Control Fraud and The Culture of Plunder - Exceeding losses of all property crimes

[cyu]

http://www.zerohedge.com/news/bill-black-our-system-so-flawed-fraud-mathematically-guaranteed

When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it.

the US has descended into a type of capitalism that makes continued fraud a virtual certainty - while increasingly neutering the safeguards intended to prevent and punish such abuse

control fraud means when you have a seemingly legitimate entity and the person who controls it uses it as a weapon to defraud others. in the financial sphere the weapon of choice is accounting and the losses from these kinds of control frauds exceed the financial losses from all other forms of property crime combined.

you have a seemingly legitimate entity, the person at the top is looting it. They loot it by destroying it but they walk away wealthy. in the modern era, we may bail out the entity. So it may not even fail in that sense.

all report to the CEO and the CEO therefore can use compensation, hiring, firing, praise, and such to produce the environment that will commit, create allies for his fraud

[cyu]

http://www.allgov.com/Top_Stories/ViewNews/Federal_Reserve_Board_Members_Gave_Their_Own_Banks _4_Trillion_Dollars_in_Bailouts_120614

the Federal Reserve provided more than $4 trillion in near zero-interest loans to businesses whose executives also served as directors for the national bank.

At least 18 current and former bank directors had a direct stake in the trillion-dollar bailout

“At a time when small businesses could not get affordable loans to create jobs, the Fed was providing trillions in secret loans to some of the largest banks and corporations that were well represented on the boards.”

Sanders cited the example of Jamie Dimon, chief executive officer of JPMorgan Chase. A director of the Federal Reserve Bank of New York, Dimon was part of the Fed’s leadership when it approved $391 billion in emergency funds to JPMorgan Chase.

Jeffrey Immelt, the CEO of General Electric, was a member of the New York Federal Reserve when it lent $16 billion to…General Electric.

[cyu]

http://finance.yahoo.com/blogs/daily-ticker/ex-stock-broker-realized-most-did-bad-clients-134422604.html

Many of those who work on Wall Street gradually learn that "smart investing" is often unbelievably dumb. they learn that many of the recommendations that Wall Street makes--and the transactions that Wall Street gets paid to facilitate--are not in their clients' best interests.

once they learn that, they face a choice between two options:
1.Continue to make the same bad recommendations and trades.
2.Change the way they do business, often in exchange for a lower initial salary.

your job is to buy things with your clients money. That's it. When you are not doing that they pull the money

When times were bad, he was forced to continue to buying, choosing the stocks that were the lesser of all evils. he realized that he was hurting clients by selling them stocks he didn't think they should buy.

Stock brokers generally work for brokerage firms and do not have to recommend trades that they think are in their clients' best interests. Rather, they just have to recommend securities that are "suitable" (a much lower standard). Financial advisers, meanwhile, have a fiduciary duty to act in the best interests of their clients. Even though this standard is often violated

[cyu]

http://www.bloomberg.com/news/2012-10-28/why-does-the-sec-protect-banks-dirty-secrets-.html

he sent an “urgent” e-mail to executives including Robert Rubin, the former U.S. Treasury secretary who was chairman of the executive committee, and the chief financial officer, raising concerns about “breakdowns in internal controls and resulting significant but possibly unrecognized financial losses.” he had discovered that 60 percent of the mortgages that Citigroup had bought from third parties, or $30 billion, were “defective,” they didn’t meet Citigroup’s underwriting criteria. Nevertheless, they were still packaged up and sold as securities.

The Citigroup executives did next to nothing. There were no noticeable changes in the mortgage machinery as a result of Bowen’s warning.

By the time of Rubin’s FCIC testimony, Citigroup had been bailed out with $45 billion in cash from the American people. Rubin pocketed $126 million in his 10 or so years at the company. Bowen was stripped of his responsibilities at Citigroup soon after writing the infamous e-mail.

Bowen also alerted the Securities and Exchange Commission, hoping it would investigate the “breakdowns of internal controls” and take legal action. Before the bailout of Citigroup, he gave the SEC 1,000 or so pages of documents, detailing the extent of Citigroup’s problems.

the SEC did nothing to pursue Bowen’s claims before billions of taxpayer dollars were used to rescue Citigroup. It has a horrendous track record of fulfilling FOIA requests. the agency begrudgingly gives out the bare minimum long after I really needed it.

