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JPMorgan in $4 billion deal with U.S. housing agency

Posted on October 18th, 2013 at 23:54 by John Sinteur in category: Robber Barons


JPMorgan Chase & Co (JPM.N) has reached a tentative $4 billion deal with the U.S. Federal Housing Finance Agency to settle claims that the bank misled government-sponsored mortgage agencies about the quality of mortgages it sold them during the housing boom, the Wall Street Journal reported on its website on Friday.

The deal is for less than the $6 billion the agency initially sought, the Journal said, citing people close to the discussions.

Even the full $6b would not have been much of an incentive never to do this again.

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  1. Settlement = Legal bribery.

  2. I saw headlines about a $13 bln settlement.

  3. It turns out the $4B is relief for struggling homeowners, and on top of that there’s a $9B fine.

    And that $13B is less than half of their last year profits so I still doubt is is much of an incentive to ever do this again.

  4. Happened to see this mentioned elsewhere with a link to a WSJ editorial which pointed out that the acts being punished were by Bear Stearns and other banks that were absorbed by JP Morgan at the government’s request. They (WSJ) were apoplectic that nice JPM which had obliged and adopted the struggling banks was now on the hook for their misdeeds. Hmmm.

JP Morgan is spending more on fines and lawyers than on employee salaries

Posted on October 12th, 2013 at 15:58 by John Sinteur in category: Robber Barons


JP Morgan devoted $9.3 billion to legal expenses last quarter, driving its net loss of $380 million. Its legal troubles took up 39% of its total revenue in the same period, by far the company’s largest single expense.


That’s right: The largest bank in the United States spends more money fighting and paying off legal and regulatory challenges than it does paying its staff, buying securities or paying rent on its 5,600 Chase retail bank branches.


What does your largest expense say about your business? Ideally, the biggest cost should get at the heart of what the firm does. Goldman Sachs’ largest expense was compensation and benefits for its (in)famous talent. Apple’s largest expense in its most recent quarterly report was on sales, largely new stores and employees. General Motors’ largest expense is building cars.


For the first time, the bank revealed its total expenditures on legal costs. Since 2010, JP Morgan has devoted $31 billion to legal problems, spending $8 billion on settlements and reserving $23 billion for future costs. That’s almost half of its net earnings ($57.5 billion) in the same period, keeping in mind some of those reserves can be returned to stockholders if settlements and legal fees turn out to be less than expected

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  1. Clearly any fines etc. aren’t working and should be increased.

Traders may have gotten last week’s Fed news 7 milliseconds early

Posted on September 25th, 2013 at 9:09 by John Sinteur in category: Robber Barons


Markets swung rapidly on the 2 p.m. announcement last Wednesday, with stocks, bonds, and the price of gold all skyrocketing. Somebody placed massive orders for gold futures contracts betting on exactly that outcome within a millisecond or two of 2 p.m. that day — before the seven milliseconds had passed that would allow the transmission of the information from the Fed’s “lock-up” of media organizations who get an early look at the data and the arrival of that information at Chicago’s futures markets (that’s the time it takes the data to travel at the speed of light. A millisecond is a thousandth of a second). CNBC’s Eamon Javers, citing market analysis firm Nanex, estimates that $600 million in assets could have changed hands in that fleeting moment.

There would seem to be three possibilities: 1) Some trader was extraordinarily lucky, placing a massive bet just before a major announcement that would make that bet highly profitable. 2) There was a leak, either by a media organization with early access to the data or even someone at the Fed. Or 3) The laws of physics have been violated as the information traveled from Washington to Chicago faster than the speed of light.

You can see why Option 2 looks the most plausible.

Presumably there will be a hard look into what exactly happened, and in particular whether some technical glitch allowed some high frequency trading firm to get the data a few milliseconds early, or some unethical behavior. But in the meantime, there’s another useful lesson out of the whole episode.

It is the reality of how much trading activity, particularly of the ultra-high-frequency variety is really a dead weight loss for society.

