Capital One Financial Corp. (COF), Bank of America Corp (BAC): Highway Robbery You Can Bank On

What about the LIBOR scandal, which also put big bankers in the hot seat? Charles Schwab Corp (NYSE:SCHW) sued 12 banks, including Bank of America Corp (NYSE:BAC), in San Francisco about a month ago for fraud related to LIBOR manipulation. Many investors may have forgotten, but obviously that problem isn’t relegated to the past.

Bank stocks have risen among the overall market rally, but investors with long-term memories should ask themselves whether things have really changed in the years following the financial crisis.

Don’t just take my word for it. Last year, Frank Partnoy and Jesse Eisinger took a look at the banking sector and wrote for The Atlantic: “Banks are bigger and more opaque than ever, and they continue to behave in many of the same ways they did before the crash.”

One thing you can bank on: They’re not looking out for you

An industry with a slew of overpaid CEOs is bad enough; such costs do impact shareholders’ bottom lines, particularly when other aspects of the business are suffering, or such compensation doesn’t reflect real operational performance.

In the big financial companies’ cases, though, there are even more reasons to shun these entities with outrageously compensated CEOs. It’s likely nothing has changed, and many of these individuals are still making bank despite inadequate controls on very real and very significant risk. In the end, many shareholders (and the public at large) may once again be left with nothing but chump change.

Check back at Fool.com for more of Alyce Lomax’s columns on environmental, social, and governance issues.

The article Highway Robbery You Can Bank On originally appeared on Fool.com and is written by Alyce Lomax.

Alyce Lomax has no position in any stocks mentioned. The Motley Fool recommends Goldman Sachs. The Motley Fool owns shares of Bank of America and JPMorgan Chase.

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