Ah, the seasons turn from summer to winter to spring…predictable. And just like the seasons we can count on one almost predictable fact: no one of consequence will go to jail for the robbery of the economy, the obliteration of millions of jobs and trillions of dollars of wealth. Nope, slap on the wrist. Every. Time. And, ladies and gents, the next example: S&P.
Please, spare me the drama:
S.&P., which is owned by McGraw Hill, has agreed to settle an array of government investigations stemming from 2011, paying nearly $80 million, federal and state authorities announced on Wednesday. As part of the deals, reached with the Securities and Exchange Commission and the attorneys general in New York and Massachusetts, S.&P. agreed to take a one-year “timeout” from rating certain commercial mortgage investments at the heart of the case, an embarrassing blow to the rating agency.
And:
The settlement, which came on top of an action filed against a former S.&P. ratings executive, is the S.E.C.’s first action against a top ratings firm. Despite the central role that rating agencies played in the crisis – awarding inflated credit ratings to mortgage investments that spurred the meltdown – they faced no S.E.C. penalties.Yet the Justice Department and several state attorneys general did take action, suing S.&P. in connection with the crisis. After fighting that case for two years, S.&P. has now reached a tentative settlement that would require it to pay $1.37 billion, a penalty large enough to wipe out its operating profit for a year.
Let’s be clear what the culture of this racket was. As an Australian court found, as I wrote two years ago, S&P had “deceived” and “mislead” investors.
Did anyone lose their job in the executive suite as part of this deal?
Answer: NO.
Will any of the executives pay out of their own pockets?
Answer: NO. As with all of these fines, the money comes out of the corporate treasury and ends up being paid for by shareholders and/or customers–not the executives who engineered and managed the scam.
Did anyone go to jail over this scam?
Answer: NO.
What is the lesson one learns if you work in this industry?
Answer: I can do anything. I can break the law. I can make tens of millions of dollars and screw the little people. And I will never pay a personal price. Never. I will keep my job. I will make more money. And, let’s do this again.
Nope, The Laughter You Hear Comes From Wall Street and The Banks who just can’t believe their good fortune.
One Response to “S&P Gets Slap-On-The-Wrist $80 Million Fine: Same Old Story About The Wall Street Robbery”
Trackbacks/Pingbacks
[…] seems like…just a week ago that I wrote about a proposed slap-on-the-wristfor Standard & Poor’s. Ah, and it’s the gift that keeps on giving. But, this one may […]