Elizabeth Warren asks why criminal bankers are too big to jail

There were 800 convictions in the S&L crisis, but the DOJ hasn't prosecuted a single banker involved in the financial crisis; as Matt Taibbi points out in the brilliant, essential book The Divide, if shutting down a huge bank would impose too many costs on society, then why don't prosecutors insist that the banks be split up as a condition of not dropping the entire C-suite into the deepest dungeon in the nation?

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Goldman Sachs demands that Google "unsend" a fatfingered email to avoid "reputational damage"

Someone at Goldman Sachs fatfingered an email and sent confidential data out to the wrong person.

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Obama's top Trans-Pacific Partnership officials were given millions by banks before taking the job


The top Obama administration officials working on the Trans-Pacific Partnership came to government from investment banks who will benefit immensely from its provisions, which severely curtail countries' ability to pass laws regulating banks and other corporations. These top advisors, who came from Bank of America and Citigroup, were given multimillion-dollar exit bonuses when they left their employers for government. For example, the US Trade Representative, Michael Froman, was handed $4M from Citigroup as a goodbye gift on his way into his new job.

This is standard operating procedure for America's financial industry, where the largest players all have contracts guaranteeing millions to employees who leave the firm for government jobs.

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Report from a meeting of Wall Street's secret, tasteless plutocrats' club


In the process of writing his just-released book Young Money, an investigative look at the bankers who've joined Wall Street since the crash of 2008, author Kevin Roose snuck into a meeting of the secretive Kappa Beta Phi club -- an organization of hyper-rich Wall Street bankers.

Roose recorded the captains of of industry, whose shady dealing had crashed the world economy and plunged millions into untold misery, cavorting on stage, making jokes about poor people and Hillary Clinton, dressing up in drag, and singing an anthem about how much bailout money they'd suckered out of the feds, to the tune of Dixie: "In Wall Street land we’ll take our stand, said Morgan and Goldman. But first we better get some loans, so quick, get to the Fed, man."

New York Magazine has a membership roll of the Kappa Beta Phis, which is a who's who of the richest, most powerful men on Wall Street.

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The UK Gold: riveting documentary on the deep, ingrained corruption of the UK's banking centre, the City of London

Jeff writes, "Featuring a brand new soundtrack from Radiohead's Thom Yorke, Massive Attack and Elbow, and narrated by Dominic West (The Wire), journalist Marke Donne has put together a riveting documentary exposing the tax avoidance 'industry' operated by the highly secretive, centuries old institution, The City of London.

With a permanent office in Parliament, a budget of $1.2 billion and the media-avoiding tactics of the super-rich, the City relies on lobbying and silence to carry out it's offshore tax avoidance, robbing the state of tens of billions in revenue every year."

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HSBC settlement approved: no criminal charges, 5 weeks' profit in fines, deferred bonuses for laundering billions for narco-terrorists


Remember when HSBC got caught laundering billions for Mexican narco-terror cartels? Remember how they offered to pay five weeks' profits in fines and to defer their executive bonuses to escape criminal charges?

The crime-fighting legal eagles at the Department of Justice approved the settlement last week. Remember, though, if you are suspected of laundering money or selling drugs, the DoJ will take your house away and put you in jail for the rest of your life. Nice to be "too big to jail." Still, deferring multimillion-dollar bonuses has gotta hurt, huh?

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Replace bank chiefs with small dogs: Chinese top economist


China's former chief economist has excoriated the nation's banking system, which charges high fees and maintains a greedy-large gap between its deposit interest and lending interest rates.

Such a business provides no value, and is merely parasitic on the people: "With this kind of operational model, banks will continue making money even if all the bank presidents go home to sleep and you replaced them by putting a small dog in their seats."

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JP Morgan's "Twitter takeover" seeks questions from Twitter, gets flooded with critiques of banksterism #AskJPM

When JP Morgan's Twitter account announced last month that "VC Jimmy Lee" take questions from the net with the #AskJPM hashtag, they should have been able to predict what was coming next: a stream of hilarious, vicious critiques of late-stage capitalism, banksterism, and financial corruption. One day later, the Q&A was cancelled. The astonishing thing isn't how predictable this was, but how anyone at JP Morgan failed to see it coming -- the greatest irony isn't the questions raised, it was the hubris in thinking that these questions wouldn't be raised at all.

The fiasco is being called one of the worst social media disasters in corporate history, and has spawned lots of creativity, including this video of Stacy Keach and a sock puppet performing the tweets and a Matt Taibbi-sponsored haiku contest.