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Nokia Admits Giving Misleading Information About Elop’s Compensation

Posted on September 24th, 2013 at 19:35 by John Sinteur in category: Robber Barons


Nokia’s board of directors seems caught in a tragicomedy of epic proportions. The latest twist is Finland’s largest newspaper claiming that Nokia made a false statement about CEO’s bonus package last Friday. Pressed by Finnish and international media last week, chairman Siilasmaa had claimed then that the bonus structure of Stephen Elop’s contract in 2010 was “essentially the same” as the one the previous CEO had received. But the largest daily of the country, “Helsingin Sanomat”, decided to dig into SEC filings to investigate the matter. By early Tuesday morning, the newspaper had uncovered evidence that Nokia’s board had made fundamental changes in Elop’s contract compared to his predecessors.

According to changes implemented in 2010, Elop was entitled to immediate share price performance bonus in case of a “change of control” situation… such as selling of Nokia’s handset division. Curiously, his predecessor Kallasvuo had no such clause in his contract. This adjustment meant that unlike previous CEOs, Elop was facing an instant, massive windfall should the following sequence happen to take place:

– Nokia’s share price drops steeply as the company drifts close to cash flow crisis under Elop.

– Elop sells the company’s handset unit to Microsoft under pressure to raise cash

– The share price rebounds sharply, though remains far below where it was when Elop joined the company.

Should this unlikely chain of events ever occur, Elop would be entitled to an accelerated, $25M payoff.

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Heads They Win, Tails We Lose

Posted on September 15th, 2013 at 18:08 by John Sinteur in category: Robber Barons


Many years ago MIT’s Andy Lo made a simple point (weirdly, I haven’t been able to track down the paper) about the distortion of incentives inherent in financial-industry compensation. Suppose you’re a hedge fund manager, getting 2 and 20 — fees of 2 percent of investors’ money, plus 20 percent of profits. What you want to do is load up on as much leverage as possible, and make high-risk, high return investments. This more or less guarantees that your fund will eventually go bust — but in the meantime you’ll have raked in huge personal earnings, and can walk away filthy rich from the wreckage.

But surely, you say, investors will see through this strategy. They can’t consistently be that stupid or naive, can they?


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16 Major Firms May Have Received Early Data From Thomson Reuters

Posted on September 6th, 2013 at 8:53 by John Sinteur in category: Robber Barons


Rolling Stone has since learned that a whistleblower complaint has been filed to the SEC identifying 16 of the world’s biggest banks and hedge funds as the allegedly even-earlier recipients of this key economic data. The complaint alleges that this select group of customers received the data anywhere from 10 minutes to an hour ahead of the rest of the markets.

The identity of these 16 firms has not been made public yet, but sources describe the firms as major financial institutions, many of them well-known to the general public. Their inclusion in this case would significantly expand the scope of the scandal.

Contacted by Rolling Stone today, the SEC declined to comment on the status of the case.

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  1. Oh, so it’s unfair for some high frequency traders to receive info early, but it’s OK that they have HFT capabilities in the first place that aren’t available to the general public? What-evah!

Bank CEO Buys Condo With TARP Money

Posted on August 28th, 2013 at 17:45 by John Sinteur in category: Robber Barons



Darryl Layne Woods, the former CEO of a Missouri bank, admitted in court yesterday to using financial crisis bailout funds to purchase a luxury waterfront condo in Florida, Dealbook’s Peter Lattman reports.

In November 2008, Woods, 48, who was the head of Mainstreet Bank and the bank’s holding company Calvert Financial Corporation, applied for TARP money on behalf of his bank, a press release states.

In January 2009, his bank received $1,037,000. A month later, he used $381,487 of it to buy a place in Fort Myers, Florida.

He pleaded guilty to misleading federal investigators about how he used the TARP money.

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Spanish police arrest ex-JPMorgan trader wanted in US on fraud charges

Posted on August 27th, 2013 at 21:23 by John Sinteur in category: Robber Barons


A former JPMorgan Chase & Co. trader wanted by the United States for allegedly falsifying bank records to cover up $6 billion in trading losses was arrested in Madrid Tuesday, Spanish police said.

A statement said Spaniard Javier Martin-Artajo, 49, was arrested after he presented himself to police in Madrid, who had located and asked him to turn himself in.

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The Confidential Memo at the Heart of the Global Financial Crisis

Posted on August 23rd, 2013 at 10:04 by John Sinteur in category: Robber Barons


When a little birdie dropped the End Game memo through my window, its content was so explosive, so sick and plain evil, I just couldn’t believe it. The Memo confirmed every conspiracy freak’s fantasy: that in the late 1990s, the top US Treasury officials secretly conspired with a small cabal of banker big-shots to rip apart financial regulation across the planet. When you see 26.3 percent unemployment in Spain, desperation and hunger in Greece, riots in Indonesia and Detroit in bankruptcy, go back to this End Game memo, the genesis of the blood and tears.

