Tag Archives | Banksters
When the odds are stacked this heavily against whistleblowers, there’s not much incentive to rat out wrongdoers. Matt Taibbi looks at how even the courts are in on it, for Rolling Stone:
A great many people around the county were rightfully shocked and horrified by the recent excellent and hard-hitting PBS documentary, The Untouchables, which looked at the problem of high-ranking Wall Street crooks going unpunished in the wake of the financial crisis. The PBS piece certainly rattled some cages, particularly in Washington, in a way that few media efforts succeed in doing.
Now, two very interesting and upsetting footnotes to that groundbreaking documentary have emerged in the last weeks.
The first involves one of the people interviewed for the story, a former high-ranking executive from Countrywide financial who turned whistleblower named Michael Winston…
Well Newsweek may be dead, but its Daily Beast reincarnation is actually publishing some interesting articles, not least this one in which “Tom Wolfe draws up a sterling indictment of our unscrupulous financial culture. Twenty-five years after Bonfire of the Vanities, the author returns to Wall Street to see what happened to the Masters of the Universe”:
Come join us as we go back seven months to the apex of the history of American capitalism in the 21st century. We find ourselves in a swarm of fellow starstruck souls outside the Sheraton Hotel on Seventh Avenue in Manhattan, churning, squirming.
To slip past a battalion of cops and a platoon of security operatives in gray suits with small white techno-polyps in their ears attached to coils of white intercom cord trying to keep us under control… as we all but trample the raggedy, homeless-looking ranks of the television crews and every other laggard in our way.
Via CNN, in areas of the United States hit hardest by foreclosure, turning the tables on banks who turn deadbeat after repossessing homes:
Since the housing bubble burst in Florida five years ago, more than 400,000 borrowers have had their homes foreclosed on by their lenders. But for some, it’s payback time.
Hundreds of homeowners and condo associations are foreclosing on banks that have failed to pay dues and other expenses on the properties they’ve repossessed. When banks foreclose on a home they become responsible for paying fees to the homeowners association — both any unpaid fees going back as far as 12 months and all expenses going forward. In many cases, however, banks are failing to pay, leaving these associations short on cash, according to Miami-based attorney Ben Solomon. Now, homeowners groups are putting liens on the properties until banks pay up and foreclosing on them if they don’t.
You have frequently seen the mantra questioning their motives and conclusions as if the idea of people or officials acting together covertly to advance their interests in illegal ways is something new in history.
Until recently, US press outlets characterized conspiracy arguments as rants that lacked any factual basis, engaged in guilt by association and stretched the facts.
The only conspiracy charges they tended to look at uncritically were criminal complaints against the Mafia under anti-racketeering statutes like the RICO statutes. Prosecutors loved these cases because normal concerns with protecting the rights of defendants didn’t apply when hearsay evidence was permitted.
But now, four years after the financial crisis, prosecutors have finally discovered what critics have been alleging repeatedly: that big banks were crooks, engaging, engaging among other illicit practices, in secretive, illegal and conspiratorial schemes to rig baseline interest rates and manipulate credit markets,
It has now been admitted that traders at two major financial institutions were fixing LIBOR—the London Interbank Offered Rate, used to set the interest rates of $800 trillion worth of financial products, including credit cards and mortgages.… Read the rest
HSBC was fined of $1.9 billion this week for laundering billions of dollars for Colombian and Mexican drug cartels. It’s worth noting that for the world’s second largest bank, with trillions in assets, this is equivalent to a littering ticket. The New York Times writes:
It is a dark day for the rule of law. Federal and state authorities have chosen not to indict HSBC, the London-based bank, on charges of vast and prolonged money laundering, for fear that criminal prosecution would topple the bank and, in the process, endanger the financial system. They also have not charged any top HSBC banker in the case, though it boggles the mind that a bank could launder money as HSBC did without anyone in a position of authority making culpable decisions.
When prosecutors choose not to prosecute to the full extent of the law in a case as egregious as this, the law itself is diminished.
Via Ghost Exchange, excerpts from a fascinating PBS interview with former hedge fund analyst Cathy O’Neil on the culture within Wall Street:
The basic cultural assumptions were not pleasant to me. The sort of most basic cultural assumption was that as a smart person, we have the right to take advantage of the system and of “dumb people.” And that is sort of — I mean, I guess I should have known, going into a hedge fund, that’s what people think.
I was thinking of it naively, more like, “Oh, there’s a system, and we should see what inefficiencies there are in the system and add information.” I mean, I just sort of drank that Kool-Aid. But once I was inside, I realized that’s not really how people think about it. They think, “Well, of course we’re going to take advantage, because we’re smart, and we can. We have better tools, and our tools are our brains.” Take advantage of absolutely everything and everyone that we can, in any way we can.
Is the second-largest bank on the planet also one of the most far-reaching criminal organizations? The New York Times reports:
Federal and state authorities plan to announce a record $1.9 billion settlement with HSBC on Tuesday, a major victory in the government’s broad crackdown on money laundering at banks.
The settlement with HSBC stems from accusations that the British banking giant transferred billions of dollars on behalf of sanctioned nations like Iran and enabled Mexican drug cartels to launder money through the American financial system, according to officials briefed on the matter. Prosecutors found that the bank had facilitated money laundering by cartels and had moved tainted money for Saudi Arabian banks tied to terrorist organizations.
Since January 2009, the Justice and Treasury Departments and Manhattan prosecutors have charged six foreign banks, including Credit Suisse and Barclays. In June, ING Bank reached a $619 million settlement to resolve claims that it had transferred billions of dollars in the United States for Cuba and Iran.
The hottest new revenue flow trend in banking is simply stealing money from your customers. Via the Village Voice:
You wouldn’t know it by watching the news or reading the paper, but America’s banks are on the largest crime spree the country has ever known. Let’s go to the highlight reel, shall we?
In July, Wells Fargo paid a $175 million settlement after the feds caught its brokers systematically pushing minority customers into mortgages with higher rates and fees, even though they posed the same credit risks as whites. One study found that Wells Fargo charged Hispanics $2,000 more in what the Justice Department called a “racial surtax.” The bank docked blacks nearly $3,000 extra for their own improper pigmentation.
But despite a colossal civil rights fraud perpetrated against 30,000 customers, the settlement amounted to just .011 percent of the San Francisco bank’s annual income.
Across the country, in Minneapolis, U.S.
Will unregulated, debt-based financial products destroy the world? Bloomberg reports that the funneling of capital into instruments of so-called “shadow banking” continues to balloon to unimaginably large proportions:
The shadow banking industry has grown to about $67 trillion, leading global regulators to seek more oversight of financial transactions that fall outside traditional oversight. The Financial Stability Board, a global financial policy group comprised of regulators and central bankers, found that shadow banking grew by $41 trillion between 2002 and 2011.
The size of the shadow banking system, which includes the activities of money market funds, monoline insurers and off-balance sheet investment vehicles, “can create systemic risks” and “amplify market reactions when market liquidity is scarce,” the FSB said.
Supervisors consider shadow banking activities to be those that allow banks to carry out business off balance sheets, as well as those which allow investors to bypass lenders and the functions they traditionally fulfill on the markets.