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NEW YORK (TheStreet) -- Let's start by stating some invariable, carved-in-concrete, never-to-be-changed-over-their-dead-body laws pertaining to Wall Street bonuses. You have to keep these in mind whenever you see an official pronouncement from a financial-services executive on the subject of compensation.

The first is that that bonuses for the most desired (or powerful) personnel are always to be as high as possible. The second is that the bonus system is inviolate. The third is that if the public (and showboating members of Congress) don't like it, they can take a flying (obscenity deleted). The fourth is that Wall Street will never admit to Bonus Laws one through three.

These principles must be kept in mind in evaluating the latest sounds to emerge from Wall Street's giant spin machine, in this case the annual meeting of the Securities Industry and Financial Markets Association. The CEO of

Morgan Stanley


, James Gorman, received attention for some scandalous remarks before the SIFMA, in which he appeared to drive a stake through the heart of the entire Wall Street bonus cyclops.

The New York Times

Dealbook reported his speech under the headline "Cracks Emerge in Wall St.'s Unity."

"Mr. Gorman criticized rich bonuses -- which were often paid for deals that did not pan out -- and Wall Street's ego problem, which he said led to bad decisions," Dealbook reported.

Oh, no! Doesn't that violate the Bonus Law? Yes, it does. I'll be coming back to that.

The specifics of his speech were indeed startling, especially this: getting the Street back on track, he said, "would require more sensible bonuses, which would accomplish 'changing the perception that it is the individual that is the hero.' "

In gambling there is something known as a "tell," which is an inadvertent action taken by a gambler (tugging at an earlobe, using a certain phrase) which indicates that he or she is bluffing or holding a bad hand. Tells tend to be subtle, which is why I'm not entirely sure what we have here from Gorman is a "tell" as to his insincerity. We have to make up a different word for the malarkey that he is pulling here. Let's call it a "scream," as in "screamingly obvious."

I say that because Gorman is absolutely correct. Yes, if Wall Street firms want to turn themselves around, they've got to put less emphasis on the individual's personal financial interests. At the core of the financial crisis are individual bankers being treated like hedge fund managers, accountable to no one, being allowed to use their banks' money on reckless, leveraged bets. It's also been a story of CEOs behaving like Third World potentates.

Probably the best example of that is John Thain when he was CEO of Merrill Lynch before the

Bank of America


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takeover. Thain was portrayed by the media as a simple

farm boy from Illinois

, while all the while he was spending $1.2 million to renovate his office, including $87,000 on a rug and $35,000 for a "

commode with legs

." Instead of getting all that nice stuff, Thain found himself ousted from Merrill entirely, and now is wreaking his old-fashioned Midwestern charm on the

CIT Group



What put Thain's reputation in the "commode with legs" was that he was, indeed, out for himself, putting his own selfish interests above that of his company. Lots of Wall Streeters are devotees of Ayn Rand, whose concept of morality is centered around "rational self-interest." That's a somewhat elastic term, but it's fair to assume that it doesn't include that kind of self-destructive, shareholder-financed spending spree.

Still, I have to admit that Gorman flouted the Street's philosophical embrace of individual initiative pretty clearly in his speech before SIFMA. He broke the Law by doing that, and by saying that some people "who in many cases were frankly pretty average"

made 10 times as much

as people in nonfinancial industries.

"As an industry," he said, again flouting the Randian principles that have propelled Wall Street, "we can have larger-than-life personalities, but individuals don't make institutions." Take that, Howard Roark. A Wall Street Journal blogger immediately shot back with a


pointing out how actually individual achievers are really the foundation of Wall Street, etc. etc.

Yet against all this mammoth public breast-beating we have my inviolate, never-changing Bonus Law. It is a permanent law. It can never be revoked. How do you reconcile it with Gorman's pronouncements? You don't, because you don't have to.

From the lowest cold-callers at shady regional brokerages to the most vaunted denizen of talcum-scented executive rest rooms, the financial-services industry is built on one thing: money. People are paid more by investment banks than by, say, microbreweries because Wall Street is where the money is, and its employees are motivated not by creativity, or spiritual awakening, or serving the public, but by the pursuit of money. Nothing else. I recall interviewing one famous financier for one of my past employers, and his life story was one cash-motivated move after another. One job taken because of its financial prospects over another. Again and again over decades. And today -- well, he's got a lot of money, that's what, as well he should. He is a cold-blooded S.O.B., but that's neither here nor there.

As for the proximate cause of Gorman's bloviating, the answer is easy to find. Just go to

Morgan Stanley's latest 10-Q

, and turn to "Legal Proceedings," which describe how Morgan Stanley, like every other major bank, is up to its eyeballs in detritus from the financial crisis. Then turn to the latest 10-K, and the section headed "

Supervision and Regulation

." Specifically: "It is likely that the year 2010 and subsequent years will see material changes in the way that major financial institutions are regulated both in the U.S. and worldwide. ... Such measures could include taxation of financial transactions, liabilities and employee compensation as well as reforms of the OTC derivatives markets, such as mandated exchange trading and clearing, position limits, margin, capital and registration requirements ...

and breaking up firms that are considered 'too big to fail.' " Get the picture? Even with the Republicans resurgent, the banks are running scared.

Sure, Morgan's bankers may have to temporarily suffer while their CEO bloviates. But not to worry. It's tough sledding today. But as Scarlett O'Hara once said, tomorrow is another day. Make no mistake about it: When the public furor settles down, the Bonus Law will prevail.


In this space a couple weeks ago, I described how companies

bury bad news

in corporate "risk factor" sections, and I highlighted


for burying news of a California investigation into its pricing practices. Well, it's

buried no more


Gary Weiss has covered Wall Street wrongdoing for almost a quarter century. His coverage of stock fraud at BusinessWeek won many awards, and included a cover story, �The Mob on Wall Street,� which exposed mob infiltration of brokerages. He uncovered the Salomon Brothers bond-trading scandal, and wrote extensively on the dangers posed by hedge funds, Internet fraud and out-of-control leverage. He was a contributing editor at Conde Nast Porfolio, writing about the people most intimately involved in the financial crisis, from Timothy Geithner to Bernard Madoff. His book "Born to Steal" (Warner Books: 2003), described the Mafia's takeover of brokerage houses in the 1990s. "Wall Street Versus America" (Portfolio: 2006) was an account of investor rip-offs. He blogs at