President Obama has nominated Antonio Weiss as Undersecretary of Treasury overseeing domestic finance. Senator Elizabeth Warren takes umbrage; mouthpiece for the rich and powerful Andrew Ross Sorkin defends the choice.
Weiss is the lead investment banker for Lazard, an investment management firm overseeing $186 billion in assets. Literary aficionados will note that he uses his substantial fortune to prop up The Paris Review, where he is publisher.
Senator Warren's central problem with Weiss's appointment (beyond his deep Wall Street credentials) is his role in the Burger King/Tim Horton's merger, which she calls:
a tax deal, plain and simple. It was designed to reduce Burger King’s tax burden, and Weiss was an important and highly paid part of the team.
Sorkin, naturally, waives off the Senator's concerns, calling it a mischaracterization of the merger.
More troubling to me is Weiss's stock vesting contract with Lazard. Many people working in high finance have employment contracts which give them a stock option bonus if they stay with the company long enough. For example, an employee may have two million dollars in stocks vest only after they stay with the company for five years (think of this like a retention bonus-- a reason to stay with the company long-term). These contracts, however, also allow the employee to receive their bonus early-- even if they don't stay for the full time period-- if they take a high-level government finance job. The contracts usually specify that these have to be "high-level" and "finance-related," or else they don't get paid the bonus. In other words, banks pay their employees a bonus become government regulators. Weiss has one of these for $20 million.
Now, proponents say this is an incentive for financiers to devote part of their life to the public sector without feeling they have to work around bonuses. Opponents say these firms have no incentive to pay their employees bonuses for unfulfilled future work for the company which doesn't get done, that these companies never once do something out of the good of their heart, and that these contracts are there only to keep the revolving door between government and Wall Street a-spinnin'. Are the opponents right? Probably? Definitely? Absolutely? Is it troubling that Weiss is being paid an 8-figure bonus by a domestic investment bank specifically to quit and head a regulatory body that oversees domestic investment banks? Gosh. I don't know. Jury's out.
Every few months, the Consumer Financial Protection Bureau, the federal agency that oversees the debt collection industry, releases a report on the state of the industry. The latest Fall 2014 Supervisory Highlights takes a look at credit reporting, student loan debt, and the usual bevy of illegal activities and cut corners undertaken by debt collectors.
The Association of Credit and Collection Professionals does an alright rundown of the report:
"The assumption they make is that I won't blow up my life to do it. But they're wrong about that."
These are probably not words anyone at JPMorgan Chase wants to see, in print, from a former in-house attorney at JPMorgan Chase.
During JPMorgan's settlement with the Department of Justice, the DOJ had a key insider witness to wrongdoing that it held out as leverage to increase its settlement with JPMorgan. It worked; after the existence of the witness made headlines, JPMorgan's settlement offer increased by several billion-- nearly doubling. But the witness was never heard from again, and the DOJ signed a confidential settlement agreement with JPMorgan.
Here to violate the confidentiality agreement is Alayne Fleischmann, said former JPMorgan in-house attorney and key insider witness, whose extensive interview with Rolling Stone was published last week.
It's got everything-- no email deals, CDOs intentionally constructed of NINA loans, deliberate obfuscation of wrongdoing by JPMorgan and DOJ attorneys, inflated settlement terms, and retaliatory firings.
From Rolling Stone: "She believes the proof is easily there for all the elements of the crime as defined by federal law – the bank made material misrepresentations, it made material omissions, and it did so willfully and with specific intent, consciously ignoring warnings from inside the firm and out."
In Japan, the new bar exam has resulted in a steep increase in the overall number of lawyers to some 35,000 this spring. This compares with 22,000 in 2001. Tinkering with the cutoff score has driven down the number of those passing the bar this year to 1,810, the first time since 2006 that the number has fallen below 2,000.
Sound familiar, lawyers and law students?
Turns out the problem is not unique to America. The Japan Times continues:
Once considered a lucrative career, the practice of law is undergoing far-reaching changes that call into question the future of all except top-tier law schools.
I've written about the future of law practice before, so I'll refrain from repeating myself. But the Japan Times gets it, too:
One of the reasons for the change in the legal landscape in the U.S. is the outsourcing of legal work to India, where low-paid paralegals do the work once performed by full-fledged lawyers. In addition, the use of new software provides law firms with greater efficiencies than existed in the past.
Attention, prospective law students! Are you a robot, or a labor-saving computer program? If so, you have made the right choice. Enjoy your 1L classes and the bright career path paved before you!
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