Letting the Banking Rats Out of the Bag

The good judge smelled a rat.

“Was there some sort of ghost that performed these actions?” New York federal Judge Jed S. Rakoff demanded to know Monday in rejecting a deal that would let Bank of America off the hook in yet another banker bonus scandal. The Securities and Exchange Commission had charged the bank with covering up for outrageous bonuses given out at Merrill Lynch as the bank acquired the failed stockbrokerage, and now it was letting the bank off the hook with a chicken-feed fine.

“Do Wall Street people expect to be paid large bonuses in years when their company lost $27 billion?” the judge asked, and Lewis J. Liman, the lawyer for Bank of America, assured him they do: “My God! Bonuses on Wall Street? It is not a matter of surprise.” More