Apologies to the Bard in writing a captivating headline to this post. Some starting points to explore possible ways to recoup monies paid to bankers who may not have earned them.
There are many ways to attempt to recoup nonexistent if not ill-gotten "gains" that were foolishly paid to Wall Street financiers and bankers by their employers as so-called "bonuses". I have not found much mention of these possible recoupment actions in the press. Some of them do not appear to have been mentioned previously at all.
1. Equity makes many possibilities available. Recoupment and restitution, money had and received, and money paid under a mistake of fact, are all remedies that come immediately to mind.
2. Statutes should be consulted by those who wish to invoke them in trying to get the money back from the bankers who arguably should never have been paid the money. The laws of New York may apply to many of the "bonus" payments shamelessly made to banker-employees. In addition, the laws of other States may and should be consulted where payment and employment activities touched their turf as well.
3. It is not strictly a recoupment of monies already paid, but certainly it will be easier to recoup monies paid in the future under these circumstances when employees and employers agree to it. For example, serious consideration should be given to conditioning further payments to these employers who continue to ask for Federal Taxpayer money, by the empoyers executing enforceable agreements that they will obey clearly stated limits on payments to employees (whether "bonuses" or "compensation").
4. Shareholder suits are worth exploring, not in this sense against the corporations themselves, i.e., against directors or officers of the corporation, but instead in the name of the corporation whenever the directors and officers will not act to recover monies foolishly paid and sometimes called "bonuses" to the bank employees who received them.
5. Finally, ask everyone who received the bonuses and other allegedly undeserved payments for the money back. The law refers to this as a "demand". If a demand is required, a formal demand is not hard to write. The asking is virtually free to the ones doing the asking. They have nothing to lose, not anymore. (I recall that the Insurance Commissioner of the State of New York asked AIG, I believe, to ask for money back from certain fired executives, as a condition he imposed, or wanted to impose, during his investigation into the question of its possible wrongdoing. I lost track of that and do not know if AIG ever asked the executives for the money back, or if it did, what the upshot of it was.) Where pursuing recoupment and restitution at law or in equity or by statute requires a demand first, then that condition is satisified by the asking or demanding, as the case may be. The former masters of the universe may well agree to repay at least a part of what they received.
It is all worth exploring.
For the contrary view that nothing can be done, see the views attributed to two "compensation experts" quoted in Eric Dash and Vikas Bajaj, "Few Ways to Recover Bonuses to Bankers" p. B1, col. 6 (New York Times Nat'l Ed., "Business Day" Section, Friday, January 30, 2009). The reporters who collaborated on this article, Eric Dash and Vikas Bajaj, are two of the best in reporting financial news, Their linked article is based on views of what are called "compensation experts," but only two persons are quoted. Both are lawyers who appear to be familiar with the employers and employees who participate in the financial banking compensation scheme. Rather than taking these two particular views alone as answering the question, it would be wise to perhaps explore the alternatives instead, accompanied by those whose focus is not so much on how well the participants are protected but focused rather on getting the money back.
Whatever alternatives may be explored, the payors and the payees of what has been described as bonuses for performance, paid to employees of failed banks and financial institutions now supported only by Federal Taxpayer Funds, would be well advised to explore their own Insurance Policy Coverages and comply with any Conditions that a Judge or Jury might potentially be convinced in the future should have been complied with under their Policies.
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