Tracking the fortunes reaped by the bankers who tanked the economy
The Center for Public Integrity's After the Meltdown series documents the fate of the regulators, executives, and firms that were most directly responsible for the subprime meltdown, and demonstrates that the top bankers for firms like Lehman got unbelievably rich due to their failures, and are still in business with lucrative consulting firms (for example, Lehman CEO Richard Fuld walked away with several hundred million in cash and now has homes in three states and a personal consulting outfit). Consumerist's Chris Morran has done a great job of summarizing the findings:Former Bear Stearns CEO Jimmy Cayne isn’t working as hard as Fuld, though he did make around $376 million before “retiring” after Bear Stearns lost billions on toxic mortgages. Don’t expect to run into this guy at your parents’ assisted living facility, as he’s holed up in the Plaza Hotel with Heloise, playing in online bridge tournaments. The horror. Merrill Lynch lost $8 billion under the leadership of Stanley O’Neal, but unlike Cayne he hasn’t taken to living like a wealthy retiree. Instead, he took his $165 million golden parachute and traded it for aluminum, landing a seat on the board of Alcoa.
Ken Lewis’ hubris and desire to lead the world’s largest bank resulted in Bank of America snatching up Countrywide and Merrill Lynch as they swooned. Except he didn’t really do his due diligence, or he would have seen that these two acquisitions would result in penalties, settlements, adjustments, and other costs totaling more than $40 billion. That doesn’t even factor in how BofA went from being viewed as a beloved outsider to becoming maybe the most-reviled bank in the nation in just a few years.
And yet, he walked away with around a quarter of a billion dollars. He did recently sell his home near the BofA HQ in Charlotte, NC. We can only assume it’s because current CEO Brian Moynihan kept egging Lewis’ car and writing nasty notes in shaving cream on the windshield.
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