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  1. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks…will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered…. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.

    – Thomas Jefferson in the debate over the Re-charter of the Bank Bill (1809)

    History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance.

    -James Madison

    If congress has the right under the Constitution to issue paper money, it was given them to use themselves, not to be delegated to individuals or corporations.

    -Andrew Jackson

    Issue of currency should be lodged with the government and be protected from domination by Wall Street. We are opposed to…provisions [which] would place our currency and credit system in private hands.

    – Theodore Roosevelt

    I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men.

    -Woodrow Wilson

    The real truth of the matter is,as you and I know, that a financial element in the large centers has owned the government ever since the days of Andrew Jackson…

    -Franklin D. Roosevelt

    “Money plays the largest part in determining the course of history.”

    Karl Marx writing in the Communist Manifesto (1848).

    “The bank hath benefit of interest on all moneys which it creates out of nothing.”

    William Paterson, founder of the Bank of England in 1694, then a privately owned bank

    “It is well enough that people of the nation do not understand our banking and money system, for if they did, I believe there would be a revolution before tomorrow morning.”

    Henry Ford, founder of the Ford Motor Company.

    “The modern banking system manufactures money out of nothing. The process is, perhaps, the most astounding piece of sleight of hand that was ever invented. Banks can in fact inflate, mint and un-mint the modern ledger-entry currency.”

    Major L L B Angus.

    “Let me issue and control a nation’s money and I care not who writes the laws.”

    Mayer Amschel Rothschild (1744-1812), founder of the House of Rothschild.

    Hegel was right when he said that we learn from history that man can never learn anything from history.

    George Bernard Shaw

  2. Educate the disaffected in the ways of non violent protest and execute on a global scale. It will be unstoppable.

  3. It’s a complicated problem of slavery, addiction, predation and waste. People need livable wages, instead they live on credit. They need affordable housing, instead they get massive mortgages for maxi-pads. Sigh…now you’ve got me off on a rant again!

Ex-JPMorgan traders charged in $6.2bn ‘London Whale’ case

Posted on August 15th, 2013 at 21:36 by John Sinteur in category: Robber Barons


Former JPMorgan Chase traders Javier Martin-Artajo and Julien Grout were charged by US federal prosecutors for manipulating bank records and understating losses in the $6.2 billion ‘London Whale’ financial debacle of 2012.

In a blow to Wall Street and America’s largest bank by assets, prosecutors filed charges against Martin-Artajo, 49, a former London-based managing director and trading supervisor, and Grout, 35, an ex-trader at the London office.

The two charged men, whose arrest warrants were issued August 9, haven’t been located by authorities. Grout, a French national, is reportedly in France, and Martin-Artajo is reportedly on a planned holiday, according to statements from their respective lawfirms.

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

Posted on August 13th, 2013 at 12:30 by John Sinteur in category: Robber Barons


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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  1. Want to commit crime and get away with it? There are currently several good choices:

    1. Get elected to federal office.
    2. Become a “law enforcement” officer.
    3. Become a bank executive.
    4. Work for the TLA agencies such as the NSA/CIA/DOJ/DHS/DEA, et al.

    Me, I vote for #3 – the pay is a LOT better than the others, though if you are elected to Congress (#1), you can usually land a cushy position with #3 when you leave office…

BART’s Tax Shelters

Posted on August 5th, 2013 at 9:39 by John Sinteur in category: Robber Barons


Remember when BART helped a few giant multi-national corporations establish lucrative tax shelters?

You probably don’t. It hasn’t been written about much in the press. The type of deal BART agreed to has gotten some attention, but even so, most people are unfamiliar with the scheme and how it works. BART’s tax shelter deals almost cost the transit agency $40 million in 2009 when the financial sector was melting down. One of the agreements withered and BART lost $5.5 million. Few people know this.

So what sketchy tax shelters am I talking about? They’re called lease-in, lease-out, or LILO agreements. BART calls them lease, leaseback agreements in their financial reports.

