Daily Archives: May 25, 2015

Greece will not make June IMF repayment: interior minister

Greece has again threatened to default on loan repayments due to the International Monetary Fund, saying it will be unable to meet pension and wage bills in June and also reimburse €1.6bn owed to the Fund without a bailout deal with creditors.

“The money won’t be given . . . It isn’t there to be given,” Nikos Voutsis, the interior minister, told the Greek television station Mega.

He claimed the EU and IMF were pressuring Greece to make unacceptable concessions in the current bailout talks in return for unlocking €7.2bn of aid frozen since last year.

Read on.

Elizabeth Warren’s ally on the inside: SEC Kara Stein

After years of criticizing regulators for lax enforcement of securities law, Elizabeth Warren finally has an outspoken ally on the inside pushing for a crackdown on Wall Street offenders.

Kara Stein, the junior Democrat on the Securities and Exchange Commission, has quickly become one of its more ruthless enforcers, making trouble for Wall Street, and aligning herself with Warren’s views as part of a powerful regulator that polices the financial industry.

Stein has opposed giving free passes, or waivers, to badly behaving financial companies so that they can keep doing certain types of business as if nothing happened. Before she started dissenting, the waiver approval was often a routine formality at the SEC.

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Though she may not have the Massachusetts senator’s star power or political ambition, Stein has rattled financial companies, several banking lobbyists said.

“If you have a motion for a waiver pending before the SEC, Stein is your immediate concern,” said Bradley Miller, a former House Democrat who worked on the 2010 Dodd-Frank Act and is now with Grais & Ellsworth LLP.

Even Warren (D-Mass.) told POLITICO she’s impressed with Stein’s aggressive work.

“Kara Stein has worked on securities law and reform issues for years and she really knows her stuff. I’m very pleased that her strong, independent voice is now at the SEC,” Warren said in a statement. A staffer for Stein declined to comment.

Described as a “nerd” by some who know her, Stein may not have the same pulpit that Warren commands from the Senate. But as one of the five SEC commissioners, Stein has a more direct say over Wall Street companies’ businesses.

Stein, 51, and a mother of two, drafted parts of the Dodd-Frank while working for Sen. Jack Reed (D-R.I.) on the Senate Banking Committee. She was appointed to the SEC by President Barack Obama in 2013, the same year Warren joined the Senate.

Earlier this year, she voted against the SEC’s approval of a new kind of complicated financial product, an exchange-traded fund, which she said could be too risky.

And in a recent speech, Stein questioned companies’ love affair with buy backs of shares — warning that the move might be sacrificing long-term growth for short-term gains.

As much as Warren irks big big banks, Stein’s tough stance against waivers that could give them more trouble in the near-term.

“Stein and Warren, in continuing to criticize the waivers over time, have created a debate about waivers. [SEC Chair] Mary Jo White has had to defend those publicly in a way the typically the SEC does not do,” Miller said.

Just this month, Stein blasted an SEC waiver approved for Deutsche Bank, which had agreed to pay $2.5 billion in penalties to settle criminal allegations from the government that it manipulated borrowing rates.

In public remarks two days later, she defended her work opposing waivers for companies that get into trouble.

“It should not be seen as an automatic waiver,” Stein said, speaking May 6 at a conference in Washington. “Maybe we should have time-out waivers, conditional waivers. It’s thinking outside the box again with the existing tool the commission has, which actually might have more deterrent value at the end of the day than a large penalty,” said Stein, the morning after Warren delivered a fiery speech at the same conference. “A large penalty sometimes for a large firm is sort of a speed bump,” Stein said.

Indeed, Stein has voted against waivers at least four times when they’ve come before the SEC, putting her at odds with White.

Read more: http://www.politico.com/story/2015/05/elizabeth-warren-sec-ally-kara-stein-117950.html#ixzz3b84s90VX

Elizabeth Warren is calling for public hearings on banks

Go Elizabeth!!!

NEW YORK (Reuters) – US Senator Elizabeth Warren is calling for U.S. Department of Labor hearings on whether banks accused of rigging foreign exchange markets should be allowed to manage retirement accounts, the Financial Times reported on Sunday.

“When banks plead guilty to a crime, federal agencies must do more than look the other way,” Warren told the Financial Times. “The SEC has already granted waivers to each of these banks without any detailed explanation, but it is not too late for the Department of Labor to hold a public hearing before it decides that such brazen lawbreakers can be trusted managing workers’ retirement accounts.”

