Study: CEOs cashed in before Wall Street meltdown

By David Edwards and Daniel Tencer
Tuesday, November 24th, 2009 -- 10:20 am
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lehmanbrothersbank Study: CEOs cashed in before Wall Street meltdownThe CEOs of Bear Stearns and Lehman Brothers, the two investment banks that collapsed during last year's financial meltdown, walked away with hundreds of millions of dollars in compensation even as the company's shareholders lost everything, says a new report from Harvard Law School.

The top five executives at Bear Stearns made a total of $1.4 billion from bonuses and equity sales between 2000 and 2008, while the top five executives at Lehman Brothers made around $1 billion during that same period -- the period during which the companies ran up the bad investments that would see them collapse in 2008, according to "The Wages of Failure" (PDF), a report from Harvard Law School's Program on Corporate Governance.

"The people who invested in these companies should feel betrayed," Nell Minow, a compensation expert at the Corporate Library, told NBC's Lisa Myers. "The whole idea of capitalism is that the people provide the capital and the executives take care of it for us. In this case, the people provided the capital, and the executives took it."

Bear Stearns CEO James Cayne personally made $388 million in the eight-year period leading up to the bank's collapse, while Lehman Brothers CEO Richard Fuld made $541 million. Boomberg news service notes that "shareholders who held their shares throughout the period analyzed in the report lost most of their initial investment."

NBC's Myers points out that both Cayne and Fuld are being sued by shareholders.

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CNBC business anchor Jim Cramer told NBC's Matt Lauer that the corporate culture that led to the huge bonuses and financial collapse isn't going away.

"What happened to these people? Nothing," Cramer said. "They got the money, they left. ... They got away with it, so why shouldn't the next guy try?"

This video is from NBC's Today Show, broadcast Nov. 24, 2009.



Download video via RawReplay.com

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Story comments are below...

  • WJM51
    I HATE what this country has turned into over the last 30 years. Smoke a joint, do 5 YEARS, steal a billion dollars and destroy the entire economic sector of the country, and you get a GODDAMNED BONUS. If you have WAY too much money for most COUNTRIES, you go free, no matter what your offense, or how many people you have destroyed in your unmitigated greed. Do something that involves NO ONE ELSE, and you go to jail and have your life ruined.

    GODDAMN this bullshit, and all those who enforce it. These bastards should be taken out and tarred and feathered, their homes burned to the ground and they and their families imprisoned. To hell with these scum. They deserve to be left on the street to fend for themselves. THEN we can hear their bullshit about pulling yourself up by your own bootstraps. They will see just how easy that horseshit is when we take away THEIR boots.
  • CosimodiRondo
    And what's even worse: these days they don't even have to hire expensive lawyers to get off, because there aren't even any indictments.

    Two words: Star. Chamber.
  • Freedom's Toast
    I wouldn't even try to put it better. Thank you.
  • rxgary
    all these board members and ceos should be charged under rico laws. that way everything they have can be taken away
  • Prattvictory
    When we were competing with the Soviet Union we made a big deal about how Americans lived this wonderful life compared to the communists. The cold war is over and is our wonderful life under capitalism.

    It was all a sales job. We bought capitalism. Now we own it, or rather it owns us.
  • Atilla
    The DOJ is just too busy ruining pot smokers lives to take on something like this now. All they did was bankrupted our country, We couldn't expect this to be prosecuted.
  • lunaursus
    While people of the nation were too busy oogling the Clinton sex scandal on tv and papers, congress was busily removing the country's protection from banking corruption. Without laws like the Glass Stegal Act and others, it was a death knell for the entire nation and other countries who relied on USD, and only a matter of time. It only took 4 or 5 years, since those at the top knew exactly what was happening long before the public began hurting enough so they would pay attention. Even then, they were given BS stories as they are now.

