The activity is known as fraud, racketeering, usually reserved for the filth of organized crime but now embraced, infected by the toxic stink of Banks, financial institutions, our government, and our broken legal system.
These acts are serious violations of Federal criminal statutes know as RICO (Racketeer Influenced and Corrupt Organizations Act) and someone needs to go to jail.Those found guilty of racketeering can be sentenced to 20 years in prison per racketeering count.
Instead, it’s business as usual in the way that the media tip toes meekly about the highly significant corruption involved in the way the government treats large financial "Mafia" institutions.
Well, sniff, the executives whine, we merely play the game according to the rules we're given.Sure, and the Mafia plays its game strictly according to Hoyle.The difference is that the Mafia must actually break the rules, while Wall Street simply hires lobbyists and politicians to write the rules.
It has agreed to pay this fine to settle charges that it misled investors about a complex financial instrument tied to the now catastrophic housing market bubble.
The announcement by the SEC was unlikely to satisfy critics of Wall Street and Washington's bailout of banks who have waited years for any major Wall Street executive to be jailed for practices that led to the global financial meltdown.
The SEC alleged that Citigroup's main broker-dealer subsidiary duped investors who had bought portions of a $1 billion offshore deal known as a collateralized debt obligation. CDOs are bundles of bonds tied to the performance of mortgages and other loans. The deal in question was precisely the kind of engineered financial product that blew up in 2008 and nearly brought down the global financial system.
In the complaint, the SEC alleged that Citigroup Global Markets selected about $500 million worth of assets in the deal, but in marketing materials suggested to investors that Swiss bank Credit Suisse had conducted the selection.
That gave the appearance that it was an arms-length transaction. In reality, said the SEC, Citigroup's subsidiary selected the assets and then bet against the investors in the very product it was selling.
During a Wednesday news conference, the SEC director of the Commission undertaking the investigation, Robert Khuzami read from an email sent by a veteran CDO trader that referred to the Citigroup's deal as "the best short ever." In SEC documents, this same trader refers to the deal as "dog shit."
Somehow this deal still got a gold-plated AAA rating from both Moody's and Standard and Poor's, yet neither was charged in the Citigroup case or any other one.
Even though Citigroup designed the investment to fail, it told investors it had been designed by an independent manager, the SEC said. Citigroup's marketing materials said the investments were picked by Credit Suisse. In an email about the deal, one Citigroup banker asked another not to tell Credit Suisse that it was designed for Citigroup to profit. Credit Suisse "agreed to the terms even though they don't get to pick the assets," the email said, according to the SEC's complaint.
The short position taken by Citigroup helped it gain $126 million and around $34 million as marketing and transaction fees. The $285 million fine includes a $30 million in prejudgment interest, a $160 million disgorgement fees and also a $95 million penalty.
Citigroup has agreed to the settlement without accepting any wrong doing. Credit Suisse was fined $4 million for its involvement in the toxic mortgage assets case.
FOR THE LOVE OF MONEY
Are people really still confused as to what the Wall Street protests are about? This sort of "heads I win, tails you lose" behavior by Wall Street is what prompted last year's extensive revamp of financial regulation, known as the Dodd-Frank Act, which several GOP presidential candidates vow to repeal. It's also what has driven many Americans to support the Occupy Wall Street protest movement growing in cities across the nation.
Do you think Citigroup will change it's behavior or continue business as usual? Too big to fail, too big to arrest, too big to care.
Citigroup, Nice slogan: "How can we help you today, bend over".
Do you think Citigroup will change it's behavior or continue business as usual? Too big to fail, too big to arrest, too big to care.
Citigroup, Nice slogan: "How can we help you today, bend over".
In another statement on its website, Citigroup neither admitted nor denied guilt. Citigroup noted that "the S.E.C. did not charge it with “intentional or reckless misconduct. Rather, it settled charges that its actions were negligent and misleading to investors". Ohhhhhh, okay, then. They were ONLY negligent and ONLY misled investors, then, just pay a fine, no admission or denial of wrongdoing, that's the Wall Street way of doing things responsibly.
What a fiasco.They defrauded a billion and get a fine of 285 million? So they walk with a net GAIN of 715 Million.
"It's not called Occupy Wall Street because it's a random geographical location," said Bartlett Naylor, who heads financial policy for advocacy group Public Citizen, which wants criminal charges filed against Wall Street executives.
Citigroup had previously reached a $75 million settlement with the SEC in July 2010 for failing to adequately disclose how much risk it carried on junk mortgages. A federal judge first rejected that settlement as too light, before agreeing later to accept it.
SEC documents released Wednesday spell out how the Citigroup transaction, known as Class V Funding III, closed on Feb. 28, 2007, and that by November about 83 percent of the assets in the complex deal had defaulted. Citigroup still walked away with staggering profits.
