With President Obama’s signing of the Wall Street Reform and Consumer Protection Act on July 22, most Americans still know very little about the bill or what the legislation actually means (if they’ve even heard of it at all). But considering that the Act is 2,300 pages long and tackles the more complex issues of Wall Street reform, it is understandable why many are confused. Add to the fact that others still don’t understand what caused the recession over the past two years and perhaps you’re thinking President Obama should have sat down for a question and answer session rather than attend a flashy signing ceremony.

Also known as Wall Street Reform or Financial Reform, the act is considered one of Obama’s largest accomplishments after passing health care, and what he calls “the strongest consumer financial protections in history.” But how will a few pages of paper (or many, many pages in this case) lift us from one of the worst recessions we’ve ever seen? Have we seen any changes since it went into effect last month?

The most immediate problem the act addresses is the lack of regulations that allowed Wall Street to monitor itself over the past several years. Although extremely high banker salaries and high credit card fees led in part to the economy’s demise (and made most of the headlines) more complex issues like credit default swaps and derivatives trading also played a major role. It’s enough to make anyone’s head spin. But with Obama taking a stand to pass this legislation, it’s the first step in saying enough is enough. Change is here – so what does this change actually entail?

Other than making the US financial system more transparent, the law promises to help “real” people, and not just punish Wall Street executives, as some believe. With the new legislation Obama hopes to end overdraft fees, makes student loans easier to get and end abusive mortgage practices. This news comes as a relief to many who were victims of unfair rate hikes in addition to losing their jobs, savings and house values in the recession.

The act also created the Consumer Financial Protection Bureau and the Financial Stability Oversight Council, creating new protections for Americans and their tax money. Many believe it was the lack of these authorities before that lead to the financial crisis. Those worried about executive salaries will also be happy to know that shareholders now have a say on CEO bonuses, limiting some of the outrageous salaries of the past.

But just like with any large sweeping change, time is needed. With the act in effect for less than a month, the results are still to be seen. Many argue that this reform will hurt rather than help the economy and that many financial institutions will move somewhere with less regulation. How successful do you think the new legislation will be? What is the change, if any, you would like to see in Wall Street reform?

Posted by Rachel on August 11, 2010 at 4:21pm.

As an update to our January entry about Goldman Sachs,  Goldman Sachs is now in the middle of a ghastly legal battle. The Securities and Exchange Commission (SEC) has filed fraud charges against Goldman for structuring and marketing faulty investments tied to subprime mortgages. The allegations against Goldman Sachs paint the picture that they not only abused the trust of their shareholders, but also that of the entire national economy and ultimately the global market.

The banking industry has been the foundation of  capitalism and business for a very long time, and over time people have taken more control of the growth of their finances by investing their money and expecting positive returns on those investments. Investors put their full faith in experts who should diligently care for their money and thus, their livelihoods. However, as we’ve seen over the past few years (can anyone say Enron or Bernie Madoff?), we now know that no one is safe from getting taken to the laundry.

Here’s a brief breakdown of how Goldman Sachs has been charged with fraudulent activity:

• In 2007, Goldman Sachs created the ABACUS “synthetic collateralized debt obligation” or CDO, and invited its clients to invest in the CDO, which was based on 90 bonds derived from subprime mortgage loans made over the previous 18 months.
• Goldman told investors the securities in Abacus had been chosen by vetted management firm with $15.7 billion assets in 22 CDOs.
• However, the SEC claims that the underlying portfolio was actually put together by John Paulson, a hedge fund manager who strategically picked the worst assets, so he could bet against those bad assets by purchasing “credit default swaps,” which are insurance policies that pay out if borrowers default.
• According to the SEC, Paulson paid Goldman $15 million to pitch and market the ABACUS CDO. And by 2008, Paulson had earned $1 billion off of defaulted investments while investors lost $1 billion.

Investments are usually not considered gambling if they are for economic utility, positive expected returns, and have an underlying value independent of the risk being undertaken. However, if Goldman Sachs and Paulson knew that those they were advising could not have ethically and legally expected profits, then the SEC’s investigation may reveal that their efforts were purely geared towards padding the bank accounts of their executives at the detriment of every one else.

Since the SEC’s investigation about Goldman Sachs’ profits skyrocketing while the global economy failed, Lloyd Blankfein, chairman and chief executive of Goldman Sachs has maintained a heavy defense that the firm did nothing wrong. At the crux of Goldman’s defense, they note that others should have done their homework.