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After the Meltdown: tracking the fortunes reaped by the bankers who tanked the economy

The Center for Public Integrity's After the Meltdown series documents the fate of the regulators, executives, and firms that were most directly responsible for the subprime meltdown, and demonstrates that the top bankers for firms like Lehman got unbelievably rich due to their failures, and are still in business with lucrative consulting firms (for example, Lehman CEO Richard Fuld walked away with several hundred million in cash and now has homes in three states and a personal consulting outfit). Consumerist's Chris Morran has done a great job of summarizing the findings:

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Unsealed court-settlement documents reveal banks stole $trillions' worth of houses


Back in 2012, the major US banks settled a federal mortgage-fraud lawsuit for $95,000,000. The suit was filed by Lynn Szymoniak, a white-collar fraud specialist, whose own house had been fraudulently foreclosed-upon. When the feds settled with the banks, the evidence detailing the scope of their fraud was sealed, but as of last week, those docs are unsealed, and Szymoniak is shouting them from the hills. The banks precipitated the subprime crash by "securitizing" mortgages -- turning mortgages into bonds that could be sold to people looking for investment income -- and the securitization process involved transferring title for homes several times over. This title-transfer has a formal legal procedure, and in the absence of that procedure, no sale had taken place. See where this is going?

The banks screwed up the title transfers. A lot. They sold bonds backed by houses they didn't own. When it came time to foreclose on those homes, they realized that they didn't actually own them, and so they committed felony after felony, forging the necessary documentation. They stole houses, by the neighborhood-load, and got away with it. The $1B settlement sounded like a big deal, back when the evidence was sealed. Now that Szymoniak's gotten it into the public eye, it's clear that $1B was a tiny slap on the wrist: the banks stole trillions of dollars' worth of houses from you and people like you, paid less than one percent in fines, and got to keep the homes.

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Bank forecloses on wrong house, changes locks, steals tons of stuff, won't compensate owner in full


On Popehat, Ken details the astounding story of Katie Barnett, whose home was burglarized by agents of the First National Bank of Wellston, Ohio, who mistook her house for one that they were foreclosing upon. The bank broke into her house, changed the locks, and got rid of many of Barnett's possessions.

The local police refuse to get involved, and the bank's CEO, Anthony S. Thorne, is refusing to reimburse her in full for her possessions, which were stolen and destroyed by his company. Thorne says that because Barnett can't produce receipts for all of her goods (because who does that?) (and also, even if she had, they'd have been in her burglarized house), and because her recollection of her stuff doesn't match the "inventory" of the bungling bank employees who stole everything she owned, he will not pay her full compensation.

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Too-big-to-fail banks implicated in $500 trillion fraud: biggest price-rigging scandal in history

In Rolling Stone, the amazing Matt Taibbi documents a breaking price-rigging scandal involving the world's biggest banks. The $500 trillion conspiracy to game the interest-rate swaps victimizes every city, town, state and nation that uses bonds to raise money, diverting an unimaginable sum from tax coffers to the pockets of mega-rich bankers. If you've been staring around at the empty storefronts, closed libraries and schools, homeless and breadlines since 2008 and wondering "Where did all the money go?" then wonder no longer.

Though interest-rate swaps are not widely understood outside the finance world, the root concept actually isn't that hard. If you can imagine taking out a variable-rate mortgage and then paying a bank to make your loan payments fixed, you've got the basic idea of an interest-rate swap.

In practice, it might be a country like Greece or a regional government like Jefferson County, Alabama, that borrows money at a variable rate of interest, then later goes to a bank to "swap" that loan to a more predictable fixed rate. In its simplest form, the customer in a swap deal is usually paying a premium for the safety and security of fixed interest rates, while the firm selling the swap is usually betting that it knows more about future movements in interest rates than its customers.

Prices for interest-rate swaps are often based on ISDAfix, which, like Libor, is yet another of these privately calculated benchmarks. ISDAfix's U.S. dollar rates are published every day, at 11:30 a.m. and 3:30 p.m., after a gang of the same usual-suspect megabanks (Bank of America, RBS, Deutsche, JPMorgan Chase, Barclays, etc.) submits information about bids and offers for swaps.

And here's what we know so far: The CFTC has sent subpoenas to ICAP and to as many as 15 of those member banks, and plans to interview about a dozen ICAP employees from the company's office in Jersey City, New Jersey. Moreover, the International Swaps and Derivatives Association, or ISDA, which works together with ICAP (for U.S. dollar transactions) and Thomson Reuters to compute the ISDAfix benchmark, has hired the consulting firm Oliver Wyman to review the process by which ISDAfix is calculated. Oliver Wyman is the same company that the British Bankers' Association hired to review the Libor submission process after that scandal broke last year. The upshot of all of this is that it looks very much like ISDAfix could be Libor all over again.

"It's obviously reminiscent of the Libor manipulation issue," Darrell Duffie, a finance professor at Stanford University, told reporters. "People may have been naive that simply reporting these rates was enough to avoid manipulation."

And just like in Libor, the potential losers in an interest-rate-swap manipulation scandal would be the same sad-sack collection of cities, towns, companies and other nonbank entities that have no way of knowing if they're paying the real price for swaps or a price being manipulated by bank insiders for profit. Moreover, ISDAfix is not only used to calculate prices for interest-rate swaps, it's also used to set values for about $550 billion worth of bonds tied to commercial real estate, and also affects the payouts on some state-pension annuities.