In a LILO deal a public transit agency like BART leases its trains or train operating equipment to a private corporation for some extended period of time. The corporation immediately turns around and leases the property back to BART. The terms of the lease are incredibly complicated and circuitous. I wont go into details here. It’s the kind of creative accounting and contract law that vast financial disasters are made from, and it’s mind-numbing in detail.

Why would BART ever do this you ask?

The most immediate answer is because it provided up front cash payments to BART which the agency then capitalized over a period of future years. This had the effect of easing BART’s budgetary strains, and providing BART with more borrowing capacity. It was the closest thing to free money the agency had ever been offered besides its cut of the regional sales tax, and it could be gotten without political pain, without appealing to voters for a bigger trim of retail sales. And BART wouldn’t need to confront the big real estate corporations in San Francisco and Oakland that have benefitted so much from the system. Million of dollars could be generated out of a shuffle of paperwork and a fictitious transfer of capital through a circular lease agreement.

Of course there’s no such thing as free money. The money that BART obtained from the deals was cut from the profits that BART’s private financial partners were making through the LILO agreements. These profits came not out of any productive investment activities or new efficiencies, for the LILO deal didn’t meaningfully transfer or redeploy ownership of BART’s assets, nor did it redeploy the lease payments into any other economic activity. Rather, the profits were harvested from federal tax deductions claimed by the private corporations leasing and then subleasing BART’s trains and equipment. It was, in the words of Senator Charles Grassley, “a good old fashioned tax fraud.”

Of course BART would never characterize it that way. Nor will the financial corporations that have been the instigators of these deals.

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Latvia resists US call to extradite ‘virus maker’

Posted on August 4th, 2013 at 14:02 by John Sinteur in category: Robber Barons


Latvia is resisting calls to extradite a man the US alleges wrote a computer virus used to steal millions.

In January, Latvian Deniss Calovskis was named by the US as one of the creators of the Gozi virus.

Latvian courts have twice rejected US extradition requests and its foreign minister has now backed their stance.

In a statement, he said the potential jail term Mr Calovskis faced was too severe for the crimes he is alleged to have committed.


They ran a “modern-day bank robbery ring, that required neither a gun or a mask”, said US attorney Preet Bharara in January.


Mr Rinkevics said the US sought a jail term for Mr Calovskis that exceeded 60 years.
Continue reading the main story
“Start Quote

In my view, such a penalty is disproportionate to the amount, and so far no-one has been able to conclusively dispel my fears that it might be otherwise”

Latvian minister Edgars Rinkevics

While he could not take a view on whether Mr Calovskis broke the law or not, the jail term amounted to an effective life sentence, he wrote.

“In my view, such a penalty is disproportionate to the amount, and so far no-one has been able to conclusively dispel my fears that it might be otherwise,” he said.

I know some other folks worthy of jail sentence who are still running a “modern-day bank robbery ring, that required neither a gun or a mask”…

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  1. Yeah. Maybe if we gave our bank executives similar sentences for the frauds and robbery they have perpetrated on the world they might reconsider… That and $5 will get you a nice cuppa coffee at Starbucks. :rolleyes:

US regulators ‘find evidence’ of banks fixing derivative rates

Posted on August 4th, 2013 at 9:53 by John Sinteur in category: Robber Barons


The Commodity Futures Trading Commission (CFTC) is probing 15 banks over allegations that they instructed brokers to carry out trades that would move ISDAfix, the leading benchmark rate for interest rate swaps.

Pension funds and companies who invest in interest rate derivatives often deal with banks to insure against big movements in the ISDAfix rate or to speculate on changes to interest rate swaps

ISDAfix is published each morning after banks submit bids for swaps via Icap, the inter-dealer broker, in a number of currencies. The CFTC has been investigating suggestions that the banks deliberately moved the rate in order to profit on these deals.

Given the hundreds of trillions of dollars worth of interest rate derivatives trades that occur annually, even the slightest manipulation can have a substantial effect. The CFTC, which started to investigate ISDAfix after last summer’s Libor scandal has now been handed emails and phone call recordings that show the rate was deliberately moved, according to Bloomberg.

Barclays has reportedly handed the CFTC information, while employees at Icap and Citigroup have also been questioned. In its interim results statement yesterday, Royal Bank of Scotland also said it was co-operating with authorities regarding the investigation.

