New York Public Employees Game the Pension System with Excessive Overtime, Says AG
by ilene - July 9th, 2010 1:09 am
New York Public Employees Game the Pension System with Excessive Overtime, Says AG
Courtesy of Jr. Deputy Accountant
Some New York public employees are spiking their pension benefits by working hundreds of hours of overtime as they near retirement, Attorney General Andrew Cuomo said on Wednesday.
For example, a police officer with a history of zero overtime worked more than 800 hours of overtime in his last years on the job, the Democratic gubernatorial candidate said in a report.
The pension benefits that state and local employees qualify for often are partly determined by how much they earn in the last few years at work.
This use of overtime, called pension padding, hurts New Yorkers as each year their taxes contribute $2.5 billion to the state’s Common Retirement fund, Cuomo said.
It appears as though everyone is doing it and what’s to stop them?
Cuomo calls the practice fraud though we’re sort of sketchy on that word being used in this sense since it’s allowed and wide-spread, fraud generally being the sort of thing that just a handful of unscrupulous individuals engage in driven by rationalization, opportunity or motive. Then again, I guess the rationalization is that these public employees have earned it, the opportunity is more than there since everyone is doing it and the motive is the same as always, more money. Greed is a powerful motivator and in an environment absent of control, it’s not hard to see how something like this could go down on a massive scale.
"You have some people who work no overtime throughout their career and then the last year or the last couple of years, all of a sudden, do hundreds of hours of overtime just for purposes of increasing the salary and increasing the pension. That is not an agreed to cost. That is not what was fair and right. That’s a fraud and that’s what we’re looking at," said Cuomo.
Them’s fightin words, Mr AG, hope you’re ready to get bit by the big bad public worker bee brigade.
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DiggIs That A Cop Investigating Big Banks?
by ilene - May 13th, 2010 4:29 pm
Is That A Cop Investigating Big Banks?
Courtesy of Karl Denninger at The Market Ticker
May 13 (Bloomberg) — U.S. prosecutors and the Securities and Exchange Commission are cooperating in a preliminary criminal probe into whether banks misled investors about their participation in mortgage-bond deals, the Wall Street Journal said, citing a person familiar with the matter.
The list is a who’s who of the big banks. JP Morgan, Deutsche Bank, UBS, Citigroup, Goldman, Morgan Stanley.
All in all eight banks are being scrutinized by both the toothless SEC but more-importantly Andrew Cuomo, who wields a fairly nasty set of powers through NY’s Martin Act.
Cuomo is investigating whether Goldman, Morgan Stanley, UBS, Citigroup, Credit Suisse, Credit Agricole SA, Deutsche Bank and Bank of America Corp.’s Merrill Lynch misled rating companies to obtain higher ratings, the New York Times said. Cuomo issued subpoenas on Wednesday, the newspaper reported.
Hmmmm… now that’s a good sign.
We know from the public data flow, including testimony before the Congress, that firms did use their knowledge of rating agency models to "tailor" submissions. Whether this rises to the level of intentional deception for the purpose of gaming the system remains to be determined, but that this sort of thing happened isn’t conjecture – it’s admitted fact.
"Changes to prevent it from happening again" are insufficient. Those who were defrauded, if they indeed were, are entitled not only to recompense but to criminal sanction against wrong-doers as a means of dissuading firms and individuals from doing it again.
I’ll believe this is real when I see handcuffs come out.
Full Suit By Andrew Cuomo Against Ken Lewis And Joe Price
by ilene - February 4th, 2010 1:29 pm
Full Suit By Andrew Cuomo Against Ken Lewis And Joe Price
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Courtesy of Zero Hedge
Highlights from the suit:
By early December 2008, Bank of America’s top management, including its CEO Ken Lewis and CFO Joseph Price, had two choices: they could tell the Bank’s shareholders about the huge material losses at Merrill since the merger proxy was filed, or they could hide them. Bank management chose to hide the information. In particular, Bank management failed to disclose that by December 5, 2008, the day Bank of America shareholders voted to approve the merger with Merrill Lynch, Merrill had incurred actual pretax losses of more than $16 billion. Bank management also knew at this time that additional losses were forthcoming and that Merrill had become a shadow of the company Bank of America had described in its Proxy Statement and other public statements advocating the merger. The Bank’s management thus left the Bank’s shareholders in the dark about fundamental changes at Merrill that were obviously important to their voting decision. These disclosure failures violated New York’s Martin Act.
Having obtained shareholder approval for the deal, Lewis then misled federal regulators by telling them that because 50% of Merrill’s tangible equity had disappeared, the Bank could not complete the merger without an extraordinary taxpayer bailout. Lewis went onto say how the Bank needed to “fill the hole” left by the unprecedented losses, which contradicted his public statements to the effect that the Bank would not need additional capital. Remarkably, between the time that the shareholders had approved the deal and the time that Lewis sought a taxpayer bailout, Merrill’s actual losses had only increased another $1.4 billion. The Bank’s management has not and cannot explain why they did not disclose to the Bank’s shareholders losses so great that, absent a historic taxpayer bailout, they threatened the Bank’s very existence.
