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Banking Fraud

Banking fraud seems to be no big deal. It truly bothers me that fraud is only prosecuted in this country if you’re unable to hire high-priced lawyers. As a matter fact, as we learned from the O.J. Simpson trial, you can get away with murder if you can hire enough lawyers to confound and confuse the jury. (“If the glove don’t fit, you must acquit.”) Now, it appears that the London-based financial giant Barclays has been manipulating the LIBOR interest rates. At the very least, this criminal activity has probably cost investors millions, if not billions, of dollars. At most, Barclays has caused the American people, you and me, to pay higher interest rates for credit cards, car loans and home mortgages. Who has gone to jail for these crimes? No one. The CEO has resigned, but with golden parachutes. How is this a bad thing for Mr. Robert Diamond? Why aren’t the House and Senate investigating this?

The Housing market crash of 2007/2008 was the result of fraud; huge, wide-spread fraud. Yet, almost no one went to jail. Mortgage originators committed fraud by falsifying documents. These mortgages were then sliced and diced into mortgage securities, which were sold to investors as safe investment tools. This was a lie. This was fraud. Rating agencies used fancy math to justify giving AAA ratings to crappy mortgages. This was also fraud. Hundreds, if not thousands, of people participated in what turned out to be the world’s largest Ponzi scheme. All of the large investment houses (including Lehman Brothers, Merrill Lynch and Bear Stearns) played a part in this systemic fraud. Why CEOs and CFOs of many of these major banking behemoths didn’t go to jail is beyond me.

From Baseline Scenario:

The Commodity Futures Trading Commission nailed the detailed mechanics of this deception in plain English in its “Order Instituting Proceedings” (which is also a settlement and series of admissions by Barclays). Most of the compelling quotes from traders involved this scandal come from the Order, but too few commentators seem to have read the full document. Please look at it now, if you have not done so already. (more…)

By |2012-07-19T00:12:25-04:00July 18th, 2012|Economy|3 Comments

We Need Real Regulation

I don’t know. There’s a variety of clichés that seem to be apropos – those who do not learn from history are forced to repeat it. It is déjà vu all over again. There are probably a few more that I can’t think of off the top of my head. We did this oil speculation thang just two years ago. It’s almost exactly two years ago. Oil prices rose for no apparent reason pushing prices at the gas pump over four dollars per gallon. We were in the middle of a presidential election. Neither presidential candidate had a good explanation. In hindsight, it was nothing but speculation. Wall Street simply bid up the price of oil, which cost us millions of not billions of dollars. Now, we have unrest in the Middle East but there’s no problem in the oil supply. None. So why is the price of oil/gas going up on a daily basis? The only logical answer is that oil speculators think there “might” be a problem in oil supply sometime in the near future. Because they are nervous, we need to pay more?!?!? Does this make any sense to you?

We need real regulation that protects middle class America from money-hungry Wall Streeters.

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From TP:

As the segment notes, during the last spike in gas prices in 2008, then-candidates Obama and McCain both assailed commodity speculators and called for increased regulation. The Dodd-Frank financial regulatory reform law gave the Commodity Futures Trading Commission the power to curb “excessive speculation” by limiting the bets speculators can make, and called on the commission to do so.

Unfortunately, opposition from the commission’s Republicans — and one Democrat, Michael Dunn — has so far prevented the CFTC from acting to regulate dangerous speculation on gasoline and other commodities. But Dunn’s term is ending this summer. The White House told the Ed Show it is “vetting” replacements — but would not say if they’re looking for a nominee that favors rules to curb excessive speculation.

Will the White House choose a candidate that wants to follow the law of Dodd-Frank, and insulate gas prices from predatory Wall Street speculators? It would certainly be a much more effective way of controlling gas prices than listening to conservative cries of “Drill, Baby, Drill.”

By |2011-03-09T07:40:58-04:00March 9th, 2011|Big Oil, Economy|Comments Off on We Need Real Regulation

Nine essential measures for transparency

Financial reform and transparency haven’t gone hand and hand. The Project on Government Oversight has a few recommendations:

  1. BRING FULL TRANSPARENCY TO THE CONFERENCE PROCEEDINGS:
    Make the conference proceedings fully transparent by broadcasting them on C-SPAN and webcasting them online.
  2. PROTECT FINANCIAL SERVICES INDUSTRY WHISTLEBLOWERS:
    Extend best-practices whistleblower protections to financial services industry employees.
  3. AUDIT THE FEDERAL RESERVE:
    Give the Government Accountability Office the authority to conduct an ongoing audit of the Federal Reserve, and require the Fed to make key information about its emergency lending programs available online.
  4. CREATE A STRONG AND INDEPENDENT CONSUMER FINANCIAL PROTECTION AGENCY:
    Create a truly independent, standalone Consumer Financial Protection Agency with full authority to issue rules and regulations to protect consumers.
  5. REWARD WHISTLEBLOWERS WHO MAKE DISCLOSURES TO THE SEC AND CFTC:
    Expand the whistleblower bounty program at the Securities and Exchange Commission and create an identical program at the Commodity Futures Trading Commission. Additionally, replace a secrecy provision and FOIA exemption with authentic whistleblower confidentiality protections.
  6. EXPAND SARBANES-OXLEY WHISTLEBLOWER PROTECTIONS:
    Extend Sarbanes-Oxley whistleblower protections to employees of subsidiaries and affiliates of publicly traded companies, and of nationally recognized statistical rating organizations.
  7. ADDRESS CONFLICTS OF INTEREST AT CREDIT RATING AGENCIES:
    Create a Credit Rating Agency Board to help address the basic conflict of interest arising from “ratings shopping.”
  8. STRENGTHEN THE INDEPENDENCE OF FINANCIAL AGENCY WATCHDOGS:
    Strengthen the independence of certain agency appointed Inspectors General (IGs), including the IGs at many financial regulatory agencies.
  9. ADDRESS CONFLICTS OF INTEREST AT FEDERAL RESERVE BANKS:
    Amend the election process for directors at Federal Reserve Banks in order to limit the influence of the financial services industry.
By |2010-06-09T17:02:39-04:00June 9th, 2010|Economy|Comments Off on Nine essential measures for transparency
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