Daily Archives: March 24, 2015

The statute of limitations expires this year for big bank mortgage frauds that crashed the economy in 2008, Leaving wall st lawless guarantees another, bigger, financial disaster!

Investmentwatch blog:

This is the last chance to get the DOJ to act on Alayne Fleischmann’s evidence of felony mortgage securities fraud, which she witnessed when she was at JP Morgan Chase from 2006 – 2008.

She’s a securities lawyer by training, but worked as a deal manager there.

Her documentation of the fraud she witnessed, and tried to stop, as well as her depositions with the SEC and DOJ lead to the increase in the civil penalty (13 Billion) JPMorgan paid in November (9 Billion after their tax write offs !!)

I have a chase card. Prosecuting bank officers for fraud will not crash the institution. It will make it stronger, and the system as a whole.

We have 6 1/2 years of evidence that civil penalties offer no deterrence ……we’ve gone from securities fraud to money laundering, commodities rigging, international rate rigging etc……

Banks don’t commit fraud. Bank officers do.

In the 80’s and 90’s, juries found over a 1000 senior bank officers guilty of fraud in the S=L crisis, Enron, WorldCom etc.

When juries hear the evidence, they are able to understand it.

Those CEOs
Lost their jobs
Paid personal fines
Returned the bonuses made on the fraud
Went to jail
In this era, only the borrowers (mice) have been prosecuted, but not one bank officer, despite hard evidence.

See william black here, who did send over 1000 top bank officers to jail in the late 80’s for the same frauds, talking about lack of political will today:


Leaving wall st lawless guarantees another, bigger, financial disaster.

U.S. judge refuses to toss Libor criminal complaint vs. Swiss UBS trader

There are so many interesting jurisdictional issues in the U.S. government’s prosecution of foreign bankers allegedly involved in the manipulation of benchmark London Interbank Offered Rates, calculated in London under the auspices of the British Bankers’ Association. Last December, Covington & Burling laid out at least three solid arguments for why U.S. courts shouldn’t hear the government’s criminal case against Roger Darin, a Swiss UBS interest-rate trader charged with one count of conspiracy to commit wire fraud by supposedly submitting false reports of UBS’ yen Libor, including the territorial limits of the U.S. wire fraud statute and Darin’s due process right not to be tried in U.S. courts for conduct that took place entirely outside of the United States.

But in an opinion issued Friday, U.S. Magistrate Judge James Francis of Manhattan made clear that Libor defendants aren’t going to be able to slough off U.S. criminal charges with jurisdictional arguments. The magistrate judge took quite a broad view of what constitutes a “nexus” between Darin and the United States. Under his interpretation, as long as an alleged Libor conspiracy participant was aware that the rates were published in the United States and were likely to affect trades with U.S. counterparties, the defendant can be tried in U.S. courts.

Darin’s motion to dismiss the government’s criminal complaint argued that the UBS trader had no connection with the United States. He’s a Swiss citizen who worked in UBS’ Zurich, Singapore and Tokyo offices. He reported a daily hypothetical rate for interbank yen loans via a British regulatory body. And according to his lawyers at Covington, Darin had no idea that submitting a false report could be construed as a crime in the United States. His emails, they said, reflect that his biggest concern was not that he’d face prosecution but that UBS would be kicked off the panel of 16 banks whose reports determined the daily yen Libor average.

Read on.

Ex-Rabobank trader pleads guilty to conspiracy charge in U.S. Libor case

(Reuters) – A former trader at Dutch lender Rabobank [RABO.UL] pleaded guilty on Monday to U.S. charges that he took part in a scheme to manipulate Libor, the benchmark interest rate at the center of global investigations into misconduct at various banks.

Lee Stewart, a former senior derivatives trader for Rabobank in London, entered his plea in federal court in Manhattan before U.S. District Judge Jed Rakoff. He is set to be sentenced in June 2017, according to a Department of Justice spokesman.

Libor, or the London interbank offered rate, is a key short-term rate that banks charge each other for loans. The rate underpins hundreds of trillions of dollars of financial products from mortgages to credit card loans worldwide.
Read on.

Senator David Perdue wants CFPB under Congressional oversight

CFPB is under attack by Congress!

It’s clear that the Consumer Financial Protection Bureauand its behavior elicit strong opinions from Capitol Hill and beyond.

Earlier this month, House Financial Services Committee Chairman Jeb Hensarling, R-Texas, called the CFPB the “single most powerful and least accountable Federal agency in all of Washington.” Hensarling’s colleague, Rep. Randy Neugebauer, R-Texas, Chairman of the Financial Services Subcommittee on Financial Institutions and Consumer Credit, recently suggested that the CFPB operates with a “lack of transparency and lack of accountability.”

And now, one U.S. Senator is calling the CFPB a “rogue agency” that needs to be seriously reined in.

“The reckless Consumer Finance Protection Bureau was spawned from the disastrous Dodd-Frank financial regulation law,” Senator David Perdue, R-GA, said.

“Right now, the CFPB is a rogue agency that dishes out malicious financial policy and creates new rules and regulations without any oversight from Congress,” Perdue added. “On top of that, the agency itself has failed to operate within its own budget and proven it is more concerned with preserving its own power than protecting the public.”

Perdue is seeking to change all of that by introducing a budget amendment to make the CFPB subject to the Congressional appropriations process. “Currently, the CFPB operates under the Federal Reserve and is unaccountable to Congress,” Perdue’s office said in a release.

Read on.

Ocwen fires back at “disingenuous” charges of negligence

Ocwen Financial (OCN) is doubling down in its fight against a group of mortgage bond investors that accused the nonbank off ailing to properly collect payments on mortgage loans and breaching its bond covenants.

In January, a group of investors, which includes BlackRockMetLife, and PIMCO, said that Ocwen failed to perform its contractual obligations as a servicer by failing to properly collect payments on $82 billion of home loans. In a subsequent letter, cited in a report from Compass Point Research and Trading, the investors said that Ocwen’s failures as a mortgage servicer cost bond investors approximately $26 billion.

Read on.