Interesting article on the banking crisis and the settlement - allegedly a complete coverup: http://www.rollingstone.com/politics/news/the-9-billion-witness-20141106
It does not make Eric Holder look very good, and it certainly seems to support the notion that the culture war is primarily fought to keep people's attention away from what's going on with big money.
Of course, any regulation of this particular industry would "hamper it". And thankfully so. Cleanse it with fire.
I've read enough Matt Taibbi in my life to be wary of reading more.
If someone will take on excepting some key points I'll look.
Quote from: The Minsky Moment on November 07, 2014, 02:26:31 PM
I've read enough Matt Taibbi in my life to be wary of reading more.
If someone will take on excepting some key points I'll look.
Tried to find some bits but it is a lot of innuendo mixed with allegations of coverup without any substance to back it up. Stopped reading about halfway through.
Quote from: The Minsky Moment on November 07, 2014, 02:26:31 PM
I've read enough Matt Taibbi in my life to be wary of reading more.
If someone will take on excepting some key points I'll look.
I took away two main points:
1) The lady he's interviewing worked at Chase in compliance and says she saw deliberate fraud, that she was told not to voice any concerns in writing; she also alleges that the DoJ was not interested in hearing from her beyond an initial conversation.
2) The penalties levelled against Chase are said to be a big number meaning little, in that most of it wasn't paid for by the bank, could be written off in taxes, and/or were money they were paying anyway in unrelated ways.
I don't know enough about these things to say how credible they are, which is why I brought it up here.
Oh, and I think they also so say that key senior people in the DoJ investigation and settlement have moved or are moving to senior positions in the companies they investigated.
Ok I read the first few lines and it looked like a dating profile.
I gather that it is about the JPM civil settlement. Which is the largest is US history.
What does Taibbi say got covered up and how much does he think the settlement should be?
Quote from: The Minsky Moment on November 07, 2014, 03:40:47 PM
Ok I read the first few lines and it looked like a dating profile.
I gather that it is about the JPM civil settlement. Which is the largest is US history.
What does Taibbi say got covered up and how much does he think the settlement should be?
His complaints seem to be:
-that the admission by JPM was so vague it allows JPM to continue to deny they did anything wrong
-that the settlement was never reviewed by a judge
-that despite it being a civil settlement, no one was ever criminally charged
-that the $9b is a purely paper number, reflecting in part "consumer relief", and allowing JPM to use the remainder as a tax write-off
Quote from: Barrister on November 07, 2014, 03:46:50 PM
-that despite it being a civil settlement, no one was ever criminally charged
Isn't that how it usually goes? :huh:
Quote from: Barrister on November 07, 2014, 03:46:50 PM
Quote from: The Minsky Moment on November 07, 2014, 03:40:47 PM
Ok I read the first few lines and it looked like a dating profile.
I gather that it is about the JPM civil settlement. Which is the largest is US history.
What does Taibbi say got covered up and how much does he think the settlement should be?
His complaints seem to be:
-that the admission by JPM was so vague it allows JPM to continue to deny they did anything wrong
-that the settlement was never reviewed by a judge
-that despite it being a civil settlement, no one was ever criminally charged
-that the $9b is a purely paper number, reflecting in part "consumer relief", and allowing JPM to use the remainder as a tax write-off
And that Fleischmann provides testimony that deliberate fraud/ theft occurred, but that she's never been called to testify.
Quote from: Admiral Yi on November 07, 2014, 03:48:16 PM
Quote from: Barrister on November 07, 2014, 03:46:50 PM
-that despite it being a civil settlement, no one was ever criminally charged
Isn't that how it usually goes? :huh:
The two are separate and apart. It's not unusual for someone I prosecute to also be the subject of a civil lawsuit. If that civil lawsuit settles it makes zero difference to by ongoing prosecution.
So ...
1) There was a statement of facts annexed as part of the settlement. It says JPM knew the securities were based mortgages that didn't conform to guidelines but knowingly marketed them as such. It also mentions that an internal employee wrote a memo saying the deal shouldn't be marketed; I assume that is the tall, thin attractive witness of the article.
2) The settlement was reviewed by a judge. And approved.
3) It was a civil investigation by investigators lacking prosecutorial power. The right to bring criminal charges was expressly reserved. AFAIK there is still a criminal investigation.
4). The $9 billion consists of cash payments made by electronic fund transfer. Its right in the settlement.
5).The witness wouldn't be called to testify if there is a settlement. Settlement means no trial, no testimony.
