Former Bear Stearns Execs & Massive Fraud

 J.P. Morgan contends that the Bear Stearns fraud MBS securitization activity leading to the just announced civil fraud lawsuit allegations occurred before they bought the company in May of 2008.  It would be very far less than surprising for the case to be settled in the future with J.P. Morgan negotiating a settlement acknowledging violations or improper behavior - but also laying the blame on the executives of Bear Stearns as the parties running the outfit at the time.  That another group of individuals did it - not us.  We merely bought the company after the fact at the behest of the Federal Reserve and Treasury.

Which would leave a thinking individual to ponder the following questions:

"Whatever happened to the top executives at Bear Stearns responsible for this mess?  Weren't they charged with violations as individuals?".

The quick answers are "nothing" and "no".

It seems J.P. Morgan (somehow) came up with $9 billion to set aside to cover a settlement with shareholders and other investors in Bear Stearns in June of 2012.  Those hit with the impact of the $22.5 billion lost on securities issued in 2006 and 2007.  Totally unaffected by this were the stellar group of people in charge at Bear - the ones who violated Sarbanes-Oxley regulations regarding SEC reporting and any other number of standards.

(Actually, I shouldn't say unaffected.  Some were party to a $275 million agreement - apparently none of which they had to actually pay themselves).

Here they are:  Alan D. Schwarz, President and CEO; James E. Cayne, Chairman of the Board; Jeffrey M. Farber, Sr. VP & Controller; Alan C. Greenberg, Chairman of the Executive Committee; Jeffrey Mayer, Executive VP & Co-Head of Fixed Income Division; Samuel Molinaro, Ex VP & COO; Michael Solender, General Counsel.

All these fraudsters people are free as birds (ala Jon Corzine).  Jeffrey Farber was even so highly thought of that he was appointed to a high level executive position at taxpayer-owned AIG.  He and all the others are out just doing what the 1% generally do in this country.

It is patently absurd that our legal system would proceed against J.P. Morgan in a civil fraud lawsuit  addressing the behavior of Bear Stearns without ever going after the principals of Bear Stearns itself. To basically allege fraud took place, but never take action against those who they contend perpetrated it.

I guess this makes about as much sense as anything else going on in today's world.