New York Times: Wall St. Firms to Pay $1.4 Billion in Settlement With Regulators. The agreement is a result of roughly five months of fractious negotiations between the firms and securities regulators. It is intended to force Wall Street to produce honest stock research and to protect analysts from pressure within the firm to issue upbeat forecasts to attract investment banking fees. Under the terms of the deal, brokerage firms will also be barred from dispensing hot stocks to top executives or directors of public companies.
So this is how it ends. The firms that made billions are fined a relatively small percentage of their ill-gotten gains. And the people who did the dirty work get away with it.
Does anyone really think Wall Street won’t find a way around these new rules in short order? Watch. They’re creative people in the financial markets. They can evade any rule in search of profits. And they will.
Wanting punishment is not about revenge. It’s to show that there’s an actual risk in cheating investors. The lesson from this settlement shows who takes the risk.
As usual, the ones who take the risks are the shareholders. The insiders got theirs, and it looks like they’ll get to keep their loot. What a system.