Vanity Fair's Bill Cohan catches us up on the architects of the financial collapse of 2008. Turns out the people in the banking industry that wrecked our economy to the tune of trillions ended up A-OK. 81-year-old Jimmy Cayne, former Bear Stearns CEO, doesn't want to talk about it much. Neither do his friends.
Cayne is not alone among former Wall Street executives in preferring not to revisit the events of 2008. Stan O’Neal, the former chairman and C.E.O. of Merrill Lynch & Co., contacted through a friend, doesn’t want to talk about that time, either. In the years leading up to the crisis—he resigned under fire in October 2007—O’Neal was the person, many people at Merrill believe, chiefly responsible for ratcheting up the firm’s risktaking, allowing its balance sheet to get larded with squirrelly debt securities, just as savvier firms such as Goldman Sachs and JPMorgan Chase were aggressively de-risking their balance sheets. He is said to feel “bitter” about the way he was treated by the press before and after Merrill’s collapse. But he isn’t nursing his wounds on the breadline.
O’Neal left Merrill with a severance package of around $161.5 million, on top of his 2006 pay of $91.4 million. It is not exactly clear what he does these days, other than serve on the board of directors of Alcoa. He doesn’t much keep in touch with his old friends, and he has moved from his Park Avenue apartment to the Upper West Side of Manhattan. “He seems to have retreated from the world,” a friend says.
John Thain, a former partner at Goldman Sachs and onetime C.E.O. of the New York Stock Exchange, got a $15 million signing bonus to replace O’Neal as the C.E.O. of Merrill in January 2008. Thain then steered Merrill to its inevitable demise, in September 2008, when Bank of America bought it for $50 billion in stock, thanks to a major financial assist from the federal government. Thain, too, declined to be interviewed for this piece. Since February 2010, he has been the chairman and C.E.O. of CIT Group, a middle-market lender. His total compensation from CIT in 2013 was $8.25 million and his approximately 350,000 shares of CIT stock are worth around $16 million.
But Thain was already rich. As a pre-I.P.O. partner of Goldman Sachs and a co-chief operating officer of the firm, he received a windfall of more than $500 million when Goldman went public, in May 1999. He still lives at 740 Park Avenue, home to Ronald Lauder and Stephen Schwarzman, among others, in an apartment he bought for $27.5 million from the philanthropist Enid Haupt, in 2006. He also still owns a 14-bedroom mansion, on more than 10 acres, in Westchester, with two swimming pools and a tennis court.
The man who bought Merrill Lynch for $50 billion right before it would have tumbled into bankruptcy, Ken Lewis, the former C.E.O. of Bank of America, is also keeping mum these days. “Thanks for the opportunity but I have no desire to go back to that time,” Lewis wrote me. In March 2014, Lewis agreed to a three-year ban from serving as an officer of a public company and to pay a $10 million fine as part of a settlement with Eric Schneiderman, the New York State attorney general, dealing with claims that he and other Bank of America executives misrepresented to shareholders the impact the Merrill acquisition would have on Bank of America’s earnings. In bringing the lawsuit against Lewis, Andrew Cuomo, Schneiderman’s predecessor (and now New York’s governor), alleged that Lewis knew that Merrill’s earnings would be far less than originally expected, in part because of large bonuses that the brokerage had paid out to its bankers, traders, and executives and in part because of the ongoing write-downs of its risky mortgage-related assets. As part of the settlement with Schneiderman, Bank of America agreed to pay $15 million and to cover Lewis’s $10 million fine, too.
When Lewis left Bank of America, at the end of 2009, he was entitled to as much as $83 million, in a combination of pension and insurance benefits, as well as stock and other compensation. He now, reportedly, lives in a 10,000-square-foot, $4.1 million condominium in Naples, Florida, overlooking the Gulf of Mexico.
So these guys are pretty much doing alright. Certainly far better than 99.9999% of America since 2008. They're not in jail or anything, nor will they ever be. And if there's one major failing of the last 7 years, it's that we didn't demand tumbrels and guillotines for these bastards of the universe.
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