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Luke Rudkowski of WeAreChange asks Tom Brokaw what he thinks the state of journalism is in today and who he thinks runs the world.
Tag Archives | Banking
Discover Ordered To Repay $200 Million It Stole From Cardholders
Kudos to Obama’s newly formed Consumer Financial Protection Bureau for cracking down on this. In short, Discover’s telemarketers offered customers unnecessary “add-on services” which were implied to be free, and then charged customers’ accounts for said services. In July, Capital One was forced to pay $210 million over the same practice. The Los Angeles Times reports:
More than 3.5 million Discover credit card customers will share $200 million in refunds in the wake of a federal investigation that determined the bank tricked people into signing up for payment protection plans and other add-on services. Regulators said scripts for Discover’s telemarketers “contained misleading language likely to deceive consumers about whether they were actually purchasing a product.”
Consumer advocates said the enforcement actions show that the new consumer bureau is on the job. “Banks have been doing this for years, but we never had a regulator who protected consumers before,” said Ed Mierzwinski, director of the consumer program for the U.S.
Iran Sentences Banker Criminals To Death Penalty
Perhaps this is one instance in which we could learn something from Ahmadinejad and company? Via the BBC:
Four people have been sentenced to death for their roles in Iran’s biggest-ever bank fraud scandal. Two other defendants received life sentences, while 33 more will spend up to 25 years in jail, the chief prosecutor was quoted as saying. The scandal involved forged documents reportedly used by an investment company to secure loans worth $2.6bn.
The case broke in September 2011 when an investment firm was accused of forging documents to obtain credit from at least seven Iranian banks over a four-year period. The money was reportedly used to buy state-owned companies under the government’s privatisation scheme.
As part of their probe, authorities froze the assets of an Iranian businessman thought to be the mastermind behind the scam. The BBC’s Sebastian Usher said the firm at the heart of the scandal had moved from a small start-up capital to being worth billions of dollars.
Bankers Gone Wild
Adam Smith (CC)
The erudite James Surowiecki brings his journalistic skills to the problem of a banking system that has subsumed the its own watchdogs, in The New Yorker:
In order to work well, markets need a basic level of trust. As Alan Greenspan said, in 1999, “In virtually all transactions we rely on the word of those with whom we do business.” So what happens to a market in which the most fundamental assumptions turn out to be lies? That is the question in a scandal that has roiled the banking industry all summer. The LIBOR (London Inter-bank Offered Rate) index is the most important set of numbers in the global financial system. Used as a benchmark for interest rates around the world, it’s assembled by asking a panel of big banks to estimate what it would cost them to borrow money today, if they had to. Hundreds of trillions of dollars in derivatives, corporate loans, and mortgages are pegged to these rates.
Iceland Jails Bankers, Erases Citizens’ Debt, Recovers Strongly
Seriously, the most advanced place on Earth. Bloomberg writes:
Icelanders who pelted parliament with rocks in 2009 demanding their leaders and bankers answer for the country’s economic and financial collapse are reaping the benefits of their anger.
Since the end of 2008, the island’s banks have forgiven loans equivalent to 13 percent of gross domestic product, easing the debt burdens of more than a quarter of the population.
The island’s steps to resurrect itself since 2008, when its banks defaulted on $85 billion, are proving effective. Iceland’s economy will this year outgrow the euro area and the developed world on average, the Organization for Economic Cooperation and Development estimates.
Iceland’s approach to dealing with the meltdown has put the needs of its population ahead of the markets at every turn. Once it became clear back in October 2008 that the island’s banks were beyond saving, the government stepped in, ring-fenced the domestic accounts, and left international creditors in the lurch.