Man, we are going to slap their wrists so hard.

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  1. Settlement….

How complex are corporate structures?

Posted on August 3rd, 2013 at 9:10 by John Sinteur in category: Robber Barons


Visualisations of corporate ownership for six banks: Bank of America, Citigroup, Goldman Sachs, Morgan Stanley, JP Morgan and Wells Fargo.

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Ex-Goldman Sachs trader Fabrice Tourre liable in $1bn fraud

Posted on August 2nd, 2013 at 10:21 by John Sinteur in category: Robber Barons


A New York jury has found former Goldman Sachs trader Fabrice Tourre liable for fraud in a complex mortgage deal that cost investors $1bn (£661m).

Jurors concluded that the trader, who nicknamed himself “Fabulous Fab”, had misled investors in the run up to the global financial crisis in 2008.

Complex mortgage investments played a significant role in the crisis.

Mr Tourre was found liable in six of the seven fraud claims brought by US financial regulators.

He was accused by the Securities and Exchange Commission (SEC) of misleading investors about investments linked to subprime mortgages that he knew would fail.

Because the case is civil rather than criminal, he faces possible fines and a ban from the financial services industry.

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Family mistakenly locked out of home even though mortgage payments current

Posted on July 25th, 2013 at 16:40 by John Sinteur in category: Robber Barons


Michael, who is father of three and husband, asked RTV6 not publish his last name.

His family has lived at 11889 Esty Way for 10 years until April, when they decided to move to a bigger home and rent out their townhouse.

Michael found a tenant, but he was forced to refund the money when their townhouse was locked and the utilities were turned off.

“Our lender changed the locks on us,” Michael said.

A notice was left on the Esty Way townhouse from Safeguard Properties , a company that works with mortgage lenders in securing homes being returned to the banks.

Safeguard’s posting alerted the family that, “all persons entering this property (must) provide an explanation of their visit, sign and date the form.”

Michael was locked out, even though his bank statements show he is current with his mortgage and his loan doesn’t mature until 2033.


“The woman told me — this is something that I will never forget, honestly — she told me that they were the mortgage company, and if they wanted to change your locks, they could,” Davis said.

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  1. And if you have money deposited in that bank, you can change their locks too.

Art as Alternative Investment Creates Storage Business Tax Haven

Posted on July 25th, 2013 at 9:32 by John Sinteur in category: Robber Barons


Anyone hoping to get into the walk-in lock boxes of this very special Swiss tax haven must first surmount a number of hurdles. At the first door, an employee has to type the right combination of numbers into a small screen. The next hurdle is a large steel barrier that has to be rotated counter-clockwise until it snaps into place, followed by a heavy steel door that resembles a submarine bulkhead. Behind it is a drab corridor with doors on both sides. Only the renters have keys to these doors.

The employee of Geneva Free Ports & Warehouses Ltd. remains discreetly in the background while the owners of the locked-up treasures count their gold bars or examine their collection of paintings being stored in the warehouse.

The Nahmad dynasty of art dealers reportedly has 300 Picassos in storage in Geneva. Countless Degas, Monets and Rothkos are also stored on the inhospitable premises. The estimated value of the works is in the billions. Hardly any museum can boast such a valuable collection.

Those who use the warehouse are genuinely wealthy. According to the Capgemini World Wealth Report, there were 12 million millionaires in the world last year, with combined assets of $46.2 trillion (€35 trillion), or 10 percent more than in the previous year.

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Athens County Woman Wants Possessions Back After Bank Tried To Repossess Wrong House

Posted on July 24th, 2013 at 14:34 by John Sinteur in category: Robber Barons


An Athens County woman is looking to get her belongings back after a bank incorrectly broke into her house and took them.

Katie Barnett says that the First National Bank in Wellston foreclosed on her house, even though it was not her bank.

“They repossessed my house on accident, thinking it was the house across the street,” Barnett said.

Barnett, who had been away from the house for about two weeks, said she had to crawl through the window of her own house in order to get in after she used her own key that did not work.

Some of the items in her house had been hauled away, others were sold, given away and trashed.

It turns out the bank sent someone to repossess the house located across the street from Barnett’s house, but by mistake broke into hers instead.

“They told me that the GPS led them to my house,” Barnett said. “My grass hadn’t been mowed and they just assumed.”