Read more: http://www.businessinsider.com/elizabeth-warren-is-calling-for-public-hearings-on-banks-2015-5#ixzz3b7y536d9

First trader to face trial in Libor case heads to court

Not in the U.S.!

LONDON — Banks have paid billions. Regulators and prosecutors have extracted guilty pleas from financial institutions. Dozens of employees have been fired, and at least one chief executive has lost his job.

Now, on Tuesday, the first trader in the sprawling, half-decade-old investigation into the rigging of global benchmark interest rates will go on trial in Southwark Crown Court.

The British authorities have charged Tom Hayes, a 35-year-old former trader from Citigroup and UBS with eight counts of conspiracy to commit fraud. Mr. Hayes’s indictment claims that he was a ringleader among more than a dozen traders engaged in what the authorities say was a brazen attempt to manipulate the London Interbank Offered Rate, or Libor, a reference rate used to set various others, including those for student loans and mortgages.

Mr. Hayes has pleaded not guilty to all eight charges. His lawyer did not return calls seeking comment. UBS and Citigroup declined to comment.

Read on.

Foreclosure ‘Rocket Docket’ to disappear July 1

The rocket docket —streamlined, high-speed processing of foreclosure cases — is abruptly disappearing in Southwest Florida after six years as the number of new cases continues to decline.

But exactly what that will mean for lenders and delinquent borrowers isn’t as clear cut.

After June 30, the state Legislature is no longer funding a statewide program to hire retired judges to work part-time handling the deluge of lawsuits filed by lenders in the wake of the real estate crash that started in 2006.

Funding for the fiscal year that ends June 30 is about $420,000 for the 20th Judicial Circuit, which includes Lee, Collier, Charlotte, Hendry and Glades counties, circuit spokeswoman Sarah Miles said.

Starting July 1, the circuit will no longer have judges doing foreclosures exclusively, Lee County Clerk of Court Linda Doggett said. “They’re going to roll those cases into the regular dockets and it will slow down the disposition.”

But that won’t create a problem, she said, because these days foreclosures are a minor part of the overall caseload: only 101 new foreclosures were filed in the county courts in April.

Read on.

DOJ Ignores Citigroup’s Criminal Record

Assistant Attorney General, Leslie Caldwell, Speaking at Press Conference May 20, 2015

When the U.S. Department of Justice held its press conference on Wednesday to announce that five mega banks were each pleading guilty to a felony charge, paying big fines and being put on probation for three years, Assistant U.S. Attorney General Leslie Caldwell specifically took a battering ram to the reputation of Swiss bank, UBS.

Four banks — Citicorp, a unit of Citigroup, JPMorgan Chase & Co., Royal Bank of Scotland and Barclays — pleaded guilty to an antitrust charge of conspiring to rig foreign currency trading while UBS pleaded guilty to one count of wire fraud for its earlier involvement in rigging the interest rate benchmark, Libor.

In explaining why the Justice Department was ripping up the non-prosecution agreement it had negotiated with UBS in December 2012 over its involvement in the Libor fraud and now charging it with a felony, Caldwell delivered a scathing attack on UBS, stating:

“Perhaps most significantly, UBS has a ‘rap sheet’ that cannot be ignored. Within the past six years, the department has resolved criminal investigations of UBS three times, resulting in non-prosecution or deferred prosecution agreements. UBS also has entered into civil and regulatory settlements on multiple occasions within the past few years.  Enough is enough.”

Enough is apparently not enough, however, when it comes to serial banking tyrants based in the U.S. Not only does Citigroup have a monster rap sheet that keeps growing, but it’s the bank that contributed significantly to the U.S. financial collapse in 2008 and received the largest taxpayer bailout in U.S. history: $45 billion in equity infusions, over $300 billion in asset guarantees, and over $2 trillion in low-cost loans from the Federal Reserve.

In last month’s Harper’s Magazine, Andrew Cockburn took an in-depth look at Citigroup’s history of hubris, including the crime supermarket that Sandy Weill created with the merger of Travelers Group and Citicorp to form Citigroup in 1998. Cockburn writes:

“Under Weill, however, the merged firm set new records for reckless gambles and fraud. It was Citigroup that helped to cook Enron’s books, disguising $4 billion worth of loans on the balance sheet as operating cash flow. Citigroup’s executives apparently understood what they were doing, but carried on regardless—the payoff being the $200 million in fees earned from the energy-trading firm before it collapsed amid bankruptcy and criminal charges. (As it turned out, crime did not pay, at least not for Citigroup’s stockholders, since the firm ended up shelling out $100 million in civil penalties to the SEC and $3.7 billion to settle claims by Enron investors.)

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