Executive orders set to be issued on Friday would direct regulatory agencies to review new rules adopted under the Dodd-Frank Act, a sweeping reform of the financial sector that was passed after the Great Recession. The orders would also repeal a Department of Labor rule that requires retirement advisers to operate solely in the best interests of their clients.
“Americans are going to have better choices and Americans are going to have better products because we’re not going to burden the banks with literally hundreds of billions of dollars of regulatory costs every year,” Cohn, the former chief operating officer of Goldman Sachs, told the Wall Street Journal on Friday. “The banks are going to be able to price product more efficiently and more effectively to consumers.”
Cohn left Goldman for the White House last month, cashing in on bonuses and stock options worth hundred of millions of dollars. He’s among three alumni from the iconic Wall Street firm (the others are Treasury nominee Steve Mnuchin and Steve Bannon as chief White House strategist) to be serving in this administration, a sharp departure from a campaign in which the president criticized financial elites.
There's a standard story in most bank scandals, in which small groups of highly paid traders gleefully and ungrammatically conspire to rip-off customers and make a lot of money for themselves and their bank. This isn't that. This looks more like a vast uprising of low-paid and ill-treated Wells Fargo employees against their bosses.
Criticism of US government leniency on Wall Street legal transgressions is now being covered widely - even by trade publications such as the National Mortgage Professional Magazine. On January 18, the trade publication ran an article about Sen. Elizabeth Warren (D-Massachusetts) condemning the most recent US government settlement with a "too-big-to-fail" financial firm, in this case Goldman Sachs, for illegal abuse of the mortgage market:
Sen. Warren used her Facebook page to denounce the agreement, noting that the settlement sum was “barely a fraction of the billions investors lost” while arguing that Goldman Sachs was not properly penalized for its actions.
“That’s not justice – it’s a white flag of surrender,” she wrote. “It’s time to end this farce. These companies think they’re above the law – and too many government officials go along with them. A first step would be to pass the bipartisan Truth in Settlements Act to shine more light on these backroom deals. A second step would be to get government officials who have the backbone to fight back.”
Warren’s comments were echoed by the nonprofit U.S. Public Interest Research Group (U.S. PIRG).
The publication, which is geared toward professionals in the mortgage industry, also tellingly noted, "In announcing thesettlement, Goldman Sachs made no admission of guilt or error, and no executive from the New York-based financial giant will face criminal or civil charges."
As we have noted in this space many times, the seemingly large financial penalties levied on Wall Street firms for illegal activity are not so large, in the context of those firms' budgets: The fines are generally less than the revenue that the firms generated by engaging in the often fraudulent practices in the first place. As The Huffington Post noted in a report on the recent settlement,
About $2.4 billion of the settlement is in the form of a government penalty. The bank has said that it securitized about $125 billion of home loans between 2005 and 2008, of which about $23 billion eventually soured. The penalty represents about 10 percent of investors’ losses.
Goldman can deduct the rest of the settlement, about $2.7 billion, from its future tax bills, according to a person familiar with the accord. The bank said the settlement will reduce its fourth-quarter profit by about $1.5 billion. It reports earnings next week.
Goldman Sachs is being let off the hook for 90 percent of the investor losses for which it was primarily responsible. Furthermore, as is consistent with past settlements with Wall Street firms by the Department of Justice and other executive agencies, much of the fine is tax-deductible. As BuzzFlash has noted before, this rewards Wall Street financial companies by allowing them to factor in settlements with the government for illegal behavior as nothing more than the cost of doing business.
Former Attorney General Eric Holder, who left office last year to resume a six-figure-salary partnership at the DC corporate law firm of Covington & Burling (which defends many of the firms that Holder was responsible for prosecuting as attorney general), infamously stated to a US Senate committee in March of 2013:
I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if we do prosecute - if we do bring a criminal charge - it will have a negative impact on the national economy, perhaps even the world economy.
Apparently, under current Attorney General Loretta Lynch, that legal exemption for too-big-to-fail financial firms and their executives has not changed.
Jamie Dimon, the boss of JP Morgan, America’s biggest bank, has joined the ranks of the world’s billionaires – a status more often reserved for hedge fund managers, entrepreneurs and scions of already mega-wealthy families.
The banker has amassed his personal wealth – estimated at $1.1bn according to the Bloomberg billionaires index – even though JP Morgan has been issued with fines of almost $40bn (£26bn) since the 2008 financial crisis – and all of them on Dimon’s watch.
The 59-year-old has been in charge of the bank since 2005 and according to Bloomberg his stake in the company is valued at $485m.
He is the only boss of a major bank to have retained his job since the start of the crisis. As a result he is one of the most recognisable figures in the financial industry, and he has not been afraid of causing controversy. Dimon has described rules introduced since the crisis as “anti-American” and in January said banks were “under assault” as JP Morgan took another billion-dollar hit to cover its legal bills. (...)
The documents, obtained by the International Consortium of Investigative Journalists via the French newspaper Le Monde, show the bank’s dealings with clients engaged in a spectrum of illegal behavior, especially in hiding hundreds of millions of dollars from tax authorities. They also show private records of famed soccer and tennis players, cyclists, rock stars, Hollywood actors, royalty, politicians, corporate executives and old-wealth families.
Banking giant HSBC helped wealthy clients across the world evade hundreds of millions of pounds worth of tax, the BBC has learned.
Panorama has seen accounts from 106,000 clients in 203 countries, leaked by whistleblower Herve Falciani in 2007.
The documents include details of almost 7,000 clients based in the UK.
HSBC admitted that it was "accountable for past control failures." But it said it has now "fundamentally changed".
"We acknowledge that the compliance culture and standards of due diligence in HSBC's Swiss private bank, as well as the industry in general, were significantly lower than they are today," it added.