Will the decision of this case ultimately decide the balance between justification and justice?

Posted by Melissa on May 14, 2010 at 1:07pm.

By: Jacquelyn Hoffman, The Daily Californian

As a quick follow up to our March 11^th, 2010 post  Yelp? Extortion!?! , Yelp has decided to make two critical changes to address recent complaints of how it handles reviews posted by its users who rank and review businesses. Specifically, (1) readers will now be able to click on a link to view reviews that Yelp filtered out, and (2) advertisers on its system will no longer be able to submit their favorite review at the top of the page.

These actions seek to minimize the perception among many business owners that Yelp does not provide a “level playing field” for its advertisers given the opaque nature of Yelp’s ranking and filtering process of reviews. Yelp is making it easier today for users to see which reviews have been removed from the site as well as working to better identify and remove the instances of suspicious reviews, such as those posted by a competitor or by individuals connected to a business.

However,  Yelp’s spam filter — although not perfect — will continue to sometimes remove legitimate reviews and rank reviews according to a confidential algorithm that takes into account not just posting date but user metrics like how active a reviewer is. But these primary changes, in concert with some other modifications, appear to be steps in the right direction. It is clear that Yelp is striving to eliminate what has been long perceived as support of an imperfect process that offers certain advertisers “special treatment”.  Hopefully, their actions should help the company recapture  some of its lost credibility and repair its perception among people like me.

Posted by Joshua on April 7, 2010 at 1:00 pm.

Courtesy of gobblr.com

Wanna know a secret?  I’m Yelp Elite.  In fact, I’ve been so since 2006.  (Be jealous.)  I stumbled upon the website one day while trying to find some new restaurants and quickly learned that it’s not only a great reference point, but seriously amusing.   Since then, Yelp slowly became a fun hobby of mine – posting reviews and pictures of hotels, restaurants, spas, etc.  It’s almost therapeutic for me, in some way.  So, imagine my shock when I heard that my beloved website was served with a lawsuit, alleging *gasp* extortion.

Extortion, eh?  ”The crime of obtaining money or some other thing of value by the abuse of one’s office or authority.“  Whenever I hear that word, the mob and politicians come to mind — or, even the David Letterman story.  But, Yelp certainly does NOT come to mind.

So what’s the deal with the lawsuit?  Well, Cats and Dogs Animal Hospital in Long Beach is accusing Yelp employees of using high-pressure sales tactics to entice business owners to pay Yelp for an advertising contract.  According to TechCrunch, a “sales representatives [allegedly] repeatedly contacted the hospital demanding payments of roughly $300 per month in exchange for hiding or deleting the review.” When Cats and Dogs declined to pay the price, the hospital claims that a (potentially fraudulent) negative review popped up the next day, and Yelp refused to remove it.

If Yelp actually is calling businesses and offering to remove negative comments at a cost, then it’s safe to say that that would be considered an unethical business practice. In fact, there are other internet businesses out there, like Rip-Off Report, that claim to provide consumers with an honest forum to praise or vent about businesses, but apparently apart of their business model allows companies to “pay away” negative comments.

Since Yelp’s tag line is “Real People, Real Reviews” and the idea is to encourage users to submit realistic reviews about businesses, Cats and Dogs request to remove its negative reviews, in an effort to make it appear that there have never been any complaints, may seem suspicious to some. As an avid Yelp user that’s written my fair share of negative reviews, those critiques from consumers can be legitimate.  Example here. Most of the time reviewers are not trying to be malicious; instead, they are letting other potential customers know about their experience and what to expect.

In response, Yelp’s CEO, Jeremy Stoppleman, issued this statement, calling the allegations “false and easily refuted”.  Stoppleman also implied that since the lawsuit was conjured up by law firms, they just might be interested in claiming a portion of the huge funding that Yelp recently received.    He also points out here that a pretty good segregation of duties exists regarding Yelp’s Account Execs”

“We take the church/state separation thing seriously. Sales representatives (also known as Account Executives or “AEs”) cannot write reviews on Yelp. This is clearly communicated internally, and employees within the sales department are trained and re-trained that any deviation from these high standards would result in their termination.”

Additionally, Yelp’s business model is much like the business model of Facebook, in that it generates a large portion of its revenue based on the amount of ads/ad contracts sold.  Even though the majority of their revenue comes from advertisement on the site, it would seem to be both illegal and unethical for them to exert resources to devise a plan of internally creating negative business reviews to extort businesses for the removal of those reviews.

