Bankers Gone Bonkers: Global Financiers Should Make Insanity Plea

[marmar]

from CounterPunch, via AlterNet:



Bankers Gone Bonkers: Global Financiers Should Make Insanity Plea

By Pam Martens, CounterPunch. Posted February 4, 2008.



A road map to how the banking industry landed itself in the financial loony bin.



With Wall Street capital disappearing as fast as foreclosures are climbing, one foreign head of state had an epiphany. French President Nicholas Sarkozy advanced the idea recently that the global financial system is "out of its mind."

To develop this theory further, I've reconstructed below some of the mileposts on our journey to this financial loony bin.

Exhibit One: Commit-a-Felony-Get-a-Bonus Contract

Back in 2002, Mark Belnick, who had previously been one of the legal go-to guys for Wall Street as a rising star at corporate law firm Paul,Weiss, Rifkind, Wharton & Garrison, found himself transplanted as General Counsel at fraud-infested Tyco International. Mr. Belnick inked a retention agreement for himself and it was duly filed without fanfare at the top corporate cop's web site, the Securities and Exchange Commission (SEC). The agreement guaranteed Mr. Belnick a payment of at least $10.6 million should he commit a felony and be fired before October 2003.

Very prescient fellow, Mr. Belnick was indeed charged with a few felonies like grand larceny and securities fraud by the Manhattan District Attorney's office. Mr. Belnick was acquitted of those charges and the SEC let him off the hook for aiding and abetting federal violations of securities laws with a $100,000 penalty payment and a prohibition against serving as an officer or director of a public company for five years. Mr. Belnick agreed to the SEC settlement without admitting or denying the charges. Mr. Belnick did not lose his law license and continues to practice law.

While Mr. Belnick was drafting his "felony bonus" agreement with Tyco, he was also teaching a law course at Cornell on ethics. Today, his agreement is available at the FindLaw.com web site as a "sample business contract," raising the suspicion that we as a society have become desensitized to financial insanity.

Exhibit Two: Supreme Insanity

On December 7, 2006, Wall Street was elated to learn that the U.S. Supreme Court had agreed to hear its case requesting that a no-law zone be drawn around its financial borders for acts of collusion and commercial bribery, such as those so well documented in the issuance of new stock offerings during the tech/dotcom bubble. Calling the matter an alleged "epic Wall Street conspiracy," the U.S Federal Court of Appeals for the Second Circuit had earlier turned down Wall Street for its requested grant of immunity.

The Wall Street firms and their legions of lawyers appealed to the Supreme Court, arguing that the SEC (which, by the way, has no criminal powers) should have sole authority to regulate it and, therefore, it should be immune from other U.S. laws governing collusion and commercial bribery. (Credit Suisse First Boston Ltd. v. Billings.) .......(more)

The complete piece is at: http://www.alternet.org/story/75858/