She called the McArthur Police about the incident, but weeks later, the chief announced the case was closed.

Barnett said that according to the bank president, this was the first time something like this has happened.

She presented him with an $18,000 estimate to replace the losses, but the president refused to pay.

Nice to have to police to help you when your stuff is nicked…. “Someone stole your home and all your shit? Sorry call back when you have a real crime to report, like someone smoking a joint.”

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  1. I not only think she should sue the bank but also sue the police department for failure to act on a crime.

  2. I think they’re too big to sue now too. It would probably take her 5 years to get her money.

  3. Perhaps the only good thing about the legal system in the U.S. is that there are lots of hungry lawyers to help such people – for a price.

Lac-Megantic taking legal action against rail company

Posted on July 23rd, 2013 at 22:09 by Sueyourdeveloper in category: News, Robber Barons


The town of Lac-Megantic is taking legal action against the rail company at the heart of this month’s fatal train derailment in the community. Mayor Colette Roy-Laroche says Montreal, Maine & Atlantic has not yet paid any of the workers it hired to clean up the crude oil that leaked from dozens of tanker cars.

She told a news conference today that Lac-Megantic has paid the workers $4 million so far after some threatened to walk off the job. Roy-Laroche says lawyers have been told to inform MMA that it must pay up right away. She described the situation as completely unacceptable.

Forty-two bodies have been found since the blaze and explosions on July 6, with another five people missing and presumed dead.

Good luck on collecting from that bunch.

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A Shuffle of Aluminum, but to Banks, Pure Gold

Posted on July 21st, 2013 at 13:35 by John Sinteur in category: Robber Barons


Hundreds of millions of times a day, thirsty Americans open a can of soda, beer or juice. And every time they do it, they pay a fraction of a penny more because of a shrewd maneuver by Goldman Sachs and other financial players that ultimately costs consumers billions of dollars.

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  1. Break em up, Re-impose Glass Steagall, off with the robber barons heads, and while I am dreaming, organize mass protests against the supreme court until the Citizens United is repealed. After that, enact strict anti lobbying laws.

  2. Crikey, Mykolas! What would we have left to complain about after that? :-)

Interview: HSBC Swiss Bank Whistleblower Herve Falciani on Tax Evasion

Posted on July 16th, 2013 at 22:53 by John Sinteur in category: Robber Barons


SPIEGEL: Still, authorities in Spain and France have convicted a number of prominent tax evaders based on the data you gave them.

Falciani: That’s true, but so far not even 1 percent of the information I supplied has been analyzed, because the authorities are only interested in client names. But this information can also be used to expose the system banks have installed to make tax evasion and money laundering possible. For me, it has always been about calling attention to the banks’ behavior, after I failed to change it from inside.

SPIEGEL: The bank denies you ever pointed out problems from inside.

Falciani: I did, but to no avail. Most Swiss banks do have a whistleblower program, but they use it to punish those who avail themselves of it.

SPIEGEL: Did you also offer your information to German authorities?

Falciani: Three years ago, I offered my help and made direct contact through my lawyer.


Falciani: Nothing happened.

SPIEGEL: Why was that?

Falciani: I ask myself the same question. We’re talking about a total of 127,000 clients and over 300,000 accounts.

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The Ruling That Could Change Everything For Disabled People With Million-Dollar Trusts

Posted on July 15th, 2013 at 19:16 by John Sinteur in category: Robber Barons


When Judge Kristen Booth Glen walked into her Manhattan Surrogate’s courtroom one day in 2007, she had no idea she was about to challenge the nation’s top banks on behalf of tens of thousands of disabled people.

Before her stood lawyer Harvey J. Platt, who was petitioning to become the legal guardian of Mark Christopher Holman, a severely autistic teen who lived in an institution upstate.

Holman had been left an orphan nearly three years earlier after the eccentric millionaire who adopted him passed away. According to doctors, he had the communication skills of a toddler, unable to bathe, dress, or eat by himself.

But before Judge Glen would grant this seemingly perfunctory petition, she had a few questions for Platt.

“How often have you visited Mark Holman?” she asked the lawyer.

“Since his mother died, I have not visited him,” said Platt.

“And when you say you haven’t visited him since then, how often had you visited him prior to that?”

