Suing Bank of America
Bank of America has recently settled a lawsuit with two public pension funds for $ 160 million. The case involved BofA's purchase of Merrill Lynch. Who pays for this?
As in many things, no one seems to ever ask the question: who pays? Instead, folks bask in the view that the bad guys got their due. But, did the bad guys get their due in the BofA case?
BofA is a public company. The biggest single owner of BofA are American workers of slightly above average income. How do they own it? In their pension funds.
The next largest owner is another set of average Americans -- folks who own mutual funds either in their IRA accounts or in the brokerage accounts. These folks have saved this money, invested it, and have ended up as a major owner of BofA.
So, when you ask who pays, look in the mirror. The two public pension funds who won $ 160 million in the case will be paid essentially by the owners of BofA, the single biggest group being other public pension funds. So, to make it clearer: in effect, the public pension plans of Louisiana have successfully sued the public pension plans of Arizona, New York, California, etc. One public pension plan is dipping its hands into the pockets of another pension plan. Does that sound like "getting the bad guys" to you?
If all that is going on is one group of average Americans are suing another group of average Americans (who are, by and large, unaware that they are being sued), who really wins?
That's easy. The lawyers. They are the ones who loudly trumpet these lawsuits and lobby hard to see to it that damage awards and other financial penalties are not limited by state and federal law. It's great to see those average Americans who own BofA get what they are due. "Sock it to the little guy." That's the message of the BofA lawsuit.
Meanwhile, the perpretators of whatever went wrong are completely unaffected by the outcome of this lawsuit. They are highly paid executives of BofA, that bear no penalty whatsoever from the outcome of this lawsuit. Even if they own stock, the company typically simply grants them more stock if the value of the their holdings have fallen.
So, as in other things, rich folks roll merrily along unscathed, while middle class Americans are crushed once more.
Anytime you read about a public corporation being sued for some malfeasance -- think Enron, Exxon, World Com, whoever -- and you wonder who pays if the lawsuit is successful, look in the mirror. It's the little guy that pays for all of this litigation. The Enrons of the world aren't owned by some rich bad guy. The Enrons of the world are owned by average Americans, mostly trying to save for their old age. These lawsuits make it tougher for these folks to retire. But, the media seems to think that bludgeoning the retirement hopes and dreams of the average American with these kinds of lawsuits is "getting the bad guys." I guess that tells us who the media really thinks the bad guys are.
Meanwhile the Wall Street Journal reported yesterday that Bank of America was planning more layoffs. Maybe BofA needed to produce some cost cutting to pay off the recent victory by the plaintif lawyers. That should get the bad guys! Sock it to them!
As in many things, no one seems to ever ask the question: who pays? Instead, folks bask in the view that the bad guys got their due. But, did the bad guys get their due in the BofA case?
BofA is a public company. The biggest single owner of BofA are American workers of slightly above average income. How do they own it? In their pension funds.
The next largest owner is another set of average Americans -- folks who own mutual funds either in their IRA accounts or in the brokerage accounts. These folks have saved this money, invested it, and have ended up as a major owner of BofA.
So, when you ask who pays, look in the mirror. The two public pension funds who won $ 160 million in the case will be paid essentially by the owners of BofA, the single biggest group being other public pension funds. So, to make it clearer: in effect, the public pension plans of Louisiana have successfully sued the public pension plans of Arizona, New York, California, etc. One public pension plan is dipping its hands into the pockets of another pension plan. Does that sound like "getting the bad guys" to you?
If all that is going on is one group of average Americans are suing another group of average Americans (who are, by and large, unaware that they are being sued), who really wins?
That's easy. The lawyers. They are the ones who loudly trumpet these lawsuits and lobby hard to see to it that damage awards and other financial penalties are not limited by state and federal law. It's great to see those average Americans who own BofA get what they are due. "Sock it to the little guy." That's the message of the BofA lawsuit.
Meanwhile, the perpretators of whatever went wrong are completely unaffected by the outcome of this lawsuit. They are highly paid executives of BofA, that bear no penalty whatsoever from the outcome of this lawsuit. Even if they own stock, the company typically simply grants them more stock if the value of the their holdings have fallen.
So, as in other things, rich folks roll merrily along unscathed, while middle class Americans are crushed once more.
Anytime you read about a public corporation being sued for some malfeasance -- think Enron, Exxon, World Com, whoever -- and you wonder who pays if the lawsuit is successful, look in the mirror. It's the little guy that pays for all of this litigation. The Enrons of the world aren't owned by some rich bad guy. The Enrons of the world are owned by average Americans, mostly trying to save for their old age. These lawsuits make it tougher for these folks to retire. But, the media seems to think that bludgeoning the retirement hopes and dreams of the average American with these kinds of lawsuits is "getting the bad guys." I guess that tells us who the media really thinks the bad guys are.
Meanwhile the Wall Street Journal reported yesterday that Bank of America was planning more layoffs. Maybe BofA needed to produce some cost cutting to pay off the recent victory by the plaintif lawyers. That should get the bad guys! Sock it to them!
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