Showing posts with label white collar crime. Show all posts
Showing posts with label white collar crime. Show all posts

Monday, October 28, 2013

The Past Will Come Back To Haunt Us:

The iconic Halloween monster is undying - whether it be demons, vampires, Michael Myers or Freddy Kruger. They keep coming back to do us harm.



And so it is with the policy of the modern far left - horrifying and undying. In this instance, the same policies that gave us the financial meltdown of 2008 are not merely alive and well, but being strengthened under Obama.

In 2008, I composed a long post, Hurricane Subprime, taking an in depth look at the causes of our economic meltdown. The "but for" cause of the Great Recession was social engineering that eviscerated color-blind credit rating standards. And as I pointed out when Dodd Frank was proposed, the Obama administration, rather than correcting this insanity, actually doubled down on it. Now this from Power Line:

The Obama administration is pressing ahead with its plan to impose racial quotas on the financial industry via the Dood-Frank law. Dodd-Frank requires agencies with financial sector regulatory responsibilities to “establish an Office of Minority and Women Inclusion” that will develop diversity and inclusion standards for workplaces and contracting.

Accordingly, these agencies have published in the Federal Register a proposed “Policy Statement Establishing Joint Standards for Assessing the Diversity Policies and Practices of Entities Regulated by the Agencies.” As Roger Clegg reports, that Statement, which applies not only to the agencies themselves but also to all those regulated by it, insists on the use of “metrics” and “percentage[s]“ to ensure compliance with the diversity requirement.

In other words it imposes quotas — quotas that will apply to hiring, promotion, and contracting.

There’s plenty of irony here; for it was the imposition of race-conscious lending practices on the banking industry that led to the financial crisis, that led to Dodd-Frank. . . .

This is horrendous. But as bad as it is, it is not the only devastating policy that gave us the melt-down - and which remains ensconced in our financial system. As I pointed out in Hurricane Subprime, the only unknown at the time was how the Credit Rating Bureaus played into all of this. They were supposed to be the backstop which would have prevented the financial crisis. But these agencies were wholly complicit in giving AAA ratings to subprime mortgage backed securities so that they could be traded throughout our financial system - many institutions by law can only purchase AAA rated securities. Clearly these rating agencies did not function as they should have. The "why" was finally answered in a superb article in Rolling Stone, The Last Mystery Of The Financial Crisis:

Thanks to a mountain of evidence gathered for a pair of major lawsuits by the San Diego-based law firm Robbins Geller Rudman & Dowd, documents that for the most part have never been seen by the general public, we now know that the nation's two top ratings companies, Moody's and S&P, have for many years been shameless tools for the banks, willing to give just about anything a high rating in exchange for cash.

In incriminating e-mail after incriminating e-mail, executives and analysts from these companies are caught admitting their entire business model is crooked.

"Lord help our fucking scam . . . this has to be the stupidest place I have worked at," writes one Standard & Poor's executive. "As you know, I had difficulties explaining 'HOW' we got to those numbers since there is no science behind it," confesses a high-ranking S&P analyst. "If we are just going to make it up in order to rate deals, then quants [quantitative analysts] are of precious little value," complains another senior S&P man. "Let's hope we are all wealthy and retired by the time this house of card[s] falters," ruminates one more. . . .

Do read the whole article - it will leave you wanting to grab the pitchforks and torches. It should also be noted that Obama has not put a single one of these people in jail. Sure, there have been a few civil suits that have amounted to hitting up organizations for a bit of their pocket change. But countless people who committed outright fraud, albeit almost forced to by Barney Frank and the left, have skated because, to hold them accountable would require that the whole house of cards created by left be exposed.

It should also be noted from the article that a simple fix to this utterly broken credit rating system was actually proposed by Sen. Al Franken. It died - I hate to say this - in the Republican controlled House. It is just beyond belief.







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Thursday, December 13, 2012

Scandalous: The Obama Administration Refuses To Prosecute HSBC For Money Laundering

HSBC, Britain's largest bank, knowingly. intentionally, and for years violated U.S. banking laws to launder billions of dollars from drug cartels and from rogue nations under sanctions. This was not simple negligence, this was purely criminal.

