May 27, 2011
Elizabeth Murphy
100 F Street, NE
Washington, DC 20549
Dear Murphy,
America paid a terrible economic price because of irresponsible risk-taking by Wall Street executives. Those executives took those risks because they knew that they could walk away with billions of dollars in bonuses and stock options and never pay for the long-term consequences of their actions. We need tough rules so that Wall Street pay packages don't encourage short-term risk taking.
Your rules should require at least a five year deferral period for executive bonuses at big banks, ban executive hedging of their pay packages, and require specific details from banks on precisely how they ensure that executives will share in the long-run risks created by their decisions. It should apply to the full range of important financial institutions, and draw in all the key executives at those companies.
Once this rule is passed, only you will know the details of its enforcement. But it's important for the public to know the progress you are making on this vital issue. You should report back to the public annually with a detailed report on progress in creating accountability for Wall Street pay.
Back in the 50's when J. Edgar Hoover was head of the FBI, there was a radio program about the FBI with the slogan, "CRIME DOESN'T PAY." Now we know that it really does pay, for THOSE on Wall Street and in the banking institution. No...it doesn't pay for the Willy Suttons of the world. But if you "to big to fail," and you have both the knowledge and experience, and you work in a "reputable institution," then the crime is a moral crime first of all, and a legal crime (maybe)...if you can get away with it.
But the biggest crime of all is that these institutions believe that they can steal from the public and get away with it. AND THAT HAS BEEN PROVEN...ONCE AGAIN.
Referencing Docket No.'s:
OTS: RIN 155-AC49
OCC: RIN 1557-AD39
Fed: RIN 7100-AD69
SEC: RIN 3235-AL06
FHFA: RIN 2590-AA42
FDIC: RIN 3064-AD56
Sincerely,
Mr. Charles Roth