Despite all the scandals that have plagued Wall Street in recent years, those in charge are still raking in big paychecks. A perfect example is the CEO of Jefferies (JEF), Richard Handler, who got $19 million last year, and is set to receive $39 million in stock awards over the next three years.
Handler has been the CEO of Jefferies since 2000, during which time we have seen some major ups and down in the stock, and the broader market. During the twelve-month period leading up to November 1, Jefferies stock jump gained about 2%. The stock is up since then on its plans to be acquired by Leucadia National Corp. (LUK). Handler will be CEO of both companies following the merger.
With so much public outrage about the way Wall Street does business, reports that a former Jefferies employee, Jesse Litvak, the one time managing director of Jefferies' Connecticut offices has been charged with defrauding clients, including the U.S. government, probably isn't that suprising.
Litvak was arrested Monday, and pleaded not guilty to the 16 charges of securities fraud brought against him. It is alleged that between 2009 and 2011 Litvak defrauded six different investments funds, which were established by the Treasury Department to buy up troubled mortgage-backed securities. These are the same securities that helped lead to the economic collapse, and the fact that Jefferies would defraud investment funds that were set up to help boost the economy is disgusting.
Richard Handler was in charge of the company while Litvak was working there, and in the runup to the financial crisis.. Today's news is yet another example of how responsibility is not moving up the ladder to the leadership of the companies responsible for the collapse. At what point will we start seeing those in charge sharing some of the legal responsibility of these actions instead of just getting big bonuses?
Another Wall Street CEO with a big paycheck is Jamie Dimon of JP Morgan (JPM). The company puts the responsibility of its biggest trading losses ever squarely on the shoulders of Dimon, and as a result decided to cut his 2012 pay. Despite having "ultimate responsibility" for JP Morgan's biggest trading loss ever, Dimon still managed to pull in $11.5 million for 2012. If the company does truly give Dimon "ultimate responsibility" as it claims, how can it also justify a $11.5 million pay day?
With everyday Americans still struggling to crawl their way out of the hole that the nations biggest investment companies helped create, those on top are still living the high life.
Michael Fowlkes is a financial writer who has been with the Fresh Brewed Media family since 2004. Over the course of his tenure with Fresh Brewed Media, he has worn many hats, including portfolio manager, options analyst, and writer. Michael received his undergraduate degree from Virginia Tech in Accounting and got his start in finance working as a stock trader for six years at Chase Investment Counsel in Charlottesville, Va. His articles typically cover big-picture events and forecasting what impact they will have on the stock market. In addition to writing for Fresh Brewed Media, Michael also wrote for AOL's BloggingStocks for three years, focusing most of his attention on the energy and technology sectors. Follow him on Twitter at @MFatMICenter.