Many Wall Street Executives Say Wrongdoing Is Necessary
Capitalism-hating radicals claim that our financial sector is awash with unethical and illegal behavior, which is not merely tolerated, but encouraged or even required for success. Many Wall Street leaders concur completely. Via Yahoo! News:
A quarter of Wall Street executives see wrongdoing as a key to success, according to a survey by whistleblower law firm Labaton Sucharow released on Tuesday. In a survey of 500 senior executives in the United States and the UK, 26 percent of respondents said they had observed or had firsthand knowledge of wrongdoing in the workplace, while 24 percent said they believed financial services professionals may need to engage in unethical or illegal conduct to be successful.
Sixteen percent of respondents said they would commit insider trading if they could get away with it, according to Labaton Sucharow. And 30 percent said their compensation plans created pressure to compromise ethical standards or violate the law.
The Shady Past of the Vatican Bank
As scandal surrounding the Vatican Bank grows and grows, Der Spiegel looks back at the its recent history of extreme sketchiness:
Whereas Benedict XVI and his predecessors have preached humility and ethical financial dealings from the window overlooking St. Peter’s Square, his confidants working directly beneath the papal windows have continued to pursue shady financial transactions.
The Vatican has yet to divulge the business practices its bank has been using for decades. “There is fear that, owing to the transparency necessary today, one will find something in the past that one doesn’t want to,” says Marco Politi, a Rome-based Vatican expert.
Such things could include a complex system of ghost accounts and shell companies like the bank had when Archbishop Paul Casimir Marcinkus was its head in the 1980s. At the time, the bank did business involving foreign currency and weapons with the Milanese banker Robert Calvi and the mafia financier Michele Sidona — and helped launder illegal proceeds the mafia earned from drug-trafficking as well as bribes paid to Christian-conservative Italian politicians.
Karl Marx-Themed Mastercards Are A Hit In Germany
The ultimate indignity for the great critiquer of capitalism? Or a subtle expression of mass dissatisfaction with the current financial paradigm? Via Reuters:
Two decades after the fall of the Berlin Wall, some eastern Germans are once again carrying round images of Karl Marx – if only in their pockets. More than a third of customers at Sparkasse bank in Chemnitz opted for the picture of a bronze bust of the bearded 19th century German-born philosopher, bank spokesman Roger Wirtz said. Marx’s stern face is depicted gazing towards the logo of Mastercard.
The east has witnessed a wave of nostalgia in recent years for aspects of the old East Germany, or DDR, where citizens had few freedoms but were guaranteed jobs and social welfare. The trend is not limited to the region. A 2008 survey found 52 percent of eastern Germans believed the free market economy was “unsuitable” and 43 percent said they wanted socialism back.
More Icelandic Bankers Arrested
Via Icenews.is
Iceland’s special prosecutor into the banking crisis has confirmed that raids have taken place today and that arrests have been made. The Central Bank of Iceland is among the institutions under investigation.
Special Prosecutor, Olafur Thor Hauksson told Visir.is that house searches are taking place in at least three places today as part of investigations into the central bank, MP Bank and Straumur Bank.
Stefan Johann Stefansson at the central bank confirmed that agents were in the building conducting searches; and it has also been confirmed that searches are underway at MP Bank and ALMC (formerly Straumur).
An ALMC spokesman said that the premises are indeed being searched and that the bank’s staff members are doing their best to help.
In other news, four people have so far been arrested today in connection with the special prosecutor’s investigation into Landsbanki…
[continues at Icenews.is]… Read the rest
Bank Of America Now Suing Itself In Foreclosure Cases
In the latest phase of the foreclosure crisis, our nation’s biggest banks have reached a Zen-like state in which they resemble snakes eating their own tails, reports Forbes:
Here’s a sign of just how big and messy the foreclosure problem is: Bank of America has sued itself at least nine times in April.
That’s what lawyer and fraud expert Lynn Szymoniak discovered recently during a search for foreclosure filings in Palm Beach county Florida.”There are likely at least 100 examples of the same thing happening across the state,” Szymoniak says. “The company is literally seeking damages from itself in order to foreclose on the condo owner.”
“We are servicing the first mortgage on behalf of an investor and we own the second mortgage,” said Bank of America spokeswoman Jumana Bauwens [in regards to one case].
