minimus amount of cash. Which, y'know, is most likely coming his way.