I had been told that once the investigations were concluded that my material would be available to the public via FOIA. to hear now that the SEC has made the decision that no, it cannot be available, quite frankly, I’m totally outraged.

[cyu]

Saving Capitalism by any means necessary

http://www.washingtonsblog.com/2013/01/12-of-the-13-big-banks-went-bust-and-the-government-lied-when-it-said-it-only-bailed-out-healthy-banks.html

The big banks were all insolvent during the 1980s. And they all became insolvent again in 2008.

Paulson and Bernanke falsely stated that the big banks receiving Tarp money were healthy, when they were not.

Tim Geithner falsely stated that the banks passed some objective stress test but they did not. the “stress tests” in both Europe and America have been a total scam … a naked attempt to cover up the fact that the banks are insolvent.

The main reason banks didn’t lend out bailout funds is actually pretty simple: Many of them needed the money just to survive.

Bernanke gave a closed-door interview to the Financial Crisis Inquiry Commission, in which he admitted that 12 of the 13 most prominent financial companies in America were on the brink of failure during the time of the initial bailouts.

A month after the bailout team called the top banks “healthy,” it became clear that the biggest recipient, Citigroup, had actually flat-lined on the ER table. Only weeks after Paulson gave the firm $25 billion, Citi – which was posting a quarterly loss of $17 billion – came back begging for more. In November, Citi received another $20 billion in cash and more than $300 billion in guarantees.

instead of using the bailouts as a clear-the-air moment, the government decided to double down on such fraud, awarding healthy ratings to these failing banks and twisting its numerical audits to fit the narrative.

the government has turned the financial system into a vast confidence game – a Ponzi-like scam in which the value of everything in the system is inflated because of the belief that the government will step in to prevent losses.

[cyu]

http://www.bloomberg.com/news/2013-02-20/why-should-taxpayers-give-big-banks-83-billion-a-year-.html

The larger they are, the more disastrous their failure would be and the more certain they can be of a government bailout in an emergency. The result is an implicit subsidy: The banks that are potentially the most dangerous can borrow at lower rates, because creditors perceive them as too big to fail.

Multiplied by the total liabilities of the 10 largest U.S. banks by assets, it amounts to a taxpayer subsidy of $83 billion a year. To put the figure in perspective, it’s tantamount to the government giving the banks about 3 cents of every tax dollar collected.

The top five banks -- JPMorgan, Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and Goldman Sachs Group Inc. -- account for $64 billion of the total subsidy, an amount roughly equal to their typical annual profits. In other words, the banks occupying the commanding heights of the U.S. financial industry -- with almost $9 trillion in assets, more than half the size of the U.S. economy -- would just about break even in the absence of essentially transfers from taxpayers to their shareholders.

the financial industry spends hundreds of millions of dollars every election cycle on campaign donations and lobbying, much of which is aimed at maintaining the subsidy.

[cyu]

http://billmoyers.com/2013/08/26/what-economic-sleuths-can-tell-us-about-our-corrupt-politics

Henry “Scoop” Jackson, the senior senator from Washington, had been a huge presence in the upper chamber. When he died, Sam Nunn (D-GA), took his gavel. the share prices of companies with ties to Jackson tanked at the news, while firms that had close relationships with Nunn saw significant gains.

after Vermont Senator Jim Jeffords left the Republican Party in 2001, handing control of the Senate to the Dems, “firms that had given heavily to Republicans lost value on the New York Stock Exchange,” while share prices for companies that had given to Democrats spiked.

the stock value of companies with former Republican lawmakers on their boards increased by an average of three percent when the Supreme Court handed the 2000 election to George W. Bush, while companies with former Democratic politicians on their boards dropped by the same amount.

the value of a political connection isn’t the same in every country. In those with high levels of corruption, cozying up to a politician gives a company significantly more benefit

[cyu]

http://www.dailykos.com/story/2013/12/22/1264778/--PBS-Drops-a-Bombshell-on-the-Federal-Reserve-s-100th-Birthday-Party-by-Pam-Martens

Instead of a debate, two famous stock market historians made the same stunning announcement – that the Fed has decided its job is to push up the stock market.