On November 13, when Price knew of at least approximately $5 billion in after tax losses, Bank of America’s General Counsel, Timothy Mayopoulos, and lawyers from its outside law firm, Wachtell, Lipton, Rosen & Katz, determined the Bank should disclose the losses. The lawyers discussed the date of the disclosure, the manner of the disclosure, who would draft the disclosure, and that Price would approach Merrill CEO John Thain about the disclosure. Shortly thereafter, however, the decision was reversed, Wachtell’s role was marginalized, and the Bank made its
…
NY AG Cuomo Announces Fraud Charges Against Bank Of America For Merrill Lynch Merger
by ilene - February 4th, 2010 12:10 pm
NY AG Cuomo Announces Fraud Charges Against Bank Of America For Merrill Lynch Merger (BAC)
Courtesy of Joe Weisenthal and Lawrence Delevingne at Clusterstock
Today, Andrew Cuomo announced fraud charges against Bank of America and top executives over the Merrill Lynch merger debacle.
The charges are civil, but Cuomo says there are pending criminal investigations.
Here’s the full release:
ATTORNEY GENERAL CUOMO FILES FRAUD CHARGES AGAINST BANK OF AMERICA, FORMER CEO KENNETH LEWIS, AND FORMER CFO JOSEPH PRICE
Suit Alleges Bank of America’s Top Management Hid Skyrocketing Losses at Merrill Lynch
Bank of America Management Manipulated Federal Government into Granting Massive Taxpayer Bailout
NEW YORK, NY (February 4, 2010) – Attorney General Andrew M. Cuomo,
joined by Special Inspector General for the Troubled Asset Relief
Program Neil Barofsky, today announced a lawsuit against Bank of
America, its former CEO Kenneth D. Lewis, and its former CFO Joseph L.
Price for duping shareholders and the federal government in order to
complete a merger with Merrill Lynch. According to the lawsuit, Bank of
America’s management intentionally failed to disclose massive losses
at Merrill so that shareholders would vote to approve the merger. Once
the deal was approved, Bank of America’s management manipulated the
federal government into saving the deal with billions in taxpayer funds
by falsely claiming that they would back out of the deal without bailout
funds.
“This merger is a classic example of how the actions of our
nation’s largest financial institutions led to the near-collapse of
our financial system,” said Attorney General Cuomo. “Bank of
America, through its top management, engaged in a concerted effort to
deceive shareholders and American taxpayers at large. This was an
arrogant scheme hatched by the bank’s top executives who believed they
could play by their own set of rules. In the end, they committed an
enormous fraud and American taxpayers ended up paying billions for Bank
of America’s misdeeds.”
“The events surrounding the Bank of America/Merrill Lynch merger and
the United States Government’s investment in Bank of America through
the Troubled Asset Relief Program are an important part of the history
of the financial crisis,” said Special Inspector General Neil
Barofsky. “Attorney General Cuomo and his staff, working hand…
Amgen vs. Cuomo
by ilene - October 30th, 2009 4:58 pm
Amgen: Cuomo’s Full Of It (AMGN)
Amgen has responded to the charges of corruption and fraud related to its big anemia drug, Aranesp, made by New York Attorney General Andrew Cuomo today along with 14 other states.
Amgen spokesman David Polk told us "We believe that the allegations are without merit, and we look forward to the opportunity to examine these matters with the states before the Court."
Polk adds: "Because this lawsuit is now in litigation, we are limited in our remarks," and that "Amgen has a solid compliance program and Code of Conduct called “Do The Right Thing,” and we expect that all of our employees follow it at all times."
AMGN was down 0.56 today, or -1.03%.
See also Lawrence Delevingne’s earlier entry:
Amgen Down As Cuomo Alleges Massive Corruption, Kickbacks, And Fraud (AMGN)
Breaking from the New York Attorney General’s Office:
his office into a nationwide kickback scheme to boost drug sales.
In a lawsuit filed today in federal court the states charge drug manufacturer Amgen, International Nephrology Network (INN), a specialty group purchasing organization, and ASD Healthcare, a wholesaler, with offering kickbacks to medical providers to increase sales of Amgen’s anemia drug, Aranesp.
“Drugs should be prescribed to patients on the basis of need, effectiveness, and safety, not on a corporate giant’s promise of an all-expense paid vacation,” said Attorney General Cuomo. “In an egregious violation of the law, Amgen allegedly bribed medical providers and left taxpayers footing the bill for free drug samples. My office’s Medicaid Fraud Control Unit will continue to work with our partners in other states to uncover these kinds of abuses.”
According to the multi-state complaint, the companies would encourage medical providers to bill third party payers such as Medicaid for free Aranesp that were provided at no cost. Amgen is further alleged to have conspired with INN and ASD Healthcare to offer illegal kickbacks to medical providers, such as sham consultancy agreements, weekend retreats, or other services to induce them to purchase and prescribe Aranesp with the intention and effect of increasing sales of Aranesp and converting new providers from competitor drugs to Aranesp.
As a result…
All The Juicy Bank Bonus Details Compliments Of Cuomo
by Zero Hedge - July 30th, 2009 2:27 pm
All The Juicy Bank Bonus Details Compliments Of Cuomo
Courtesy of Tyler Durden
With a title like "The ‘Heads I win, Tails you lose’ bank bonus culture", what’s there not to like about Cuomo’s latest. Also, sheds some light on why perpetuating a grossly inflated Ponzi market is where it’s at come December.
In summary, number of employees making over $1 million:
- Bank of America: 172
- BoNY: 74
- Citi: 738
- Goldman: 953
- JP Morgan: 1,626
- Merrill: 696
- Morgan Stanley: 428
- State Street: 44
- Wells Fargo: 62
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the Favorites backup site
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