2009 November, 30th

Phil Butler

Forbes released a list the other day of what they termed “Outrageous” CEO’s of 2009. I guess they were trying to avoid a law suit if they had called the people on the list “crooks” or something even more negative. Many of the CEO’s at the top of everyone’s lists of Wall Street profiteers are only under investigation, while some others have yet to be implicated in anything other than being some of the most arrogant and insufferable cads I ever heard of. So, without further profundity on my part, here is Forbes’ list with a little added information about their activities.

Number 1 – Lloyd Blankfein

Forbes puts Goldman Sachs’s CEO at the top of what they term “The Most Outrageous CEOs Of 2009″ for one reason only – his arrogance in the face of economic disaster. In an interview with The Times, Blankfein was in true form for the next lead in “Devil’s Advocate Two” in place of Al Pacino. At one point Sachs’ CEO suggested he is; “just a banker doing God’s work.” Nothing criminal has as of yet surfaced with regard to GS or Blankfein. However, at a time when the world was staggered by the weight of all these schemes, losses, and mismanaged bozo banking, GS recorded its greatest profits in history. It is important to note too that much of what has gone on is at least in some way related to Goldman Sachs, either through former executives, leveraged positions, and some think direct manipulation by GS. If Blankfein does not become the most hated man on the planet soon, he will have missed a darned good chance. Everyone from Forbes to the WSJ and beyond failed to get his apocalyptic humor. One thing seem clear to this writer, if GS and/or Blankfein are ever indicted for anything, there may not be a trial. People are far too hurt to tolerate billions in bonuses to bean counters with an attitude much longer.

Number 2 – John Thain

This former CEO of Merill Lynch pushed through over $3.6 billion in bonuses ahead of the announcement that Merill lost over $25 billion in 2008. Thain is another of these top executives observed as being, shall we say “extravagant”, as evidence of ridiculous expenditures for furnishings and etc surfaced. a probe by New York Attorney General Andrew Cuomo has been instigated to investigate possible criminal activity by Thain since the bonus payouts came just days before the Bank of America takeover. The investigation of Thain, Bank of America and other principles involved in this era or Wall Street history is ongoing. For Thain’s part, he is stoic in his apparent arrogance over the whole affair. Thain has been one of Wall Streets best compensated executives, having received bonuses in excess of $15,000,000 in a single year.

Number 3 – Raj Rajaratnam

The U.S. Attorney has charged Rajaratnam, founder of the $3.7 billion hedge fund Galleon Group, with securities fraud. The charges allege that Rajaratnam brought in some $33 million in illicit profits via inside trading. According to the charges major US firms are indicated as targets of Rajaratnam’s activities including; IBM, Google, AMD, and Hilton Hotels, and others. Accordingly, it is suggested that top executives at these business provided key insider information. The ever broadening case against Galleon and other defendants may prove to be the largest insider trading investigation ever. Wire taps, defendants plea bargaining, and further information are suggested to possibly even point to the “top of the hedge fund mountain” the $16 billion hedge funds of S.A.C. Capital Management, or at least authorities are now hinting at this. Billionaire Rajaratnam is also suspected of helping to fund the Sri Lanka terrorist group the Tamil Tigers.

Number 4 – B. Ramalinga Raju

B. Ramalinga Raju, founder of Satyam Computer Services (hey that is where some American jobs went to – outsourcing), confessed to overstating his outsourcing company’s profit over several years, as well as manipulating cash balances in excess of $1 billion. Other methods of misleading investors and the government included; creating over 10,000 fictional employees, using his mother’s name to buy land with the ill gotten gains, forgery, breach of trust, and other fraudulent activities.

Even today, news of more instances where Raju and his accomplices might have siphoned money through Satyam Computer Services and other holdings. The numbers are up from the $1.2 billion estimate to over $2 billion now. Even the world’s most trusted accounting firm PricewaterhouseCoopers, has been implicated in some aspect of this case. Their former CEO Samuel DiPiazza Jr., having recently resigned (uh oh) amidst warnings from the Indian government would take action against the firm if they are involved. DiPiazza made frequent trips to India to consult with clients there and government officials.

Number 5 – Thomas Petters

Thomas Petters went on trial back in October for allegedly orchestrating a $3.5 billion fraud. The Minnesota business man was investigated and charged by Federal prosecutors accused him of, you guessed it, another Ponzi Scheme. Interestingly, Petters’ businesses aside Petters Group Worldwide included some fairly recognizable brands like Fingerhutt, Polaroid, Sun Country Airlines, uBid, and others.

The criminal complaint against Petters also leaves the door open for convicting him of money laundering as well. As anyone profiling these executives might discover too, Petters is a noted philanthropist too. His case is before a jury as I write this. If convicted, he could serve a life term. Perhaps he should have contributed to the bureau of prisons?

Number 6 – Edward M. Liddy

AIG CEO Edward Liddy came under intense scrutiny when news that $165 million in retention bonuses were being paid out to the very people responsible for the insurance giant’s failure. Liddy claimed the company was legally obligated, while detractors insisted that these payouts essentially negated much of the $200 billion in bail out money. Liddy also tried to defend the company’s now famous “retreat” for execs which occurred right after AIG received bail out money. As for Liddy’s claim that the bonuses were “distasteful but necessary”, a later letter revealed he had actually accelerated the payment of the bonuses. Combining all this with the fact that Liddy owns a substantial amount of Goldman Sachs, sits on the boards of 3M and Kroger, is former CEO of Allstate, was formerly on the board of GS, and is still another “philanthropic” banker type – he should probably be further up the Forbes list too if for no other reason than arrogance.