Big bucks and minimal transparency characterize the world of structured finance, where Wall Street sliced and diced $2 trillion in loans into complex securities that eventually went bust. McClatchy Newspapers reported exclusively in 2009 on how Moody's Investors Service was also complicit by giving AAA ratings to junk bonds, and how Goldman Sachs secretly bet against its mortgage products while safely exiting a cresting housing market before its collapse.
In the most recent July-September 2011 fiscal quarter, Citigroup earned $3.8 billion. At the height of the financial crisis in 2008, regulators worried that Citigroup was on the brink of failure. It received $45 billion as part of the $700 billion government bailout. Its CEO Vikram Pandit this year was awarded a multi-year bonus package that could be worth nearly $23.4 million if performance goals are met.
Still unclear is the degree to which the SEC, with limited resources, is investigating an estimated $1.3 trillion in complex Cayman deals by major U.S. banks in which investors, often foreign banks, absorbed huge losses, mostly on risky mortgage securities.
The Banking Industry is subject to certain standards of conduct under the license charters issued to them. In theory, pleading no contest to fraud in this case should be grounds for pulling their license, because in theory, with this on their record they would not be given a license. In this SEC case Citigroup is effectively “let off the hook” simply by paying a fine they can easily afford.
The top 1 percent or multi-national corporations rarely face criminal penalties for these acts. Being well entrenched and lining the pockets of both political parties they only face civil penalties or judgments. Jail time, forget it, that's only for regular people like you and me. Just imagine engaging in this kind of business practice either as an individual or a small business. We would be sitting in prison as punishment and "justice served".
This justice served concept is a thing you all know I have a very difficult time believing in as a concept. Basically it is bull shit, and justice served is a lie that usually is not afforded to innocent victims, but owned by the elite powers of our country.
Justice is a great sounding patriotic idea that has been prostituted to the point of those who can afford to pay for it and political speeches filled with endless lies. Justice does not exist, it is a fable, made up to keep the naive public, believers in that we live in a Country of equality for all.
So, I don't get it, well actually I do. Citigroup committed fraud, literally robbed money from people and gets a fine as their penalty. How about the people that were ripped off, right down to the home owners that ended up losing their homes to foreclosures, or life savings stolen, because of Citigroups actions.
Meanwhile, not so strangely, thousands of lawful "Occupy" peaceful protesters on Wall St., Chicago, LA, SFO, etc. have been arrested and gone to jail for simply pointing out the behavior of Citigroup (and others), "loitering", lying down in a park.
This despite the Freedom of Speech and Assembly in the first of amendments of the U.S. Constitution which promises that United States Citizens have the freedom of speech which includes gestures, freedom in the press, and other forms of expression. The first amendment also allows citizens to peacefully congregate and assemble to petition the government for grievances or any problems that they would like to have resolved.
Let's not forget the Constitutions fourth Amendment which gives every American citizen Protection from unreasonable search and seizure- The fourth amendment also gives citizens the right to privacy. This amendment makes it illegal for government officials to search and seize any property such as houses, anything on a person, papers, and affects without proper cause, which has been affirmed by a judge.
You get arrested, searched, thrown to the ground, cuffed, booked, fingerprinted, DNA samples taken, and treated as if YOU are the criminal for lawfully exercising your rights as a citizen. Each of those arrested can now worry their name will find its way onto the federal Terrorist Watch List, since the government considers lawful protest a form of terrorism.
Sort of back ass wards here, who did these people harm, who did they steal from, whose lives did they ruin?
Actually it is designed by those friendly leaders in power, our politicians serving their masters. It's part of class warfare conducted by the rich who fear the rest of us. Not only do such illegal arrests chill free speech, but they also invade the privacy of citizens engaged in free speech and assembly.
On Saturday, the Alliance for a Greater New York and Occupy Wall Street teamed up to launch occupytheboardroom.org, a website that lists the names of 200 top executives and board members from Bank of America Corp., Citigroup, Goldman Sachs Group, JP Morgan Chase, Morgan Stanley and Wells Fargo. “Just got evicted while your banker gets bonuses?” the site asks. “Share your special story with someone who ought to know.”
Occupy the Boardroom encourages users to click on the bankers' names and send them personal letters, which are collated on the site. By Tuesday afternoon, the project had already been tweeted nearly 3,000 times and shared on more than 8,000 Facebook pages. More than 88,000 page views from 161 countries had been tallied, and more than 5,000 letters had been submitted.
Saying that such-and-such is the greediest bunch of bankers on Wall Street doesn't mean much since the competition is fierce for the top slimiest scumbag of the bunch.
Bad management at a bank magically doesn't work the same as it does for the rest of working class Americans. It seems to have no repercussions except enormous payouts. Just ask recently booted Bank of America executives Sallie Krawcheck and Joseph Price. The bank gave Krawcheck a severance package that includes a year's salary of $850,000 plus a payment of $5,150,000. Price got $850,000 and a payment of $4,150,000.