Quote from: The Minsky Moment on November 07, 2014, 04:07:38 PM
3) It was a civil investigation by investigators lacking prosecutorial power. The right to bring criminal charges was expressly reserved. AFAIK there is still a criminal investigation.
Have any charges being laid?
Quoted from the article:
QuoteIn September, at a speech at NYU, Holder defended the lack of prosecutions of top executives on the grounds that, in the corporate context, sometimes bad things just happen without actual people being responsible. "Responsibility remains so diffuse, and top executives so insulated," Holder said, "that any misconduct could again be considered more a symptom of the institution's culture than a result of the willful actions of any single individual."
Read more: http://www.rollingstone.com/politics/news/the-9-billion-witness-20141106#ixzz3IQ9lPA1A
Follow us: @rollingstone on Twitter | RollingStone on Facebook
It doesn't sound like any charges will be forthcoming.
Quote from: Jacob on November 07, 2014, 03:40:39 PM
Quote from: The Minsky Moment on November 07, 2014, 02:26:31 PM
I've read enough Matt Taibbi in my life to be wary of reading more.
If someone will take on excepting some key points I'll look.
I took away two main points:
1) The lady he's interviewing worked at Chase in compliance and says she saw deliberate fraud, that she was told not to voice any concerns in writing; she also alleges that the DoJ was not interested in hearing from her beyond an initial conversation.
2) The penalties levelled against Chase are said to be a big number meaning little, in that most of it wasn't paid for by the bank, could be written off in taxes, and/or were money they were paying anyway in unrelated ways.
I don't know enough about these things to say how credible they are, which is why I brought it up here.
Oh, and I think they also so say that key senior people in the DoJ investigation and settlement have moved or are moving to senior positions in the companies they investigated.
I reads like a witness who doesnt really understand what the case was or how the Plaintiff was proceeding or why. That is not uncommon.
Quote from: Barrister on November 07, 2014, 04:47:01 PM
It doesn't sound like any charges will be forthcoming.
Criminal charges would be brought by one of the regional US attorney's offices. The Attorney General usually does not interfere in that process. I don't know the details of these investigations (for that matter - neither does Taibbi or Rolling Stone). I do know that if there is a case to made a US attorney would be bringing and making that case. There is no reticence in the US attorneys offices to bring white collar cases; to the contrary, here in Manhattan they are a priority, with dedicated teams of attorneys compromising some of their best people.
Quote from: The Minsky Moment on November 07, 2014, 04:07:38 PM
2) The settlement was reviewed by a judge. And approved.
Shocking!
Quote from: The Minsky Moment on November 07, 2014, 05:07:21 PM
I do know that if there is a case to made a US attorney would be bringing and making that case. There is no reticence in the US attorneys offices to bring white collar cases; to the contrary, here in Manhattan they are a priority, with dedicated teams of attorneys compromising some of their best people.
No US attorney in his right mind is going to bring charges against his future employers.
Quote from: citizen k on November 07, 2014, 05:32:20 PM
Quote from: The Minsky Moment on November 07, 2014, 04:07:38 PM
2) The settlement was reviewed by a judge. And approved.
Shocking!
Sadly it isn't shocking that a journalist would make a "mistake" that obvious.
Quote from: CountDeMoney on November 07, 2014, 06:42:52 PM
No US attorney in his right mind is going to bring charges against his future employers.
Of course they would. It's priming the market. By being very aggressive, the USA/AUSAs create a need and a market for attorneys to advise big companies on how to handle to big, high stakes investigations. And who better (and more credible) to give that advice than the man or woman who literally wrote the book on how those investigations are prosecuted.
A USA/AUSA who sits around risks losing profile in the market.
It's good to know that after all was said and done, there was no wrong doing at all, the system worked as designed, and no changes needed to be made, or needs to be made. And certainly nobody should have been held responsible for anything, because it turns out that the system actually is doing exactly what it ought to do.
Nothing to see here, move right along. Go back to arguing over Obamacare, please.
Quote from: Berkut on November 08, 2014, 12:31:58 AM
It's good to know that after all was said and done, there was no wrong doing at all, the system worked as designed, and no changes needed to be made, or needs to be made.
Well yes, if you believe Matt Taibbi, there was no wrong doing. Because according to Matt Taibbi, everyone from the Attorney General of the United States down to a fresh new lawyer at the SEC, and everyone from Jamie Damon down to the entry level compliance officer, with the singular exception of a brave "pale blue-eyed" former employee with "striking skills", is a liar, knave and crook engaged in a massive conspiracy and cover-up. And because that is plainly asinine, the whole thing must be crock and nothing went wrong after all.
