Daily Archives: August 23, 2015

Private Prison Firms Buy Access to Public Officials at Lavish Industry Conferences

The prison industry in the United States has grown so large that there are no less than seven professional associations for people who work at prisons and jails. The industry conferences held by these associations provide a perfect venue for private corrections companies to influence government officials with little public oversight, according to a recent report by the watchdog group In The Public Interest (ITPI).

The biggest names in the prison business spend millions of dollars sponsoring these conferences and wooing prison officials with free massages, awards ceremonies, luxury dinner cruises and plenty of corporate schwag. Over the past week, one of the most prominent associations, the American Correctional Association (ACA), held its summer conference in Indianapolis, where major sponsors included private prison companies Corrections Corporation of America (CCA), GEO Group and food services giant Aramark.

The ACA boasts that its “Congress of Corrections” offers “multiple ways to network with industry professionals, find a mentor, get a sneak peek at emerging technology, and hone your leadership skills.” At last summer’s ACA conference, CCA sent nearly 70 of its own employees, according to ITPI.

Read on.

Deutsche Bank Said to Probe Senior Russia Employee Over Bribes

Deutsche Bank AG’s internal probe into possible money laundering at its Russian unit has sparked an investigation into whether a senior employee took bribes, people with knowledge of the situation said.

The bribery investigation is in its early stages, the people said, requesting anonymity because the matter is private. Unexplained funds were discovered in accounts controlled by the employee and the employee’s spouse, the people said. The people didn’t identify the employee.

Deutsche Bank has now broadened its own probe to examine trading activities with 10 to 12 mainly Russian broker counterparties, the people said.

Read on.

‘Shame campaign’ to target banks that drag out foreclosures

A “shame campaign” intended to prod banks into quicker resolutions on foreclosed homes was launched Friday in Buffalo’s Old First Ward.

Elected officials and community activists gathered outside 20 Sidway St., which has been vacant since its owner died in 2007. Foreclosure proceedings were initiated in 2010, then the judgment was vacated and the process started all over again, according to community activists.

A sign imploring Bank of America to “be a good neighbor” and “complete the foreclosure process” was stuck in the front lawn, which appeared to have been recently cut. But the lawn and the front steps were littered with debris.

“We are starting a shame campaign … to hold the banks accountable,” said Assemblyman Michael P. Kearns, D-Buffalo.

Pickets and boycotts against banks also are planned, he said, as efforts continue at the state level to pass legislation requiring banks to contact municipalities and neighbors when foreclosure proceedings commence.

Read on.

Homeowners’ fight against foreclosure ends with $264K bill

The New York family that in 2009 became the national face of beating back “repugnant” and “repulsive” bank foreclosure practices after a judge ripped up the mortgage on their $525,000 ranch home, not only lost an appeal of the judge’s order — and eventually their home — but were also slapped with a $264,500 bill from the bank.

The bill was to cover the difference between what was owed on the mortgage and what the bank got when it sold their 3,400 square-foot home, court records show.

“That’s adding insult to injury,” Suffolk Judge Jeffrey Spinner said of the quarter-million-dollar-plus deficiency judgment.

Spinner, the judge who tossed Diana Yano-Horoski and Gregory Horoski’s $292,500 mortgage, with an interest rate of 12.375 percent, told The Post that in more than 17 years on the bench and thousands of cases, he has had only three requests for deficiency judgments.

And all three, he said, were on commercial mortgages with deep-pocketed borrowers.

Read on.

Wells Fargo Tops ‘Use Of A Work Email On An Adultery Site’ League Tables

All work no play makes Jack a dull person. lol!

While JP Morgan and Capital One bring up the rear, which should be a source of pride for both banks: the vast majority of their employees understand what is and is not an appropriate use of corporate email.

Hundreds of bankers used their work emails to register for the adultery website AshleyMadison.com, MarketWatch found after searching the data…Here are the financial institutions we searched for, and how many associated email addresses we found — bearing in mind that we cannot verify the accuracy of the data.

Wells Fargo — @wellsfargo.com: 175

Read on.

Group of Thirty Calls for Fully Comprehensive Cultural and Conduct Reforms at Major Global Banks

Chairman Emeritus, Paul A. Volcker

Contact: Stuart P.M. Mackintosh

Chairman of the Board of Trustees, Jacob A. Frenkel

+1 202 331 2472

Chairman of the Group of Thirty, Jean-Claude Trichet mackintoshs@group30.org http://www.group30.org

Press Release Group of Thirty Calls for Fully Comprehensive Cultural and Conduct Reforms at Major Global Banks

New York, July 30, 2015: – Despite progress being made in strengthening their cultures, a number of the world’s largest banks are still failing to implement needed cultural and conduct reforms in their businesses, states the Group of Thirty (G30) today.