The bank now faces criminal investigations in the US, France, Belgium and Argentina, but not in the UK, where HSBC is based.
(...)
But Panorama has spoken to a whistleblower who said there were still problems with tax dodging at HSBC private bank when she worked there in 2013.
Sue Shelley was the private bank's head of compliance in Luxembourg. She said HSBC did not keep its promise to change. "I think the verbal messages were great but they weren't put into practice and that disturbed me greatly," she said.
It was her job to make sure HSBC followed the rules, but she said she was sacked after raising concerns. She has since won a tribunal hearing for unfair dismissal.
Banking giant HSBC helped wealthy clients across the world evade hundreds of millions of pounds worth of tax, the BBC has learned.
Panorama has seen accounts from 106,000 clients in 203 countries, leaked by whistleblower Herve Falciani in 2007.
The documents include details of almost 7,000 clients based in the UK.
HSBC admitted that it was "accountable for past control failures." But it said it has now "fundamentally changed".
"We acknowledge that the compliance culture and standards of due diligence in HSBC's Swiss private bank, as well as the industry in general, were significantly lower than they are today," it added.
The bank now faces criminal investigations in the US, France, Belgium and Argentina, but not in the UK, where HSBC is based.
(...)
But Panorama has spoken to a whistleblower who said there were still problems with tax dodging at HSBC private bank when she worked there in 2013.
Sue Shelley was the private bank's head of compliance in Luxembourg. She said HSBC did not keep its promise to change. "I think the verbal messages were great but they weren't put into practice and that disturbed me greatly," she said.
It was her job to make sure HSBC followed the rules, but she said she was sacked after raising concerns. She has since won a tribunal hearing for unfair dismissal.
Probably most people would agree that the people paid by the U.S. government to regulate Wall Street have had their difficulties. Most people would probably also agree on two reasons those difficulties seem only to be growing: an ever-more complex financial system that regulators must have explained to them by the financiers who create it, and the ever-more common practice among regulators of leaving their government jobs for much higher paying jobs at the very banks they were once meant to regulate. Wall Street's regulators are people who are paid by Wall Street to accept Wall Street's explanations of itself, and who have little ability to defend themselves from those explanations.
Our financial regulatory system is obviously dysfunctional. But because the subject is so tedious, and the details so complicated, the public doesn't pay it much attention.
That may very well change today, for today — Friday, Sept. 26 —- the radio program "This American Life" will air a jaw-dropping story about Wall Street regulation, and the public will have no trouble at all understanding it.
The reporter, Jake Bernstein, has obtained 47½ hours of tape recordings, made secretly by a Federal Reserve employee, of conversations within the Fed, and between the Fed and Goldman Sachs. The Ray Rice video for the financial sector has arrived. (...)
In early 2012, Segarra was assigned to regulate Goldman Sachs, and so was installed inside Goldman. (The people who regulate banks for the Fed are physically stationed inside the banks.)
The job right from the start seems to have been different from what she had imagined: In meetings, Fed employees would defer to the Goldman people; if one of the Goldman people said something revealing or even alarming, the other Fed employees in the meeting would either ignore or downplay it. For instance, in one meeting a Goldman employee expressed the view that "once clients are wealthy enough certain consumer laws don't apply to them." After that meeting, Segarra turned to a fellow Fed regulator and said how surprised she was by that statement — to which the regulator replied, "You didn't hear that."
This sort of thing occurred often enough — Fed regulators denying what had been said in meetings, Fed managers asking her to alter minutes of meetings after the fact — that Segarra decided she needed to record what actually had been said. So she went to the Spy Store and bought a tiny tape recorder, then began to record her meetings at Goldman Sachs, until she was fired.
(How Segarra got herself fired by the Fed is interesting. In 2012, Goldman was rebuked by a Delaware judge for its behavior during a corporate acquisition. Goldman had advised one energy company, El Paso Corp., as it sold itself to another energy company, Kinder Morgan, in which Goldman actually owned a $4 billion stake, and a Goldman banker had a big personal investment. The incident forced the Fed to ask Goldman to see its conflict of interest policy. It turned out that Goldman had no conflict of interest policy — but when Segarra insisted on saying as much in her report, her bosses tried to get her to change her report. Under pressure, she finally agreed to change the language in her report, but she couldn't resist telling her boss that she wouldn't be changing her mind. Shortly after that encounter, she was fired.) (...)
Location: Half inch above the K/T boundary Gender:
Posted:
Apr 25, 2014 - 1:28pm
Red_Dragon wrote:
There was a time when I could have gotten behind this but now I think a better punishment would be to foreclose on their homes, confiscate all their worldly goods and turn them into shopping-cart homeless people.
Chase Bank is busy sending out notices to hundreds of porn actors to let them know that their filthy lucre isn’t wanted at Chase Bank. You know, because Chase Bank is a highly ethical company that isn’t afraid to take a moral stand when considering where they take their money from. Wait. Wait… didn’t these guys allegedly launder drug money? (...)
BANGKOK — For the most part, American bankers whose rash pursuit of profit brought on the 2008 global financial collapse didn’t get indicted. They got bonuses.
Odds are that scandal would have played out differently in Vietnam, another nation struggling with misbehaving bankers.
The authoritarian Southeast Asian state doesn’t just send unscrupulous financiers to jail. Sometimes, it sends them to death row.
Amid a sweeping cleanup of its financial sector, Vietnam has sentenced three bankers to death in the past six months.
One duo now on death row embezzled roughly $25 million from the state-owned Vietnam Agribank. Their co-conspirators caught decade-plus prison sentences.
There was a time when I could have gotten behind this but now I think a better punishment would be to foreclose on their homes, confiscate all their worldly goods and turn them into shopping-cart homeless people.
