Some simple (yet radical) rethinking of Wall Street compensation could fix this. Create new math that awards bonuses based upon a combination of how much money the firm makes as well as how well the firm's customers have done. This would probably require the pro-ration of bonuses which would then accumulate over a period of two or three years.
The old conventional wisdom is that good people have to be well compensated or they will leave, but perhaps they won't walk so fast if their bonus is in part stretched out over the length of an employment contract.
While we're talking about changing the paradigm, how about requiring the investment banks that create exotics and derivatives to participate in the huge risks associated with them, and if and when they fail, penalizing them economically?
[Article: Tea Time for the Occupation]
It's time the Street imposed some discipline on its own. By requiring firms to keep a meaningful piece of the risk that they package and sell to investors, the creation of new financial exotics and derivatives would magically be transformed in the public eye from "exotic swindles" to the evolved forms of investment for institutions that they were meant to be.
Wall Street is a place of complex rules—rules that involve the creation of new products, rules that regulate financial activity, and rules that determine both the size of a bonus, and to whom it goes. Maybe the suggestions above would make those rules even more complex (maybe not), but they surely will make them more fair.
Perhaps we should all be reminded of something once said by Senator Jefferson C. Smith: "I wouldn't give you two cents for all your fancy rules if, behind them, they didn't have a little bit of plain, ordinary, everyday kindness and a little looking out for the other fella, too."
Adam Levin is Chairman and cofounder of Credit.com and Identity Theft 911. His experience as former director of the New Jersey Division of Consumer Affairs gives him unique insight into consumer privacy, legislation and financial advocacy. He is a nationally recognized expert on identity theft and credit.