“I haven’t seen him since he was eight or nine,” responded the lawyer. “His mother used to bring him to our office with his brother, just to show him my face and so forth and so on, so I haven’t seen him probably since 1995 or 1996.”

It was around that time that Platt helped Mark’s mother, Marie Holman, draft her will and create trusts for him and his older brother. A decade later, when she was dying, Platt promised Marie he’d apply to become Mark’s guardian.

“And have you visited the institution which he currently resides in?” Glen asked.

“No, I intend to, but I have not as yet,” Platt said, sounding weary. “I don’t think even a visit has much significance anyway. He’s totally nonverbal—he’s never spoken a word. He’s potentially aggressive.”

This didn’t sit well with Judge Glen. When it came to signing away the rights of disabled people to guardians, she was perhaps the most cautious judge in New York. But what came next would floor her.

Platt informed her that Mark’s trust had reached nearly $3 million. But while his trustees—Platt and JP Morgan Chase—had collected thousands of dollars in commissions, they hadn’t spent a penny on Mark. Medicaid covered his basic care at the institution upstate, but neither the lawyer nor the bank had considered how his mammoth trust might further aid his quality of life.

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  1. This posting seems to be missing an end tag or something. It’s breaking the page!

  2. fixed, thx!

If You Put $250 in a Chase “Savings Account,” You’ll Get 12.5 Cents in Yearly Interest — And Maybe Charged $4 a Month

Posted on July 13th, 2013 at 14:25 by John Sinteur in category: Robber Barons


If you are a working stiff and can squirrel away $250 to put in a Chase “savings account,” Chase will pay you 12.5 cents a year (.05% APY at a “standard rate”). Furthermore, if you don’t make any transactions, they will charge you $4 a month, meaning that you will be left with $202 at the end of a year, plus your 2.5 cents.

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Can we tame the banks?

Posted on July 10th, 2013 at 21:19 by John Sinteur in category: Robber Barons


As Andrew Haldane, director of stability at the Bank of England, put it in a historical overview a few years ago, ‘there is one key difference between the situation today and that in the Middle Ages. Then, the biggest risk to the banks was from the sovereign. Today, perhaps the biggest risk to the sovereign comes from the banks. Causality has reversed.’ Yes, it has: and the sovereign at risk is us. The reason for that is that in the UK bank assets are 492 per cent of GDP. In plain English, our banks are five times bigger than our entire economy. (When the Icelandic and Cypriot banking systems collapsed the respective figures were 880 and 700 per cent.) We know from the events of 2008 and subsequently that the financial sector, indeed the whole world economy, is in an inherently unstable condition. Put the size together with the instability, and we are facing a danger that is no less real for not being on the front page this exact second. This has to be fixed, and it has to be fixed soon, and nothing about fixing it is easy.


In the UK, the government has spent magic money on QE to the tune of £375 billion, 23.8 per cent of our GDP. An amount equal to a quarter of our entire annual economic activity has therefore been willed into being in an attempt to stimulate the economy. If they’d just given the money directly to the public, perhaps in the form of time-limited, UK-only spending vouchers, it would have amounted to just under £6,000 for everyone, man, woman or child, in the country. Can anyone doubt that the stimulus effect of that would have been much bigger?

But you can’t trust little people with all that money, can you? Giving banks money is the only way out of our mess, right? The trouble with just giving people money is that they’ll go out and buy things with it, effectively wasting it on foolish nonsense like food, and housing.

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Tougher capital rules proposed for 8 largest U.S. banks

Posted on July 10th, 2013 at 19:30 by John Sinteur in category: Robber Barons


The nation’s eight largest banks would have to meet tougher financial ratios than required under international standards as part of proposed rules designed to protect taxpayers from another financial crisis.

Under the plan, Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc., Wells Fargo & Co. and four other U.S. bank holding companies designated as “systemically important financial institutions” would each have to hold capital equal to at least 5% of total assets.

In addition, their federally insured bank subsidiaries, such as Citibank and Chase bank, would have to hold capital equal to at least 6% of assets, according to the proposed rules.

Other U.S. banks and bank holding companies have to meet only a 3% leverage ratio under rules adopted by regulators as part of an international agreement known as Basel 3.