Of course back in the real world, the mis-marketing of a $900 million securities issuance - of which the losses Mr. Taibbi does not bother to inform us - lead to a $9 billion fine. So in the real world it certainly looks like there was a lot of wrong doing and the government investigated and punished the wrong doers. In Taibbiland, the truth is still out there and only his "tall, thin quick-witted" hero has the answers (along with Tom Cruise and whoever else played a Grisham hero); in the real world the government made JPM sign a statement admitting wrong-doing which is almost unheard of in a civil case. That JPMC signed a statement of wrong-doing would suggest to me that there might have been wrong-doing, but perhaps you know something we don't.
Or perhaps like Matt, you think the 10 pages is too short a statement. Then again if it were 200 pages, Matt would complain it was too long and the fact were being buried behind lots of words that it would take even a dedicated law student too long to read. There are all sorts of con jobs in this world, even journalistic ones.
His name was Denzel Washington. That's so racist, man.
Quote from: The Minsky Moment on November 08, 2014, 12:03:07 AM
Of course they would. It's priming the market. By being very aggressive, the USA/AUSAs create a need and a market for attorneys to advise big companies on how to handle to big, high stakes investigations. And who better (and more credible) to give that advice than the man or woman who literally wrote the book on how those investigations are prosecuted.
A USA/AUSA who sits around risks losing profile in the market.
Bro, this is the closest I've ever seen to you losing your shit.
Well, I also get testy when people want to jail my friends. ;)
Quote from: Martinus on November 08, 2014, 03:38:53 AM
Well, I also get testy when people want to jail my friends. ;)
:lol:
Quote from: Martinus on November 08, 2014, 03:38:53 AM
Well, I also get testy when people want to jail my friends. ;)
I only wish had one of those huge RMBS cases . . . :(
It could very well be that the JPM settlement was a crappy deal. If you wanted to investigate it, you could look into how much paper JPM sold, and what the losses actually were. You could get into the details and figure out what the legal claims and defenses were and handicap the likely results. That might not be so exciting but it would be informative.
What we get instead is the bad side of gonzo journalism, a kind of reporting that leaves us less informed than when we began.
There is another unmentioned aspect here which is a lot of the really bad stuff happened at Bear Stearns. So then why is JPM the one paying? Because Bear Stearns doesn't exist anymore, JPM bought bear *after* Bear did the bad stuff with mortgage securitizations.
And what were the circumstances under which JPM purchased Bear? Well at the time there was a massive financial crisis breaking out and the Treasury and the NY Fed basically went to JPM and said -hey we would really appreciate you taking over the mess so that the entire financial system doesn't collapse
(then they changed their minds and let Lehman fail . . .)
So you could look it a couple ways. You could say tough for JPM they bought a bad apple and now they have to eat it, even if their motives were not so evil. Or you could say no good deed goes unpunished.
Either way at least on the Bear side, it is a little difficult for me to get up high moral dudgeon against JPM for those losses.
Doesn't seem like you get in a high moral dungeon, or a low moral dungeon, over anything or anyone having to do with the uber rich doing their bit to become uber richier.
Quote from: Berkut on November 08, 2014, 10:29:55 AM
Doesn't seem like you get in a high moral dungeon, or a low moral dungeon, over anything or anyone having to do with the uber rich doing their bit to become uber richier.
With every opportunity of doing it again. And again. And again.
Quote from: Berkut on November 08, 2014, 10:29:55 AM
Doesn't seem like you get in a high moral dungeon, or a low moral dungeon, over anything or anyone having to do with the uber rich doing their bit to become uber richier.
Responding to the Bear Stearns side that MM was referencing, you had this sequence of events:
1. Bear Stearns is on the precipice of collapse.
2. The federal reserve believes the collapse will cause an economic crisis. In a series of meetings into the small hours of the night, it entices JPM to take over Bear Stearns to prevent its collapse.
3. Years later, under pressure to hold people accountable, the government pursues massive penalties against JPM for misdeeds done by Bear Stearns, as JPM is its successor institution.
The JPM - Bear Stearns transaction was not the first time the federal reserve used private companies to help stem systematic risk related to a financial failure. It doesn't take a rocket scientist to see that the next time the problem comes up, the federal reserve may find that private partners are difficult to locate.
However the particular series of transactions referenced in the article appear not to have involved Bear Sterns.
Quote from: Admiral Yi on November 08, 2014, 02:00:43 PM
However the particular series of transactions referenced in the article appear not to have involved Bear Sterns.
I know, but MM referenced them, and Berkut seemed to be responding to something he wrote in that reference.
