Washington, D.C. – Dennis Kelleher, President and CEO of Better Markets, issued this statement on the Securities and Exchange Commission’s (SEC) claw back rule proposed today:
“The prospect of hundreds of billions of dollars in bonuses incentivized pervasive reckless, illegal and criminal conduct all across Wall Street in the years before the 2008 crash. For too many, getting the biggest annual bonus possible overwhelmed every other consideration. Wall Street’s dangerous and irresponsible conduct will not change until those irresistible incentives and the corrupt bonus culture are changed.
We applaud the SEC for finally proposing a rule to claw back the pay of executives who are richly rewarded even when their companies’ commit misconduct. However, making the claw backs contingent on a formal restatement of the financial results will almost certainly be ineffective. After all, not one Wall Street firm that caused the financial crisis, almost went bankrupt and required hundreds of billions in bailouts ever restated their financial results because of that behavior. Thus, the rule proposed today may be little more than public relations unless it is substantially strengthened before it is finalized, which Better Markets will be advocating for.”
Better Markets is an independent, nonprofit, nonpartisan organization that promotes the public interest in financial reform in the domestic and global capital and commodity markets. Better Markets advocates for transparency, oversight and accountability with the goal of a stronger, safer financial system that is less prone to crisis and failure thereby eliminating or minimizing the need for more taxpayer funded bailouts. To learn more, visit www.bettermarkets.com.