BOFA CEO Brian Moynihan took over from Ken Lewis, an exceptionally crappy bank manager who exited the door with $125 million in his pocket. Moynihan has been defending his bank's debit card decision and making a lot of noise about his loyalty to shareholders and customers and his bank's "right to make a profit".
Former bank regulator Bill Black isn't feeling sympathetic, though, crisply observing that "it was Moynihan's incompetence and moral blindness that allowed BOFA to commit tens of thousands of felonies in the course of foreclosing through perjury on those who were often the victims of Countrywide's underlying fraudulent mortgages. CEO Moynihan collects a $2 million annual salary as a base salary before his perks, incentives are added.
Banking is not really a competitive industry. In reality, it's more like an oligopoly, an industry controlled by a small number of firms. An oligopoly is a lot like a monopoly, where one firm controls the whole show. Only in an oligopoly, you have two or more firms calling the shots, and they love to do things contrary to the notion of a free market, such as colluding to raise prices. There are a few common signs that tell you when competition has left the building in a given industry.
The last time big banks blew up the economy, causing the Great Depression, they got broken up. Tight regulation protected small banks, so they could get in on the action. But a massive trend of consolidation in the industry starting in the mid-'80s shrank the total number of banks in the United States as bigger banks gobbled up little ones. Result?
The biggest banks control a larger and larger share of deposits. Concentration of deposits is one measure, the best measure is probably that of competition in the banking industry. The number of depository organizations in the U.S. fell from 15,416 in 1984 to 8,191 in 2001, a drop of 46.9 percent. The share of deposits held by the biggest five banks swelled to 23 percent in 2001 from just 9 percent in 1984. Sound like a competition-driving trend to you?
If you think 23 percent is a big piece of the pie: In June 2008, before the Lehman collapse, the share of deposits held by the five biggest banks had soared to 37 percent. And the figure has only risen since then. By 2009, the top five banks (Bank of America, JPMorgan Chase, Citigroup, Wells Fargo and PNC) boasted nearly 40 percent of all deposits. They got all these deposits not because they did a great job and offered amazing service (BOFA is notorious for low deposit rates, and nickel and dime fees such as asking for your current balance in an account), but because they ate up smaller banks.
This increasing concentration of deposits suggests that banks have been getting steadily less competitive over the last 30 years. Which allows nasty things to happen.
For example, when Bank of America decided to charge customers for using a debit card, an activity that actually saves them money on processing checks, they performed a maneuver common in oligopolies, known as "price leadership."
In this form of tacit collusion, the lead dog in the industry announces a price increase, signaling to the other big dogs that it's cool for them to do the same. In this case, if the other dogs don't place fees on debit cards, they'll find another way to get the dough so that they keep pace with the leader.
In the last couple of weeks,as though by an invisible hand, you may have received a letter from your bank noting some "changes." Maybe there's new, higher fees or credit cards rewards that have been diluted. Your checking account might no longer be free. These "changes" mean only one thing: price hikes for you the customer.
What can you do about all of this? Many join the Occupy protests, you don't have to physically attend protests, donate money to it, support it through publicizing it to as many people as possible, take your money out of the biggest banks that caused the financial crisis that are still harming the economy by not lending, doling out huge bonuses, and screwing customers.
Find a credit union or small bank, if for no other reason than to give your support to local businesses and to invest in Main Street. You might even end up with fewer fees. The Move Your Money campaign, offers guidance in picking an institution that's safe.
The flags above are no longer separate in what they stand for. Dropping of pretenses is a ritual that all societies that have fallen into decay and tyranny go through. When those who have subverted their political system feel that their hold on power is strong enough to withstand any and all challenges, they go through this stage where all pretenses of upholding laws and government serving the people are dropped. It can happen in a short time or slowly over time. It's happening now to us and its time to put up or shut up.
Take this as a sign that those who are pulling off these crimes against the People and Their Nation feel that they have accumulated such a degree of permanent power that they can no longer be held accountable, even when everybody and their mother knows exactly what they are doing.
In a sane system, there would have been court issued restraining orders and massive involvement/intervention from the federal government long before now and it hasn't happened.
We live in a systemically corrupt, insane system if you simply open your eyes, smell the rot, and hear the truth, it cannot be denied any longer. That says nothing at all good about the road down to the steep cliff which we are all currently traveling on.
We live in a systemically corrupt, insane system if you simply open your eyes, smell the rot, and hear the truth, it cannot be denied any longer. That says nothing at all good about the road down to the steep cliff which we are all currently traveling on.
In a statement on its website, Citi Bank stated "We are pleased to put this matter behind us and are focused on contributing to the economic recovery, serving our clients and growing responsibly".
That's the sweet truth, they should be extremely pleased! The Government gives them twenty times that amount in free 'stimulus' money, and all they have to give back is a few million. Not bad for a day's scam. Way to go Government, you really showed 'em on this one.