What’s your take on the lawsuit?  Does it seem like a legitimate extortion scheme at its finest?  Or, is the lawsuit merely a way for businesses to blame Yelp for all their negative reviews?

Posted by Melanie on March 11, 2010 at XYZ TIME.

Barack and Michelle Obama should be highly flattered…or annoyed.

In recent weeks, both the President and the First Lady have been featured in advertisements, without giving their consent or approval.  First, Michelle Obama was featured in PETA’s newest ‘Fur-Free and Fabulous’ ad, alongside Oprah Winfrey, Carrie Underwood and Tyra Banks.  PETA admits that they did not ask for the White House’s consent to use the First Lady in the ad.  However, since the First Lady swore off fur in a statement back in June, PETA felt this was enough leverage to use Mrs. Obama in their ad.  Really, PETA?

Then, Mr. Obama was featured on a billboard (in Times Square, no less) by Weatherproof Garment Company, shown wearing one of the company’s jackets during a recent visit to China.  Again, Weatherproof did not ask for consent from the White House to feature the President in their ads.  “Weatherproof did not seek permission from the White House, and does not believe it was necessary to do so as the billboard does not claim Mr. Obama endorses the product.”  (Um, sure.  Let’s not neglect the fact that the the billboard’s tagline is, ”A leader in style.“)

To address the Weatherproof situation, White House deputy press secretary, Bill Burton, reiterated that “the White House has a longstanding policy disapproving of the use of the President’s name and likeness for commercial purposes.”  Makes sense!

After hearing about these two stories, I wondered if it would be viable for the Right of Publicity to extend to the First Family.  The definition of the Right of Publicity is ” …the right to prevent unauthorized use of one’s name or likeness by a third person for commercial benefit.”  And, isn’t commercial benefit what PETA and Weatherproof were ultimately seeking? Both ads would more than likely lead the public to believe that the President and First Lady endorse the products/organizations, thus leading to increased sales, donations, interest, potentials clients, etc.   Given this, isn’t it fair to say that PETA and Weatherproof both infringed on the President’s and First Lady’s Right of Publicity?

Other celebrities would think so!  Rapper 50 Cent recently sued WorldStarHipHop.com for using his image on their website without his permission.  Last year, Jennifer Lopez and Marc Anthony sued a stroller company for using their image to help sell one of their products – unauthorized, of course.   And, even Michael Jordan took on the big Chicago-area grocery stores, claiming Jewel and Dominick’s used his image (and Bull’s number!) without his consent.

But let’s face it – even though ‘normal’ celebrities can seek to protect their Right of Publicity through these lawsuits, I don’t think that it applies in quite the same way for the Obamas.  Imagine if Michelle Obama suddenly decided to sue PETA.  Imagine the backlash/global controversy/PR nightmare that would ensue.  Disaster, indeed.  PETA and Weatherproof  have execs smart enough to know this, which is why it’s amusing to me that both companies have ‘graciously’ complied with the White House’s request to take down the ads.  (Word on the street – Weatherproof is now seeking  to replace the Obama ad with one with Sarah Palin.)  These ads are merely both company’s shameless attempt to generate a buzz and gain some publicity.

Judging by the amount of blogs and articles out there on this subject (including this one), I’d say it worked…wouldn’t you?

Posted by Melanie on January 29, 2009 at 3:42pm.

In a landmark decision with far-reaching consequences, a sharply divided Supreme Court last week struck down restrictions on campaign spending by corporations and unions, freeing them to spend a limitless amount to support or oppose a political candidate.  The case, Citizens United v. Federal Election Commission, reverses two prior Supreme Court precedents as well as overturns key aspects of the Bipartisan Campaign Reform Act of 2002 (BCRA), also known as the McCain-Feingold Act.

The underlying case arose from a 2008 movie produced by the appellant, Citizens United, which was harshly critical of then candidate Hillary Clinton. Citizens United and ‘Hillary: The Movie’ were financed by both individuals and corporations. Because the movie, titled ‘Hillary: The Movie’, advocated the defeat of Clinton, the Federal Election Commission barred any ads promoting it during the 2008 election season as well as broadcasts on cable video on demand. It cited restrictions on political ads financed by corporations as well as a provision in the BCRA that prohibits “electioneering communications” paid for by corporations 30 days before a presidential primary. The United States District Court for the District of Columbia sided with the FEC and ruled that Citizens United could not air any ads promoting the movie before the Democratic primaries.

