The SEC and Ken Lewis vs. You

This story, cited many other locations, was interesting. There was a lot of misconduct surrounding Bank of America's buyout of Merrill Lynch. Bank of America was fined, but the net effect of the fine is a slap on the wrist.

Overall, the buyout of Merrill Lynch was a lousy deal for Bank of America shareholders. I own some shares of BAC, and got ripped off worse than Madoff's investors. Some of Madoff's investors qualified for an SIPC bailout, but I lost most of my investment in BAC. I thought that BAC and C were a "safe and conservative" investment. I should sell and buy gold. I'm keeping my current State paper investments for now, but I've decided that all future investment is going to GLD or SLV or physical metal.

To recap all the abuses that occurred:

1. The buyout was a really sweet deal for Merrill Lynch's shareholders and management. BAC shareholders got ripped off.
2. Executives at Merrill Lynch paid themselves huge bonuses just before the buyout deal closed.
3. Allegedly, insiders at the Federal Reserve pressured executives at Bank of America to buyout Merrill Lynch.
4. Executives at Bank of America should have invoked the "Material Adverse Change" clause to back out of the merger. After carefully reading Merrill Lynch's books, executives at Bank of America discovered that Merrill Lynch's financial situation was much worse than they expected. They could have invoked the "Material Adverse Change" clause to back out of the merger. Such a clause exists to protect the buying firm, in case circumstances change after the merger deal was originally signed. Due to political pressure, executives at Bank of America didn't back out of the merger.
5. Bank of America executives misrepresented the deal to shareholders, so they would vote in favor of the merger.
6. All of the above occurred while Bank of America was receiving State bailout money.
   

The net result is that the SEC charged Bank of America a fine. The management didn't pay the fine with their own personal money. Management paid the fine out of Bank of America's corporate money. Suppose Bank of America received bailouts totaling $100B and the SEC charged BAC a $1B fine. Equivalently, you could say that BAC received a $99B bailout instead of a $100B bailout.

The net overall effect is that the executives suffer no negative consequences for their misconduct. Via sovereign immunity, they are protected.

Even if you have no relationship with Bank of America, you still paid for their State subsidy/bailout via inflation. The only way to boycott the financial industry is to use real money (gold and silver) and to stop paying income taxes. Under the present system, financial industry insiders get a cut out of all productive work, via their ability to print and spend brand new money.

The SEC is a "captured regulator". The SEC is advocating for the interests of financial industry insiders, and not for the American's they're supposed to protect. The SEC is an evil fnord. The SEC provides the illusion that the State is preventing crime, while the SEC is actually a rubberstamp for the looting and pillaging of insiders.