Quote from: Admiral Yi on November 08, 2014, 02:00:43 PM
However the particular series of transactions referenced in the article appear not to have involved Bear Sterns.
The transaction referenced in the article was a $900 million deal.
The cash fine was $9 billion total.
Quote
Banks pay up and carry on after FX fines 11:54am EST * Return seen to business as usual
* Call for punishments to go beyond fines
* "Wild West" financial markets need reform
By Patrick Graham (http://blogs.reuters.com/search/journalist.php?edition=us&n=patrick.graham&) and Jamie McGeever (http://blogs.reuters.com/search/journalist.php?edition=us&n=jamie.mcgeever&)
LONDON, Nov 12 (Reuters) - Far from chastening the world's biggest currency trading firms, the multi-billion dollar fines levied by regulators on Wednesday are more likely to draw a line under the affair and gradually allow a return to business as usual.
A year into a wide-ranging industry probe into charges that banks routinely fleeced clients over currencies, industry observers and politicians were frustrated by a deal they said showed the affair will end just with fines rather than any reform of what they say is the Wild West of financial markets.
The $4.3 billion in fines handed down on Wednesday are unprecedented, but do not mark the end of the process; individuals may yet be prosecuted and time will tell if that discourages the next generation of traders from doing what they have always tended to do naturally: put their interests ahead of their banks, their banks' interest ahead of the client's and the client's last.
The U.S. Department of Justice has also yet to report and has been a heavier hitter than its European peers to date, a hint that it may yet have the appetite to push for more fundamental change.
But in essence, Wednesday's rulings put the foreign exchange market, long "self-regulated" by banks and people who provide services to banks, well on the way to seeing off any risk of a new era of overarching global regulation.
"It seems to be business as usual -- banks blow up, pay fines, and we move on. They just seem to be inventing new ways to break the rules," said Mark Garnier, a former City financier and Conservative member of the UK parliamentary committee charged with overseeing finance.
"The fines are meaningless. £400 million or £4 billion. There's only one fine that's important and that's if they're being taken out of traders' bonus pool. The individuals and those around them have to start feeling the pinch as well, not the banks' shareholders, staff and customers."
MONEY-SPINNER
Frightened a year ago by the prospect of fines that dwarfed those handed out in the Libor interest rate rigging scandal and regulation that might eat into profits from one of their biggest money-spinners, banks have invested millions in trying to put a lid on the fixing row.
Industry figures say they have found ready support in a British political establishment worried over the impact on the status of London as the world's main currency trading hub, responsible for an estimated 40 percent of all daily flows.
The strategy, broadly, has been to put the blame on a handful of rogue "bad apples" who just happened to be ranking currency traders in each of the industry's dominant players.
They have fallen over themselves to play ball with the regulators and, given the complicated technical and financial nature of the probe, lawyers and consultants employed by banks have done much of the actual investigative work.
"The banks have been allowed to investigate themselves," one source familiar with the investigation told Reuters. "The investigated decide what they want to investigate, what they admit to, and how much they will pay."
DOMINANCE
The regulator will now ensure that standards for systems and controls at the other 36 banks in the industry will be overhauled, with managers attesting that action has been taken, ensuring individual accountability.
In a process overseen by the G20's regulatory arm, the Financial Stability Board, banks and investment managers have agreed to changes including an extension of the window in which the main fixing benchmarks are measured, a separation of fixing orders from spot trading and efforts to unify codes of conduct.
But traders have already begun to point to weakness in those reforms, whose effect they say will be to strengthen the still growing dominance of Citi, Deutsche Bank and Barclays, and a handful of others, over the market.
"In the broader picture, it often seems to me like this has just been a land grab by the regulatory, advisory and legal profession in banking," one senior dealer told Reuters, speaking on condition of anonymity.
Industry professionals have argued strongly that there is no reason to make forex as tightly regulated as stock or derivative markets -- by putting trading on exchanges for example -- because it is a cash market that hence carries none of the systemic risk behind the 2008 crisis.
In that vein, it seems no surprise that UK finance minister George Osborne has effectively kicked discussion of any further changes, under the UK Fair and Effective Markets Review, back past next year's parliamentary elections.
"I cannot now imagine the scenario under which Osborne or any other politician presses for something heavier than what is now on the table," one senior figure in London banking told Reuters last month, speaking on condition of anonymity.
"I hope that means we can get back to something resembling normal business pretty soon."
/quote]
Now that's a scandal.
Quote from: The Minsky Moment on November 14, 2014, 10:10:22 AM
Now that's a scandal.
Don't worry, I'm sure they'll make up the money in short order. It won't be missed too long.