The Supreme Court overturned the District Court and ruled that the BCRA’s restrictions on corporate funding of political broadcasts violated the First Amendment’s protection of free speech. In so doing, the Court completely overruled a prior Supreme Court decision, Austin v. Michigan Chamber of Commerce, a 1990 case which upheld Michigan’s prohibition against corporations using treasury money to support or oppose political candidates. The Court also partially overruled another prior decision, McConnell v. Federal Election Commission, a 2003 case which upheld the BCRA’s clause that restricts “electioneering communications” funded by corporate money 30 days before a presidential primary or 60 days before a general election.

Justice Kennedy, writing for the majority joined by Justices Roberts, Scalia, Thomas, and Alito, wrote that “If the First Amendment has any force, it prohibits Congress from fining or jailing citizens, or associations of citizens, for simply engaging in political speech.” He further wrote that “When government seeks to use its full power, including the criminal law, to command where a person may get his or her information or what distrusted source he or she may not hear, it uses censorship to control thought.” He added, “The First Amendment confirms the freedom to think for ourselves.”

There seem to be two underlying principles guiding the majority’s reasoning in this case:

1. First, that money equals speech. This doctrine was first promulgated by the Supreme Court in Buckley v. Valeo, a 1975 case where the Court struck down limitations on campaign expenditures, on independent expenditures by individuals and groups, and on expenditures by a candidate from his or her personal funds. The Buckley Court reasoned that such expenditures were a form of constitutionally protected speech that could not be restricted.
2. Second, that corporations have the same constitutional rights as people. This is not a new notion and the debate about “corporate personhood” has indeed been a long standing one. Of course, we all know that corporations are comprised of individuals that have constitutional rights, but the Court for the first time concludes that a corporation itself has a constitutional right to free speech when it comes to elections.

Coupling the two principles noted above, the Court ruled that corporations have the same First Amendment rights as individuals and can therefore spend an unlimited amount of money to advocate for or against a political candidate. It should be noted, however, that corporate and individual contributions made directly to a candidate can still be restricted.

As evidenced by the widespread media coverage this ruling has received, the implications of it are profound. Corporations, as well as unions, can now spend an unrestricted amount to support or oppose any candidate they view as favorable or unfavorable to their agenda. Since corporations have more money and resources than unions, many fear a corporate takeover of political debate in this country. Indeed, Justice Stevens in a dissent joined by Justices Breyer, Ginsburg and Sotomayor, wrote that “In a democratic society, the long-standing consensus on the need to limit corporate campaign spending should outweigh the wooden applications of judge-made rules” and that the ruling “threatens to undermine the integrity of elected institutions across the Nation. The path it has taken to reach its outcome will, I fear, do damage to this institution.”

Because corporate money has for the most part favored Republicans, the response to this ruling along party lines has been predictable, with President Obama and most Democrats blasting the ruling while most Republicans praising it as a victory for free speech. (Watch President Obama criticizing the decision in the State of the Union address last night as well as Justice Alito’s reaction.) The Supreme Court itself was divided starkly between its conservative and liberal wings. (Former Justice O’Conner, the primary swing vote before retiring, has implied that she would have dissented, which would have resulted in an upholding of the prior restrictions.) In an interesting role reversal, many liberals are accusing the conservative wing of judicial activism, and hypocrisy, since a literal interpretation of the Constitution would not preclude the restrictions on corporate funding of political speech as the Constitution never expressly addressed money in relation to politics.

A couple of interesting things to watch now will be whether Congress attempts to enact laws that would make corporate or union expenditures on political advocacy subject to a shareholder or member vote. Also, the ruling potentially opens up foreign corporations trying to influence American political debate through their U.S.-based subsidiaries. Some are now even calling for a Constitutional amendment to circumvent the Supreme Court decision.

The ruling is already affecting the political calculus of campaigns for midterm elections later this year and will undoubtedly have an even deeper impact on the 2012 and future elections. Many fear that this ruling will affect the policy positions of candidates who desire or fear political cash being used on their behalf or in opposition to them.  In any event, what is certain is that both sides will flood the airwaves with broadcast “electioneering communications” and that information and misinformation will become even more pervasive and come from more sources than ever before.

Your thoughts?

Posted by Anish on January 28, 2010 at 2:52pm.

Goldman Sachs battles Edward Cullen for the title of biggest blood-sucking vampire. The investment banking giant has been criticized for its role in the economic meltdown of 2008, including contributing to the mortgage crisis that felled AIG. Despite an expensive bailout, it seems that old habits with regards to bonuses die hard. But shareholder Ken Brown isn’t taking this lying down.