The Fed is manipulating prices, especially on Wall Street.

if you work for 50 years and receive the typical long-term return of 7 percent on your 401(k) plan and your fees are 2 percent, almost two-thirds of your account will go to Wall Street. Under a typical 2 percent 401(k) fee structure, almost two-thirds of your working life will go toward paying obscene compensation to Wall Street; a little over one-third will benefit your family – and that’s before paying taxes on withdrawals.

the Federal Reserve is ignoring the fact that the majority of stock market wealth is ending up in the hands of the top 10 percent

[Sea]

the Federal Reserve is ignoring the fact that the majority of stock market wealth is ending up in the hands of the top 10 percentOooh, I think they're perfectly conscious of that fact.

[cyu]

The Farce Is Complete

http://www.zerohedge.com/news/2014-02-06/farce-complete-blythe-masters-joining-cftc

Blythe Masters, head of JPMorgan Chase & Co.’s commodities division, is joining an advisory committee of the U.S. Commodity Futures Trading Commission. Masters, was invited by acting Chairman Mark Wetjen to sit on a global markets committee at the Washington-based regulator of futures and swaps

this certified commodity market manipulator just got a job with none other than the head commodity regulators in the US?

now it will be Blythe Masters on top of the one regulators that is supposed to enforce a fair, honest and efficient commodities market.

It's almost as if they are explicitly telling the handful of people who still care about this entire charade a resounding "fuck you."

http://www.zerohedge.com/news/2014-02-07/blythe-masters-withdraws-cftc-furious-twitter-backlash-blamed

Blythe Master has withdrawn from the CFTC. The culprit for Masters' resignation in just 24 hours? A very angry Twitter.

Perhaps there is some justice in the world.

does this premature resignation confirm that the allegations against the JPMorganite are in fact true and accurate? can Ms. Masters also please advise what other markets she was manipulating?

[cyu]

http://www.vox.com/2014/4/11/5602188/the-secs-just-been-caught-colluding-with-the-banks-its-supposed-to

The Securities and Exchange Commission is one of the main agencies that's supposed to be regulating Wall Street. But they've been essentially caught red handed working together with Goldman Sachs to make it look like Goldman was paying a huge fine when really they're paying a small one.

people who sell products that fail are held in low regard. People who sell products that they know to be likely to fail are held in lower regard. People who sell products that they in fact intend to fail and who've arranged financial bets such that failure will result in higher profits are held in even lower regard.

Each bank settled a single case, and then there were no more cases. the SEC's conclusion that every bank had created one and only one prosecution-worthy CDO was extremely fishy. That would be one heck of a coincidence.

rather than Goldman paying $550 million for wrongdoing around the Abacus CDO and then facing 10 more charges related to 10 other suspicious CDOs, it was paying a price of $55 million per CDO to settle all 11 cases. Except the SEC didn't want to look like it was letting the banks get away with a slap on the wrist, so it worked out an arrangement whereby both sides would publicly act as if only one case had been settled while agreeing under the table that all claims were now resolved.

to pull something like this off requires an exceptional level of trust between high-ranking SEC officials and high-ranking bank officials.

there is a culture of impunity on Wall Street, abetted by an SEC that is more interested in looking tough in press releases than in actually acting tough.

the appearance of a big settlement is sometimes more important than the reality so that the key to getting a favorable arrangement is to let the regulators post wins on the board that they can brag about in public.

[cyu]

http://www.bloomberg.com/news/2014-07-04/house-says-staff-absolutely-immune-in-answer-to-sec.html

The Ways and Means Committee and a top staff member say the panel and its employees are “absolutely immune” from having to comply with a federal regulator in an insider-trading probe.

Kircher said it concerns legislative activities protected by the Constitution, which can’t be reviewed by judges.

The regulator is investigating a spike in trading of health-insurance companies, including Humana Inc., ahead of a government announcement that increased, rather than cut, payments to insurers. The lobbyist disclosed the health policy changes to an analyst at Height Securities LLC.

Within five minutes of the Height Securities’ report, prices and trading volumes of health care insurers spiked, with Humana rising 7 percent.