Michael Milken (of junk-bond infamy) once said:


“When I was on Wall Street, we rarely had more than 1:1 leverage, and the highest I recall in my career was 4:1. The idea of leveraging 30:1 or more, as many financial institutions did recently, is not a business.”

When the guy responsible for a market meltdown based largely on not being able to cover losses tells you your leverage is off, it might be a good idea to listen.

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Daily CEO Pay Now Exceeds the Average Worker’s Annual Salary

Posted on July 6th, 2013 at 21:08 by John Sinteur in category: Robber Barons


In 1965, the average CEO made 20 times the average worker. Now the ratio is 273 to 1, meaning the average CEO makes in a day what their workers make in a year.

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Jeff Olson Found ‘Not Guilty’ Of Vandalism For Anti-Bank Chalk Messages

Posted on July 2nd, 2013 at 20:41 by Paul Jay in category: Robber Barons


Jeff Olson was found not guilty of vandalism today after writing anti-bank messages about Bank of America on public sidewalks in water-soluble chalk last year.

Olson was charged with 13 counts of vandalism and faced 15 years in jail, plus $13,000 in fines.

Olson had written the anti-bank messages in front of three Bank of America buildings in San Diego, California.

Darrell Freeman, Vice President of Bank of America’s Global Corporate Security, pushed San Diego authorities to prosecute Olson for writing messages such as: “No thanks, big banks” and “Shame on Bank of America.”

San Diego Deputy City Attorney Paige Hazard was in communication with Bank of America, assuring the multinational corporation that Olson would be charged.

As reported by the San Diego Reader, Judge Howard Shore banned Olson’s lawyer from mentioning the “First Amendment.”

Despite that highly-questionable ruling, the jury still voted “not guilty” in Olson’s case, notesNBC San Diego.

San Diego Mayor Bob Filner had called the prosecution of Olson by San Diego City Attorney Jan Goldsmith “a stupid case,” reported the Los Angeles Times.

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  1. I guess the US will have to revoke their free trade agreement.

  2. Stupid indeed. A bank employee with a watering can could have saved all this trouble.

  3. Sue, you do know tort reform was only for the 99%.

  4. That’s OK, the Streisand Effect is for the rest…

  5. So the bank, angry that someone said that they weren’t nice, had the State Attorney prosecute the guy for telling the world that they weren’t nice?

    It would seem that banks are fully capable of informing the public that (without any help from others) they are money-grubbing, untrustworthy trolls with the warmth & compassion of an anal cyst. And no-one else is allowed to elbow in on spreading that message, the banks can do it all by themselves…

EU charges 13 banks, ISDA, Markit with breaching EU antitrust rules

Posted on July 2nd, 2013 at 15:07 by John Sinteur in category: Robber Barons


Financial data company Markit, the International Swaps and Derivatives Association (ISDA) and 13 banks were charged with blocking two exchanges from entering the credit derivatives market in the last decade in breach of European Union (EU) antitrust rules.

The European Commission said the group, which included Goldman Sachs and UBS, shut out Deutsche Boerse and the Chicago Mercantile Exchange from the Credit default swaps (CDS) business between 2006 and 2009.

CDS are over-the-counter contracts that allow an investor to bet on whether a company or country will default on its bonds within a fixed period of time. Lack of transparency on such derivatives is a key target of regulators following the 2007-2009 crisis.

The case is one of several opened by the EU antitrust regulator into the financial services since the crisis. Banks and other companies involved could be fined up to 10% of their global turnover if found guilty of infringing EU rules.

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Setback for Hollande’s transparency drive

Posted on June 27th, 2013 at 15:17 by Sueyourdeveloper in category: News, Robber Barons


French politicians have diluted President Francois Hollande’s plans to make politicians declare their wealth in a transparency drive. They have also backed harsh penalties for journalists who publish the information.

After the resignation of a budget minister over a secret Swiss bank account, Hollande’s government drafted a bill in April to force politicians to declare their assets and income to an independent authority.

However, members of the National Assembly, the lower house of France’s parliament, who worried about their privacy, including Hollande’s own Socialist Party, voted on Tuesday in favour of an amended version of the bill.

The new version would only provide the information to people who specifically requested it.

Besides, it would ban publication of the details: any reporter who publishes the information would be subject to a jail sentence of one year and could pay a fine of 45,000 euros ($58,000).

They are so worried about their privacy poor lambs. Off with their heads!

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