Americans were angry when Wall Street’s greedy and risky behavior triggered a global financial crisis in 2008. They were angrier still when the government had to borrow and spend hundreds of billions of dollars to rescue mortgage giants Fannie Mae and Freddie Mac, the largest banks and the insurance company AIG. They were outraged when they found out that executives at those enterprises were continuing to receive big salaries and bonuses.
So just imagine how it outrageous it would be if some Wall Street sharpies went to court to argue that they didn’t benefit enough from the bailouts and that taxpayers should pay them tens of billions of dollars more.
In fact, they did. And, according to legal observers, they just might prevail.
In two separate cases, the government now stands accused of overstepping its authority when it took extraordinary measures to prevent a financial meltdown in the fall of 2008. The Wall Street figures who are suing say their property was seized without compensation, in violation of the Constitution. One case was brought by Maurice “Hank” Greenberg, the legendary former chief executive of AIG who built it into the world’s largest insurer. Filing the other case is a group of hedge funds that bought Fannie and Freddie stock for pennies per share after the companies were put in government conservatorship.
Greenberg is asking the court to award him and other AIG shareholders at least $23 billion from the Treasury. He says that’s to compensate them for the 80 percent of AIG stock that the Federal Reserve demanded as a condition for its bailout. Judge Thomas Wheeler has repeatedly signaled his agreement with Greenberg. A decision is expected any day.
The hedge funds are asking for the return of as much as $100 billion in profits and an end to the Treasury-imposed profit sweep. In her comments, Sweeney has shown sympathy with their argument that the government can’t hold them indefinitely in a legal limbo in which they have no claims to assets of the company they ostensibly own.
When these cases were filed, many legal observers thought they were a long shot, even frivolous. But from their procedural rulings and comments from the bench, said David Zaring, a professor of legal studies at the Wharton School of Business, both judges have indicated they are at least open to the plaintiffs’ legal theories and willing to hold the government accountable for what it did during the financial crisis.
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We bailed you out, and now you want what!?! - The Washington Post
So just imagine how it outrageous it would be if some Wall Street sharpies went to court to argue that they didn’t benefit enough from the bailouts and that taxpayers should pay them tens of billions of dollars more.
In fact, they did. And, according to legal observers, they just might prevail.
In two separate cases, the government now stands accused of overstepping its authority when it took extraordinary measures to prevent a financial meltdown in the fall of 2008. The Wall Street figures who are suing say their property was seized without compensation, in violation of the Constitution. One case was brought by Maurice “Hank” Greenberg, the legendary former chief executive of AIG who built it into the world’s largest insurer. Filing the other case is a group of hedge funds that bought Fannie and Freddie stock for pennies per share after the companies were put in government conservatorship.
Greenberg is asking the court to award him and other AIG shareholders at least $23 billion from the Treasury. He says that’s to compensate them for the 80 percent of AIG stock that the Federal Reserve demanded as a condition for its bailout. Judge Thomas Wheeler has repeatedly signaled his agreement with Greenberg. A decision is expected any day.
The hedge funds are asking for the return of as much as $100 billion in profits and an end to the Treasury-imposed profit sweep. In her comments, Sweeney has shown sympathy with their argument that the government can’t hold them indefinitely in a legal limbo in which they have no claims to assets of the company they ostensibly own.
When these cases were filed, many legal observers thought they were a long shot, even frivolous. But from their procedural rulings and comments from the bench, said David Zaring, a professor of legal studies at the Wharton School of Business, both judges have indicated they are at least open to the plaintiffs’ legal theories and willing to hold the government accountable for what it did during the financial crisis.
more
We bailed you out, and now you want what!?! - The Washington Post
