Now that we all know that America's law enforcement agencies aren't going to do much more than caress and tickle crooks' derrieres with wet noodles, one can hold out hope that investors' fraud suits would at least make them pay.
Except -- who's actually paying?
Rarely is an individual's feet held to the fire -- by civil plaintiffs or by the government. It's the company itself found wanting. And even if the individual is a complete crook who did lots of very bad things, it's the company itself that pays the bills.
For example. Angelo Mozilo, the Countrywide Crook, was once the most highly paid executives in the country. From 2000 to 2008, in racked in a $521.5 million paycheck. But, when the SEC slapped a criminal fine on him for fraud, his employer paid $45 million of his $67.5 million settlement. So, $500 million of that comp walked away into the sunset with Mozilo, while investors, employees and corporate coffers got stuck with the bill. For both. Meanwhile, the DOJ has dropped its own investigation.
Likewise, so-called maverick Judge Rakoff of the SDNY held his nose approving weak-kneed settlements between the SEC and Goldman, noting that the folks paying the fines were the shareholders themselves -- yes, the same folks injured by wrongdoing to begin with.