    Did congress know at the time what it was doing? Of course it knew exactly what it was doing behind the backs of the American people. (Or, you might check and see if it was done with a few congress members while the rest went home for a holiday, which is a favorite trick). Bill Clinton knew too, it was his friends like Robert Rubin, Larry Summers and others of that ilk who lobbied heavily to get banking laws lifted and who have again made their way back into our government with Obama. And, all through the Bush admin, they were busy draining the country unfettered.

    Although Clinton, when asked why he ever went along with such a thing, simply said, "If I knew then what I know now....." You know, the usual lies to the public. You had better believe they knew what was going on, rubbing their hands in anticipation, in fact. (Both Clintons and Bush families have subsidiaries in AIG, by the way.) Many members of Congress had stock in the very concerns that were bailed out, also. Those who say they had no idea (and Ive heard it out of them) that things were getting so bad, ARE LIARS. We have been methodically taken down and to the cleaners by a gang of common criminals in the WH for many years.
  • yvonneo
    I recently learned that the mafia has "business interests" in just about every business enterprise imagineable and garners an annual amount of about a 100 billion dollars--and that's just the Italian mafia. Think about that for a minute. That's more money than Boeing, Lockheed Martin, etc., makes annually. We talk about corporations, but who actually owns and controls these corporations--such as insurance corporations, financial institutions, etc.?

    There are powerful criminal "gangs" out there. In addition to the Italian mafia, there's the Asian mafia, the Jewish mafia, the bush mafia and god knows how many others out there and they form alliances and compete with each other over turf. And their criminal activities have garnered them enough money to literally take over entire govts. So it shouldn't come as too much of a surprise that these gangsters are using their illgotten financial gains to buy the appearance of being legitimate business enterprises and to gain political power. The reality is that they didn't gain their positions and wealth through honest means--they're just a bunch of murderous cons, crooks, liars and cheats.

    Madoff was small potatoes compared to these guys.

    Americans have become incredibly superficial: all anyone needs for credibility these days is the money to be able to afford $5000 suits, $1000 shoes and getting $400 haircuts--nobody bothers to question how they got the money to begin with. So you take a gang leader, dress him up in expensive clothes, start a corporation, give him the title of CEO and suddenly he has credibility and the outward appearance of legitimacy.

    The only way that I can see to end the rule of organized crime both here and abroad is that the people need to rise up en masse and go after these criminal bastards and take them down--without mercy. We're not going to see our govt take any significant action against these bastards because it has been taken over and is now itself being operated and controlled by criminal interests.

    So of course these "CEOs" cashed in before the financial collapse at the expense of their shareholders and the taxpayers. And the next time you read about a billionaire being found dead and you wonder why, just consider how many lives have been destroyed as result of being robbed blind. As Chris Rock would say, you're not saying you agree--but you do understand.
  • Does Myers point out that shareholder suits almost never get anywhere? The Courts are stacked against them. Packed with Republican Judges bought and paid for.
  • thx1138a
    .
    WALL STREET DECIDES IT WILL NOT BE INVESTIGATED BY U.S. DEPT OF JUSTICE

    -- Decision Reflects Similar Sentiment Regarding CIA Shorted 911 Airline Stocks --