Brown filed a lawsuit against the company for doling out bonuses of $4.82 billion in 2008 despite earnings of only $2.32 billion. Apparently this compensation structure is typical for GS. Regardless of how the company does, employees and executives are paid well. Really well. Current CEO, Lloyd C. Blankfein, scored a $68 million bonus his first year alone.

“Payment of this exorbitant amount of compensation, which has little to do with Goldman Sachs’s performance, and was financed in large part with government bailout and taxpayer money, is a waste of the company’s assets and a breach of duty and loyalty,” states Brown in his suit.

Goldman Sachs has repaid the $10 billion  of taxpayer-funded emergency aid from TARP (as a byproduct of the AIG bailout), freeing the company from government compensation limits, but if that close call doesn’t inspire some good sense, whatever will? During the worst recession since the Great Depression, Goldman Sucks (excuse me, *Sachs) managed salary payouts in the neighborhood of $22 billion, which was estimated to be enough for 115,000 full-tuition Harvard educations and to insure 1.7 million families. Another lawsuit filed by Illinois’ Central Laborers’ Pension Fund accuses GS of breaching their fiduciary duties and violating their own compensation policies.

In an age of financial turmoil and joblessness, can’t Goldman just scrap the bonuses? Not when they’re busy being beneficiaries of enormous government subsidies and using their new status as a bank holding company to gain access to cheap debt from the Fed. Meanwhile Americans are struggling and dumping on Obama, whose administration has taken difficult strides to rescue the sector. On top of everything, Goldman’s income tax rate dropped has from 34.1% to 1%. Robert Willens, president and CEO of a tax and accounting firm, suspects that “they have taken steps to ensure that a lot of their income is earned in lower-tax” countries.

If I were a shareholder, I’d be seeking justice too, with Goldman paying 44-48% of revenue in wages and rewards. Even if they did lose, they’ll probably claim to have no money, having paid it all out in bonuses. Quite a convenient exit strategy. Intervention by the SEC in response to Goldman’s stock fraud, market puppetry, and artificially beefed up profits may only motivate cosmetic changes, while chances of genuine reform become a foregone conclusion. Isn’t there anything we can do about this culture of greed? Goldman Sachs’ bonuses will be announced next week on January 18, 2010.

Posted by Rebecca on January 13, 2010 at 1:05 pm.

CIT’s filing for bankruptcy. We have questions, and you may too.

Q:  Who is CIT Group?

A:  CIT Group is a commercial and consumer financier.  Basically, they extend lines of credit to their clients – in this case, small-to-medium sized American businesses.  With credit markets in turmoil, operating costs outpaced their received payments.  The government handed over a $2.33 billion cut of the Troubled Asset Relief Program, to ensure CIT could keep up its basic overhead.  It seems that was not enough, with the corporation narrowly avoiding Chapter 11 for some time now.

Q:  What is Chapter 11 Bankruptcy?

A:  Chapter 11 seeks to reorganize a failing business or corporation.  Over the summer, CIT Group argued that being forced into the standard procedures for Chapter 11 would cripple its customers.  On Sunday, CIT entered a different kind of bankruptcy, from which it will emerge from court protection by the end of 2009 under the ownership of its creditors, who widely supported the reorganization plan.

Q:  So what?

A:  The bankruptcy filing minimizes harm to its bondholders and core customers.  CIT’s customers are classically American – small-to-medium sized businesses mostly engaged in retail sales.  In this case, timing is everything.  With the holiday shopping season on the horizon, CIT’s clientele is exactly the sort that needs support.

Q:  Who’s upset about this?

A:   The American taxpayer, who sees a cool $2.33 billion flushed down the drain.  Complaints are on the rise in internet forums.  Most see this as inconsistency by the Fed, who promised assistance only to the largest banking institutions but is now supporting smaller ones.  Adding salt to the wound, CIT Group will never have to repay the $2.33 billion bailout money.

Q:  What’s a Joe or Judy Taxpayer to do?

A:  Nothing, for now, except to wait and see what happens.  If anything, people might try to look on the brighter side of the issue and take stock of the fact that the markets are strong enough for corporations to rely on credit lines outside the government’s pocket.  Public outrage and cathartic rants help to show where mistakes have been made, but don’t make this pill any easier to swallow.

What’s the best strategy for the taxpayer in this mess?

Posted by Tyler on November 6, 2009 at 1:32 pm.