So although it's not quite as widespread as Libor, ISDAfix is sufficiently power-jammed into the world financial infrastructure that any manipulation of the rate would be catastrophic – and a huge class of victims that could include everyone from state pensioners to big cities to wealthy investors in structured notes would have no idea they were being robbed.

Everything Is Rigged: The Biggest Price-Fixing Scandal Ever (Thanks, Elix!)

Wells Fargo mistakenly forecloses on the wrong house, destroys elderly couple's entire lifetime's worth of possessions

Wells Fargo mistakenly foreclosed on a home that had no mortgage, sending in a crew to steal all and throw out all the elderly homeowners' belongings. Alvin Tjosaas helped his father build the family home in Twentynine Palms, CA when he was a teenager, and the couple raised their own children there. The Wells Fargo crew destroyed their entire lives' accumulation of personal possessions. Wells Fargo says it is "deeply sorry" and that it is "moving quickly to reach out to the family to resolve this unfortunate situation in an attempt to right this wrong."

More from CBSLA:

Alvin, a retired mason, built the home with his father when he was a teenager.

“I know every inch, every rock…my mom mixed all the cement by hand,” he said...

“My little kids (would) come out here and their dresses were the same color as the wildflowers,” said Alvin...

“When you put your heart into something…it makes me real sad. I’m just glad I have my sweetheart. We’ve been together a long time,” said Alvin.

Owners Lose Possessions After Home Near Twentynine Palms Is Mistakenly Foreclosed (via Reddit)

Put bankers in jail

Joseph Stiglitz -- former World Bank economist and Nobel economics laureate -- has a suggestion for dealing with the Barclay's bank scandals and those that follow: put bankers in jail. Cory

Wall Street, like the mafia, but more ambitious

In Rolling Stone, Matt Taibbi is his usual incandescent self in reporting on the United States of America v. Carollo, Goldberg and Grimm, a bid-rigging trial against brokers at GE Capital, which implicated virtually every bank on Wall Street (and many overseas banks) in a multibillion-dollar municipal bond bid-rigging fraud, a fraud that skimmed a piece of every substantial municipal project in America, from public pools and baseball diamonds to subway stations and housing projects. Bid-rigging, a process perfected by the mafia, has been practiced by the financial sector on a scale never dreamed of by the simple men of the crime syndicates, and the scam is starting to unravel.

The defendants in the case – Dominick Carollo, Steven Goldberg and Peter Grimm – worked for GE Capital, the finance arm of General Electric. Along with virtually every major bank and finance company on Wall Street – not just GE, but J.P. Morgan Chase, Bank of America, UBS, Lehman Brothers, Bear Stearns, Wachovia and more – these three Wall Street wiseguys spent the past decade taking part in a breathtakingly broad scheme to skim billions of dollars from the coffers of cities and small towns across America. The banks achieved this gigantic rip-off by secretly colluding to rig the public bids on municipal bonds, a business worth $3.7 trillion. By conspiring to lower the interest rates that towns earn on these investments, the banks systematically stole from schools, hospitals, libraries and nursing homes – from "virtually every state, district and territory in the United States," according to one settlement. And they did it so cleverly that the victims never even knew they were being ­cheated. No thumbs were broken, and nobody ended up in a landfill in New Jersey, but money disappeared, lots and lots of it, and its manner of disappearance had a familiar name: organized crime.

In fact, stripped of all the camouflaging financial verbiage, the crimes the defendants and their co-conspirators committed were virtually indistinguishable from the kind of thuggery practiced for decades by the Mafia, which has long made manipulation of public bids for things like garbage collection and construction contracts a cornerstone of its business. What's more, in the manner of old mob trials, Wall Street's secret machinations were revealed during the Carollo trial through crackling wiretap recordings and the lurid testimony of cooperating witnesses, who came into court with bowed heads, pointing fingers at their accomplices. The new-age gangsters even invented an elaborate code to hide their crimes. Like Elizabethan highway robbers who spoke in thieves' cant, or Italian mobsters who talked about "getting a button man to clip the capo," on tape after tape these Wall Street crooks coughed up phrases like "pull a nickel out" or "get to the right level" or "you're hanging out there" – all code words used to manipulate the interest rates on municipal bonds. The only thing that made this trial different from a typical mob trial was the scale of the crime.

USA v. Carollo involved classic cartel activity: not just one corrupt bank, but many, all acting in careful concert against the public interest. In the years since the economic crash of 2008, we've seen numerous hints that such orchestrated corruption exists. The collapses of Bear Stearns and Lehman Brothers, for instance, both pointed to coordi­nated attacks by powerful banks and hedge funds determined to speed the demise of those firms. In the bankruptcy of Jefferson County, Alabama, we learned that Goldman Sachs accepted a $3 million bribe from J.P. Morgan Chase to permit Chase to serve as the sole provider of toxic swap deals to the rubes running metropolitan Birmingham – "an open-and-shut case of anti-competitive behavior," as one former regulator described it.

The Scam Wall Street Learned From the Mafia (via Naked Capitalism)