It sounds like a plan

In an article appearing on the Huffington Post (a link appears on Naked Capitalism), William K. Black, Thomas Ferguson, Robert Johnson and Walker Todd offer a practical solution to the AIG bonus outrage. Their plan:

  1. "…[T]he US trustees in charge of the firm [AIG] must immediately instruct the corporate treasurer to make no payments of any bonuses. They also need to order him to issue stop payment orders on any checks that fly out the door at the last minute, as with Merrill Lynch."
  2. "…[T]he trustees need to split off the derivatives unit from the rest of the firm and separately incorporate it. This step leaves AIG's other businesses free to operate as usual. If the recipients of the bonuses refuse to waive them, then the derivatives unit should at once be thrown into bankruptcy, terminating all obligations to pay them."
  3. "AIG CEO Edward Liddy, accordingly, should be asked to resign at once, for the sake of public confidence and to send a clear signal that gaming the system is unacceptable."
  4. Investigate "…the validity of AIG's past accounting and securities disclosures and its executive compensation program…." "…[T]he Office of Thrift Supervision, the Securities and Exchange Commission, and the FBI" can perform this investigation.

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