Here’s the scenario:

Back in 2005, a French man living in Massachusetts wrote in complaining about Subway Restaurant’s advertisement of their new chicken cordon bleu sandwich.  A poster in a Subway Restaurant window read “Chicken and France… Somehow it just goes together.” The poster also featured a chicken dressed in what appeared to be a French military uniform. He found the poster to be disturbing because to him it was clearly racist, inflammatory, and insensitive. The man said, “They’re looking to sell a few sandwiches on the basis of the current anti-French sentiment?” He acknowledged that there are a lot of French people in the United States and that Subway Restaurant, as an international franchise, has shops in France and Quebec, so he had a hard time imagining this poster in restaurant windows there. He asked: “Are they violating any laws?”

Our take*:

Subway Restaurant exercised its usage of the First Amendment and free speech when creating and launching the cordon bleu campaign. Although the advertisement may have offended some consumers, there’s no inherent proof indicating that they intentionally sought to offend French people.

I read that Subway Restaurant did pull the cordon bleu advertisement campaign and apologized because they didn’t intend to offend anyone. Even though some people, including our friend that wrote in, took immediate offense to the advertisement, we can’t prove that Subway intended to create an inflammatory advertisement. In fact, Subway Restaurant responded saying that their “intention [was] to show to customers that fine French cuisine and our chicken sandwiches are a complimentary pairing,” which can be seen as flattering.

Subway Restaurant’s choice to cancel to the cordon bleu campaign actually emphasizes the economic rule that anything done in poor taste may hurt the business. Subway Restaurant ultimately made a business decision to pull the ads, which doesn’t imply an admission to violating the First Amendment.

All in all, it is unfortunate that a chicken dressed in a French military uniform was flagged as such a major offense. We hope Subway Restaurant learned a lesson about cultural sensitivity.

Posted by Adrienne on October 7, 2009 at 1:00 pm.

* Our in house attorneys helped us formulate this opinion. Although this is advice from lawyer(s), this is not legal advice. Always consult a lawyer for legal matters.

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Bank of America’s purchase of Merrill Lynch back in January of 2009 for $29 billion has brought the bank a lot of uninvited legal attention. After suffering a loss of $27.6 billion in 2008, Bank of America paid out $3.6 billion in bonuses to Merrill employees before closing the deal. The Securities and Exchange Commission (SEC), New York Attorney General Andrew Cuomo and other congressional investigators are probing whether or not Bank of America failed to disclose to shareholders Merrill Lynch’s losses and bonus payments before the merger was approved. And, the Department of Justice and the FBI have been conducting a criminal investigation about the Bank of America-Merrill Lynch deal for six months.

The SEC settled the civil fraud charges for $33 million in August of 2009. However, just last week, federal Judge Jed S. Rakoff of the Southern District of New York rejected the settlement noting that “it suited the immediate interests of the SEC and Bank of America, but neither the public interest nor that of Bank of America’s shareholders.” Rakoff notes that the SEC is only appearing to be tough on the bank, but in actuality is not as the SEC failed to probe Back of America executives and its attorneys. He ordered the case to trail in February of 2010.

Given that it is very rare for a federal judge to reject a major enforcement, the SEC defended the settlement noting, “We firmly believe that the settlement we submitted to the court was reasonable, appropriate and in the public interest.” The SEC noted that it couldn’t further learn what was discussed by Bank of America executives and attorneys as the bank declined to waive its attorney-client privilege; however, it believes that Bank of America did break securities laws by not forthrightly disclosing complete and accurate information about the bonuses paid to Merrill Lynch employees.

Now, a House panel, the Committee on Oversight and Government Reform, is further questioning the bank and has ordered that it cannot use the attorney-client privilege when operating with congress. Chairman of the committee, Representative Edolphus Towns, gave the bank until noon on Monday, September 21 to provide answers and legal documents. In a strongly worded letter, Towns inquired “when [Bank of America] became aware of the enormous losses at Merrill last year, when it received a commitment from the federal government for a second round of bailout money and what legal advice its management received about whether it had to disclose those developments to the bank’s shareholders.”

Bank of America missed the Monday deadline to turn in the merger documents.

What, if anything, is Bank of America trying to hide? Could it be that one of the nations’ largest and most powerful banks received the tax dollars of Americans as a bailout in one hand while distributing bonuses to the executives of the failed entity Merrill Lynch? The investigation continues — hopefully all will come to light and justice will prevail.

Posted by Adrienne on September 22, 2009 at 1:14 pm.