It’s tough to see how the banks’ reputation can get much worse — which suggests this Wikithreat is probably illusory.
Julian Assange (right), Internet document leaker and publicity seeker extraordinaire, told Forbes in an interview published this week that he plans on releasing unauthorized documents about an unnamed big U.S. Bank early next year.
Given the hubbub Assange has provoked with his previous releases on the U.S. Military and diplomatic corps, this seems to have the makings of a big story.
But consider that the main effect of the previous WikiLeaks episodes was to expose official hypocrisy. When you consider what bad actors the banks have already shown themselves to be, it is sort of hard to imagine what damage Assange might actually expect to do.
“What else can you possibly do to embarrass these guys?” Asks FusionIQ’s Barry Ritholtz, who spent much of the last few months chronicling how the banks have defrauded homeowners and investors in mortgage securities. “The bar is so high. We may find out some stuff about their lobbying before the bailouts, but that doesn’t look bad for them as much as for the government.”
Then there’s the question of which banks, if any, should be worried about this supposed bombshell. When Assange’s comments started making the rounds of the Internet last night, conspiracy theorists immediately concluded that the target would be everyone’s favorite doer of God’s work, Goldman Sachs (GS).
But Peter Cohan, who teaches business at Babson College and writes books about investing, questions that conclusion, citing the cohesive culture at Goldman.
“That’s an interesting question, who within one of these banks is going to leak this stuff,” said Cohan. “My gut reaction is it wouldn’t be Goldman, as much as I might like it to be.”
This isn’t to say Goldman necessarily has smooth sailing ahead. The firm notes in its most recent quarterly filing with regulators that it is subject to investigations on subjects such as its dealings with AIG in the financial crisis and its research practices. New fodder there could keep the mill grinding for some time.
But Cohan said he thinks a more likely target is Bank of America (BAC), which is considered far less cohesive and well managed. Adding to possible leak outlets, in recent years BofA rolled up controversial acquisitions of deeply troubled mortgage lender Countrywide and broker-dealer Merrill Lynch.
A comment Assange made in an interview last year with ComputerWorld says WikiLeaks has access to some BofA data, Business Insider notes, though whether the data are actually in any way incriminating is obviously another question.
At the moment, for example, we are sitting on 5GB from Bank of America, one of the executive’s hard drives. Now how do we present that? It’s a difficult problem. We could just dump it all into one giant Zip file, but we know for a fact that has limited impact. To have impact, it needs to be easy for people to dive in and search it and get something out of it.
Bank of America, which fans note already trades below book value, was off 1% at midday Tuesday. Another ill-managed, dysfunctional behemoth that is being mentioned in WikiLeaks chatter, Citigroup (C), was actually up 1% Tuesday.