The Group of Thirty, a forum of leaders in international finance, called today for far-reaching banking reforms to restore public trust. It said many banks still need to implement reforms to address the ways bankers are paid, dismissal if necessary of bankers, including top executives, new approaches to hiring, and stronger roles by boards of directors to ensure cultural and conduct changes.

The report, Banking Conduct and Culture: A Call for Sustained and Comprehensive Reform, states failure by banks to move ahead across-the-board cultural and conduct reforms could lead to still more regulatory rules and actions.

Mr. Jean-Claude Trichet, G30 Chairman and former President of the European Central Bank, said, “Restoring trust in banking is a public duty and economic imperative. Restoring public confidence needs to be a top priority for major banks and is long overdue. Piecemeal approaches are not good enough. Aspirational leadership statements by bankers must be matched by effective and disciplined implementation programs. Today, we are proposing comprehensive reforms in the approaches to bank culture and conduct that are both essential and urgent.”

Mr. Trichet added, “We know that there continue to be investigations of alleged wrong-doing by banks and that the pressures on official authorities to introduce new regulations will rise. Banks need to demonstrate the capacity to reform themselves.”

Read on.

Introducing The Gigantic And Dangerous Wall Street Loophole You’ve Never Heard Of

“Greed is good.”  —  Gordon Gekko

From Reuters:

NEW YORK – This spring, traders and analysts working deep in the global swaps markets began picking up peculiar readings: Hundreds of billions of dollars of trades by U.S. banks had seemingly vanished.

“We saw strange things in the data,” said Chris Barnes, a former swaps trader now with ClarusFT, a London-based data firm.

The vanishing of the trades was little noted outside a circle of specialists. But the implications were big. The missing transactions reflected an effort by some of the largest U.S. banks — including Goldman Sachs, JP Morgan Chase, Citigroup, Bank of America, and Morgan Stanley — to get around new regulations on derivatives enacted in the wake of the financial crisis, say current and former financial regulators.

The trades hadn’t really disappeared. Instead, the major banks had tweaked a few key words in swaps contracts and shifted some other  trades to affiliates in London, where regulations are far more lenient. Those affiliates remain largely outside the jurisdiction of U.S. regulators, thanks to a loophole in swaps rules that banks successfully won from the Commodity Futures Trading Commission in 2013.

For large investors, the products are an important tool to hedge risk. But in times of crisis, they can turn toxic. In 2008, some of these instruments helped topple major financial institutions, crashing the U.S. economy and leading to government bailouts.

After the crisis, Congress and regulators sought to rein in this risk, and the banks fought back. From 2010 to 2013, when the CFTC was drafting new rules, representatives of the five largest U.S. banks met with the regulator more than 300 times, according to CFTC records. Goldman Sachs attended at least 160 of those meetings.

Many of the CFTC employees who were lobbied in these meetings went on to work for banks. Between 2010 and 2013, there were 50 CFTC staffers who met with the top five U.S. banks 10 or more times. Of those 50 staffers, at least 25 now work for the big five or other top swaps-dealing banks, or for law firms and lobbyists representing these banks.

The lobbying blitz helped win a ruling from the CFTC that left U.S. banks’ overseas operations largely outside the jurisdiction of U.S. regulators. After that rule passed, U.S. banks simply shipped more trades overseas. By December of 2014, certain U.S. swaps markets had seen 95 percent of their trading volume disappear in less than two years.

While many swaps trades are now booked abroad, some people in the markets believe the risk remains firmly on U.S. shores. They say the big American banks are still on the hook for swaps they’re parking offshore with subsidiaries.

Still, the banks’ victory on the swaps loophole leaves a concentrated knot of risk at the heart of the financial system. The U.S. derivatives market has shrunk but remains large, with outstanding contracts worth $220 trillion at face value. And the top five top banks account for 92 percent of that.

In 2009, President Barack Obama tapped Gary Gensler, then 51 years old, to chair the CFTC. Liberals grumbled about Gensler’s résumé. The son of a cigarette and pinball-machine salesman in working class Baltimore, Gensler, at 30, had become the youngest banker ever to make partner at Goldman Sachs.

Among other jobs, he oversaw the bank’s derivatives trading in Asia. Later, as an undersecretary of the Treasury, Gensler helped push through the 2000 law that had banned regulation of derivatives markets.

Kenneth Raisler, a former Enron lobbyist representing JP Morgan, Citigroup, and Bank of America, argued in a letter that the CFTC should allow U.S. banks to do things overseas “even if those activities were not permissible for a U.S. bank domestically.”

revolving door CFTC