Number 7 – Danny Pang

The FBI arrested Danny Pang, founder and former CEO of Private Equity Management Group, back in April. The charges against him ranged from masterminding still another major Ponzi Scheme to evading(PDF of filing) government disclosure fees. Pang died under somewhat mysterious circumstances before he could be brought to trial. An autopsy ruled out foul play, but n a toxicology report is still pending even now. Pang’s alleged activities represent hundreds of millions of dollars in primarily Taiwanese investors’ money. The receiver of Pang’s frozen assets called his company’s estimated $4 billion in assets; “Pang’s personal piggy bank.” Pang’s death will certainly limit further investigations.

Number 8 – R. Allen Stanford

Former billionaire R. Allen Stanford was indicted in June along with his co-defendants for allegedly selling $7 billion in CD’s via his Stanford International Bank, and then making personal loans to himself to the tune of almost $2 billion. He is also charged with bribery in an effort to cover up his wrongful deeds, and to obscure them from the SEC. Since the FBI’s raids on his various offices, Standford has also been suggested as owing hundreds of millions in Federal taxes alone.

Stanford’s alleged Ponzi scheme, and particularly the investigation into probable money laundering activities connected with Mexico’s Gulf Cartel drug trafficking organization, stand to label Stanford as one of the biggest crooks in investment banking. He will probably move up on Forbes’ list should all the charges prove true.

Number 9 – David Rubin

David Rubin was indicted by the Department of Justice for allegedly rigging auctions on municipal bonds. Rubin is the founder and chief executive of CDR Financial Products, a bond brokerage. According to the indictment, banks participating in the rigging kicked back almost half a million to Rubin and his firm. Also implicated in the rigging were Bank of America Corp., UBS AG (who ratted out Moran below), and JPMorgan Chase & Co., all of whom are being sued. No one at Bank of America or the others has as of yet been indicted? The latest news on this also implicates General Electric and a former subsidiary of Belgian bank Dexia SA. This David Rubin “rabbit hole” appears to be much deeper than half a million bucks though. Rubin’s firm has handled investments for municipalities to the tune of nearly $160 billion since it was founded in 1986.

There are also indications of political contributions which may lead to top level officials potentially involved. Of course Rubin denies he did anything wrong, and has yet to come to trial. His company alone may face $100 million in fines for bid rigging, but even that could be the tip of the iceberg. This is not the first time Rubin has been implicated in wrong doing. The SEC previously condemned Rubin (depicted right as the mystery man) for suspicious activity. Notice a common denominator here?

Number 10 – Robert Moran

In November Ft. Lauderdale yacht broker Robert Moran was sentenced to two months in prison by a federal court. Moran established a Swiss bank account with UBS and did not report the earnings deposited there. UBS was forced to report the accounts of thousands of other clients in the US as well. Moran was the first to plead guilty in the largest tax evasion discovery in history.  Founder and chief executive of Moran Yacht & Ship, Moran had pleaded guilty in April to the charges of tax fraud. He had concealed $3 million from the IRS via his UBS account. Moran has subsequently lost his license to broker yachts due to the felony conviction.

Moran’s “slap on the wrist” is effectively worthless as Brian Moran, and Paul Moran can surely continue business as usual. Of course Moran told reporters he was sorry he had opened the Swiss account, when he came to the realization it was wrong? Given the economic client in the world, the thousands of crooks now being exposed, we think he should have been made to feel much more sorry. How long would you get for evading the IRS for $3 million?

Who’s Next?

One thing is certain in all this, by the time the whole story is told Wall Street’s and others will have perpetrated the most devastating, widespread, and costly and yes evil crimes against humanity ever committed. Literally everyone on this planet has been affected negatively. Trillions of dollars, millions of jobs and a reallocation of resources of wealth of staggering proportions has taken place. Most significantly for many, may be the fact that most of it occurred under the “watch” of the Bush Administration. Those indicted in the list above only represent the perpetrators who were not as smart as their co-conspirators.

Imagine how much was taken and how many there may be who were more careful in their associations and actions. This is a worldwide epidemic if anything, and involving in one way or another some of the largest corporations, political and business leaders, and God knows what else. It is extraordinarily pungent and inappropriate how Goldman Sachs’ CEO can be so arrogant and flippant about any of this.

• 2009/11/18 -- Goldman Sachs and the American Buy Out
• 2009/10/22 -- Wall Street’s Part In the Murder of the World Economy
• 2009/10/20 -- You’re In Good Hands With Wall Street
• 2009/07/14 -- Goldman Sachs Profits Reach Vampire Proportions
• 2010/01/21 -- Goldman Sachs or Morgan Stanley, Choose Your Shark [update]
• 2010/01/16 -- Espionage On the American Orient Express
• 2010/01/05 -- Obama’s Got Your Climate Change Hanging

About the Author

Phil Butler is editor-in-chief of Everything PR and senior partner at Pamil Visions PR. He’s a widely cited authority on beta startups, search engines and public relations issues, and he has covered tech news since 2004. Phil wrote in the past for ReadWriteWeb, Mashable, Profy, SitePoint, Search Engine Journal, AltSearchEngines. Follow Phil on Twitter or send him an email at phil [at] pamil-visions [dot] com.

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