Employees of Bear Sterns, the financial giant that was among the first failures of the subprime mortgage crisis in 2008, claimed in a lawsuit that the bank mishandled its investments (duh), causing them to lose money in an employee stock ownership plan that was part of a retirement package. Today, the Southern District Court of New York approved a $10 million settlement to be shared among thousands of employees. The number may seem big, but it’s really more of a drop in a dingy bucket, accounting for between 10-28% of their total losses in the stock. According to Reuters, more than 8,400 employees lost about $215 million in the collapse. The settlement means that the former Bear Stearns (now owned by JPMorgan, who shilled out the settlement money) will never have to answer as to whether they knew their investment plan was unsustainable and risky. If it went to court, in light of the recent $25 billion federal mortgage settlement, I’d like to think they’d have little to say in response.Google+
Apparently civility is the kind of thing that needs to be enforced by a court. A few weeks after a settlement banning school administrators in Texas from promoting religious displays, U.S. District Judge Fred Biery issued an order forcing certain school employees to apologize to the plaintiffs in the settled case. The settlement included a term forbidding administrators and employees from “disparaging” the plaintiff’s family, some agnostics who had objected the the promotion of prayer in a San Antonio graduation ceremony. The superintendent of the school district then nearly immediately disparaged the plaintiff’s family in a televised interview, not deigning to wait even a few hours after the settlement was reached. Later, the director of the high school marching band accused the plaintiffs of “lies and false accusations” on Facebook, a statement that could be construed as slander, should the plaintiff be able to prove that she is not a liar.
Judge Biery then issued a “Non-Kumbaya” order, essentially claiming that the defendants in the case need not be perfect friends with the plaintiffs, holding hands and singing “Kumbaya” together and whatnot, but that they must at least be publicly amicable and civil. The order required two signed documents within ten days: one noting that the defendants have apologized for their outbursts, and one noting that the plaintiffs have accepted the apology. In his order, Judge Biery stressed that “silence is golden”, and that some people, such as Richard Nixon and Bill Clinton, have paid a price for “talking too much”.
It’s a sad state of affairs when a judge has to step in to force someone to be graceful and reverent by order of the court. Makes it hard to believe that Coach Taylor could train such stand up players in an environment full of sore losers.
- A settlement has finally been reached in the Michael Jackson secret recording case. In 2003, as Michael Jackson flew to Santa Barbara, California to turn himself in on child molestation charges, the jet company he hired conspired to record the pop singer and his lawyers. Shortly thereafter, Jeffrey Borer of XtraJet attempted to sell the video to media outlets in the ensuing media frenzy of that particular trial. Not exactly the machinations of a smooth criminal, here. Now, nearly a decade later, Jackson’s attorneys have reached a $750,000 settlement with the now-defunct company, meaning Borer will never have to go to trial for invasion of privacy.
Mets fans are used to errors on the field, but not in the bank. Fred Wilpon and Saul Katz, the owners of the New York Mets, have settled a lawsuit concerning their profits from the much-publicized Bernie Madoff Ponzi scheme, the biggest investment fraud ever conducted. Irving Picard, the trustee hoping to recoup the investments lost in the Madoff case, had sued the Mets owners accusing them of “willful blindness”, or that they were aware of Madoff’s fraud, but ignored it because they were making money. Early adopters of Ponzi schemes often make money in the time it takes to collapse. The settlement today makes sure that those claims of willful blindness never go to court, claims which Picard thinks a jury would have found true. Jury selection for this trial was set to occur this morning. Luckily for the Mets, the owners settled for $162 million, nearly half of the $386 million they could have had to pay out. This is in addition to the $83.3 million in profits the judge in this case had already ordered to be paid back.
It will be interesting to watch how the rest of the Madoff damages litigation pans out. Despite the 74-year-old head honcho already convicted and in jail for a 150-year term, the recovery effort is still going strong, with Picard getting about $11 billion of the lost $17.3 billion returned. It is a little late in the game now, but who knows. Maybe all those rich people who trusted their money with a flimsy criminal will get their money back. Also, maybe pigs will fly. Here’s hoping!
- Our blog post on Ponzi schemes
- The National Post article about this settlement
- An interesting take on the recent Goldman-Sachs quitter and Bernie Madoff
Via AP: When smartphones first came on the market, telephone companies offered “unlimited” data plans cheaply in an effort to attract users. Back then, there were so few smartphones, and even fewer users who used more than a couple of gigabytes of data, that advertising these unlimited plans would mean a great many people would buy them without using much data at all. As smartphones became more ubiquitous and easier-to-use, though, the number of heavy users on unlimited plans rose to the point where they outnumbered regular users, and it was no longer profitable to sustain truly unlimited use. Then, AT&T did something incredibly boneheaded: they started capping data use for certain unlimited plans. In a textbook “do not do this” move, AT&T throttled the service for the top 5% of users, or slowed it down until phones were rendered nearly useless for anything other than calls and texts. This varied by area, too. The top 5% in New York City would be using a vastly different amount of data than the top 5% in Middle-of-Nowhere, Kansas. Many customers subsequently sued AT&T for false advertising. Rightfully so, because I can’t imagine “unlimited” to mean anything other than “not limited at all”. AT&T has since announced that it will be throttling data at 3GBs/month for all unlimited users, not just the top 5%, which brought up yet another problem: limited users pay $30/month for 3GB of data, the same as so-called “unlimited” plans. All in all, AT&T’s handling of the affair has been a major clusterwhoops.Google+