There should be a line of HSBC managers and compliance employees being measured now for prison suits, in addition to HSBC itself being prosecuted. Instead, the Obama administration has done precisely what they've done in virtually all high profile white collar criminal cases. They have failed to prosecute. Instead, they have given HSBC a civil fine of $1.9 billlion - a slap on the wrist for an institution that made $16.8 billion in profit in 2011.

For all of his anti-Wall St. and class warfare rhetoric, Obama has been AWOL when it comes to holding actual Wall St. criminals liable. Indeed, under Obama, if you are a criminal, the safest place to be is Wall St., a major bank or a hedge fund operator.

The economic meltdown from the housing bubble should have led to a whole host of criminal prosecutions for fraud. When sub-prime loans were being bundled and resold with a AAA rating, that was not within the realm of reasonable opinion, that was criminal. When Goldman Sachs marketed four sets of complex mortgage securities to banks and other investors without warning of the high risk, or when they "secretly bet against the investors' positions and deceived the investors about its own positions to shift risk from its balance sheet to theirs," that is fraud. Yet the Obama DOJ refused to prosecute Goldman Sachs or anyone else.

As near as I can tell, no one from the economic melt-down of 2007 has been prosecuted by Obama - and its not hard to understand why. That melt-down was caused by Democrat policies over a period of two decades - ones fought by Bush, McCain and most other Republicans. To prosecute anyone for the crimes that occurred in the creation of the melt-down would shine a bright light on the facts - as well as the utter canard that the melt-down was caused by Republican economic policies or de-regulation.

Then there is Jon Corzine, former Democratic governor of NJ, hedge fund manager of MF Global - and the man who oversaw the fraudulent misuse and loss of $1.2 billion in customer funds. He is still walking the streets - and was a major bundler of funds for Obama in the most recent election.

And now HSBC with no criminal prosecutions of either the institution or the individual culprits. As to the institution:

US authorities defended their decision not to prosecute HSBC for accepting the tainted money of rogue states and drug lords on Tuesday, insisting that a $1.9bn fine for a litany of offences was preferable to the “collateral consequences” of taking the bank to court.

Had the US authorities decided to press criminal charges, HSBC would almost certainly have lost its banking licence in the US, the future of the institution would have been under threat and the entire banking system would have been destabilised.

HSBC, Britain’s biggest bank, said it was “profoundly sorry” for what it called “past mistakes” . . .

Breuer was pressed on why the US authorities had agreed to a deferred prosecution deal for the bank. He dismissed accusations that prosecutors had not been hard enough and said that the Justice Department had looked at the “collateral consequences” to prosecuting the HSBC or taking away its US banking licence. Such a move could have cost thousands of jobs, he said.

HSBC has already sacked all the senior staff involved in the scandal, and agreed to stringent monitoring – the first time a foreign bank has agreed to such oversight. “In this day and age we have to evaluate that innocent people will face very big consequences if you make a decision,” said Breuer. “I don’t think anyone is alleging that HSBC was the mastermind of the scheme,” he said. Rather it was their “incredibly lax” monitoring that was to blame. “HSBC was a vital player,” he said. “But they are not the Sinaloa cartel.”

What utter bullshit this is. One, this is a decision that HSBC is large enough that they can avoid criminal sanctions that would be used to crush smaller competitors under this scenario. Two, Breuer's attempt to minimize HSBC's actions as merely "lax monitoriong" is itself a fraud. You had employees being instructed by management to erase identifying information on transactions specifically so the U.S. authorities would not identify them as coming from unlawful sources. That wasn't lax monitoring, it was knowing and intentional money laundering. And a "my bad" from HSBC is not quite sufficient. If the only consequence for the individuals involved is that they got "sacked," that stinks of trying to hide facts that prosecution of these individuals would bring to light.

The Obama administration is utterly lawless. Obama's class warfare rhetoric is nothing but pure window dressing. This really is scandalous.





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