"Federal regulators have increased the number of struggling banks they have effectively put on probation, forcing them to fix their problems and try to avoid potentially costly failures. ... These secret agreements can force banks to take steps including raising capital, cutting back on risky loans and suspending dividend payments. ... Because banks don't have to disclose the memorandums, bank customers and investors generally remain in the dark. ... The inconsistency of public disclosures 'is very frustrating as an investor in bank stocks,' said Gerard Cassidy, an analyst with RBC Capital Markets, noting that an enforcement action represents a red flag about a bank's health and is also likely to put the breaks on that company's growth. 'It would be very helpful in an investor's analysis if they knew that an agreement was already signed.' ... Speculation about these pacts is enough to drive a bank's stock price down", Damian Paletta & David Enrich at the WSJ, 26 August 2008.
Chris Cox (CC), where are you? Pasting your resume all over Wall Street for a nice seven-figure position with a hedge fund? Didn't you make it clear to all publicly-held bank holding companies that such agreements must be disclosed on Form 8-K? If not, why not? Further, that if the SEC finds such an agreement with a "confidentiality clause", you will immediately make a criminal referral to the DOJ of both the bank's management and the employees at the: Fed, FDIC or Comptroller of the Currency's Office which thought such secret agreements Kosher. You can start with National City Corp.'s management. See my 18 June and 24 August 2008 posts. We're watching. Imagine, the SEC portrays itself as the "investors' friend". What a joke. Paraphrasing Abe Lincoln's "Gettysburg Address", we now have a "government of the banks, by the banks and for the banks". What a country. Tell me CC, have you no shame?
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