    -- Harvard Law School Leaks Story Simply To Irritate Rival Ivy League Spooks At Yale --
    .
  • texasaggie
    Taking the law into your own hands is wrong. In this case I see no reason why these jerks shouldn't be forced to repay, by whatever means, every cent they took. Getting paid for nonperformance is NOT what the free market is all about.
  • OldAtlantic
    But it is in the oligarch market.
  • texasaggie
    Too true. Your reply suggests that there is still hope for you. Good job.
  • stockshock
    Secret Software & Naked Short Selling
    We need NSS arrests - not Insider Trading arrests
    It is November 5th, 2009 at high noon and the SEC is all over the news about another arrest. They are all on stage giving this big press conference on 14 arrests for Insider Trading connected to the Galleon Group investigation. Is it Insider Trading? The Government wanted the world to believe this caused the financial meltdown on Wall Street. Three weeks earlier the SEC made the first arrest for Insider Trading involving Raj Rajaratnam and 5 other people on Wall Street.
    It is my opinion that the Government and the SEC is involved in a cover up to try and make people think that it was insider trading that caused the crisis of 2008. Let the truth be known. The news media, along with Goldman Sachs and many other Wall Street companies and people of power are all involved in the biggest cover up in the history of the United States. It involves greed to the fullest extend. The SEC is responsible, under the leadership of Christopher Cox in July 2007, the Securities Exchange Commission abolished the Up Tick rule. The elimination of the Up Tick rule created a wave of corruption that grew out of control, based on Naked Short Selling and the use of secret software and super fast computers.
    Insider trading has played a role in the financial crisis, yet the story not being told by the news media is the arrest of a Goldman Sachs employee who tried to steal Goldman Sachs secret software. This arrest came over the July 4th Holiday week-end and was aired briefly on a Saturday night on TV and then came Monday July 6th, 2009 and the story disapeared. A few weeks later Goldman Sachs reported its FY 2009 2nd QT earnings ( April – May -June ) and Goldman Sachs made over $100 million dollars a day in 46 of the 64 trading days for that quarter. How could this be possible after a 17 month recession. Wall Street changed two major Laws. The first being the use of decimal places (2001 )instead of fraction. Years later and after they lobbied for the removal of the Up Tick rule ( 2007 ) the secret software was designed and in place ready to go into full operation now that Wall Street was allowed to naked short sell millions upon millions of shares that Goldman Sachs and other hedge funds didn’t even own and failed to deliver. Their greed took over, who wouldn’t , when Goldman Sachs was making over $100 million a day in trading. They destroyed companies like Sirius XM radio and overstock.com and many others. Then they began naked shorting the banking industry and attacking each other.
    This is the truth that the news media, corporate Amercia, the SEC, the Government, Goldman Sachs, Hank Paulson and the many others that were in power have not told the American people and the world. Now, as I write this letter, they are now trying to con the world into thinking it was insider trading that caused 95% of the middle class workers to lose 20% - 60 % of their investments and 401K’s.
    In the end the Entire story will be told and I hope I get my chance to tell it. Check the facts. There was an arrest of that Goldman Sachs employee in July 2009. Why was it covered up? Where are the arrests for Naked Short Selling and Goldman Sachs use of their secret software that stole the wealth off investors all across the country. It will go down as the biggest scandal in history.
    I give you permission to re-print this letter. Please follow up and investigate. This story needs to be told. Please contact me. It is exactly what is taken place.

    Richard Keane
  • dennycrane
    ....And "Martha Stewart" went to jail for what?......
  • mledford27613
    I really hope the rest of America starts waking up to the corporate run government. This is ridiculous and has been going on for too long. I fear the only thing that will bring our country back is a full scale revolution. I don't see any other way to fix what has happened to our once great nation. It is very sad that it has come to that.
  • frigidnorth
    Well if you waiting for the next revolution forget it, it will never happened, the Average American citizen is to cowed to stand up in revolt. and even if they did the government would put them down so fast it would make your head spin. Let's face it we became slaves to the corporations the minute RayGun step into office and started giving all of your money to the rich, and made you foot the bill. Trickle down economics! or what was it Bush Senior said "Voodoo" economics! it's too late and the Americans have just now started to wake up from there 30 coma to see what is happening.
  • rickpetes
    The last time there was a real foment for revolution, they assassinated two kennnedys, a king,and several less famous leaders of the various movements. Sucked the wind right out of the youth and led to the "me decade" of the seventies, and everyone just sort of sold out. Don't expect much. And, remember, after the revolution, you might still have an oppressive system: the french revolution, the russian revolution, the chinese revolution, etc. all led to systems that were about as bad as what they replaced.
  • OldAtlantic
    Libs spend their time saying its racist to stop H-1b doing the risk management work at Lehman. Feel smart now?
  • Savantster
    .
    you really are that retarded, aren't you.
    .
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