Janet Yellen: Trump’s Tax Cut Could Play a Negative Role in Next Downturn

By Pam Martens and Russ Martens: December 15, 2017

Janet Yellen, Chair of the Federal Reserve, Taking the Oath at Her Senate Confirmation Hearing

Janet Yellen, Chair of the Federal Reserve, Taking the Oath at Her Senate Confirmation Hearing in 2013

During Janet Yellen’s last press conference as Federal Reserve Chair on Wednesday, Donna Borak, the Senior Economics Writer at CNN, asked Yellen a question regarding the proposed tax cut. Borak queried:

“To return back to the prospective tax bill questions, in your view at all is the Republican tax bill an ill-timed fiscal stimulus, and are you concerned at all it will wind up squandering the tools both the Congress and the Fed have when it comes time to dealing with the recession?”

Yellen answered as follows:

“So look, I will just say that it is up to the administration and Congress to decide on appropriate fiscal policy, and our job is to maintain our focus on employment and inflation. We continue to think, as you can see from the projections, that a gradual path of rate increases remains appropriate even with almost all participants now factoring in their assessment of the impact of the tax policy. You know, it is projected that the tax cut package will lead to additions to the national debt and boost, by the end of the horizon, the debt to GDP ratio. And I will say, and this is nothing new, this is something I’ve been saying for a long time, I am personally concerned about the U.S. debt situation.

“It’s not that the debt to GDP ratio at the moment is extraordinarily or worrisomely high, but it’s also not very low. And it’s projected, as the population continues to age and the baby boomers retire, that that ratio will continue to rise in an unsustainable fashion. So the addition to the debt, taking what is already a significant problem and making it worse is, it is of concern to me, and I think it does suggest that in some future downturn, which well could occur just for whatever reason, the amount of fiscal space that would exist for a fiscal policy to play an active role, it will be limited, may well be limited.”

Yellen’s take on the national debt and the projected $1 trillion that will be added to it as a result of Trump’s proposed tax cut fails to capture the unprecedented and dangerous growth of the national debt under both Wall Street Democrat and Republican administrations.

When Bill Clinton took office in January 1993, the U.S. national debt stood at $4 trillion. The country was then more than two centuries old. The U.S. had paid for the Revolutionary War, the Civil War. It had financed Franklin Delano Roosevelt’s New Deal programs to provide jobs and stimulus during the Great Depression. The nation had also paid for World Wars I and II and the Vietnam War. When President Obama took office in January 2009, the national debt stood at $10.6 trillion as the government and Fed began pumping out money to compensate for the Wall Street collapse and ensuing economic crisis.

Today, the national debt stands at $20.6 trillion. It has almost doubled since President Obama took office and now a Republican President wants to add a trillion dollars to this unprecedented acceleration of debt.

Neither Trump nor Yellen appear to understand why GDP is lagging in the United States. The late MIT economist, Lester Thurow, explained today’s problem almost 30 years ago. In a foreward Thurow wrote in Ravi Batra’s book, “The Great Depression of 1990,” Thurow outlined the economic dilemma of a society in which vast wealth is concentrated in too few hands. Thurow wrote:

“Depression is seen as a product of systematic tendencies for the distribution of wealth to become concentrated among a few. When this happens, demand eventually sags relative to supply and long cyclical downturns commence. Unlike some cyclical analysts, Batra believes that such cycles are not inevitable and can be controlled with social policies essentially designed to stop undue concentration of wealth from developing.

“Essentially, the economic problem is like that of the wolf and the caribou. If the wolves eat all the caribou, the wolves also vanish. Conversely, if the wolves vanish, the caribou for a time multiply but eventually their numbers become too great and they die for lack of food. Producers need consumers, and if producers deprive workers of their fair share of production income they essentially deprive themselves of the affluent consumers they need to make their facilities profitable. One could think of Batra’s argument as a kind of economic ecology where there is a ‘right’ environmental balance.”

The depression that Batra wrongly had in mind for 1990 became the Great Recession that followed the 2008 Wall Street crash. Its underpinnings clearly were a Wall Street business model of fraud and an institutionalized wealth transfer system from the 99 percent to the 1 percent, leaving the U.S. with the greatest wealth inequality since the late 1920s.

The answer to this problem is decidedly not a tax cut for the richest Americans and a ballooning national debt.

Fed’s Janet Yellen: Stock Market Bubble Not Seen as Major Risk Factor

Outgoing Fed Chair Janet Yellen Holds Her Last Press Conference on December 13, 2017

Outgoing Fed Chair Janet Yellen Holds Her Last Press Conference on December 13, 2017

By Pam Martens and Russ Martens: December 14, 2017

The outgoing Chair of the Federal Reserve, Janet Yellen, held her last press conference yesterday following the Federal Open Market Committee’s decision to hike the Feds Fund rate by one-quarter percentage point, bringing its target range to 1-1/4 to 1-1/2 percent.

Given the growing reports from market watchers that the stock market has entered the bubble stage and could pose a serious threat to the health of the economy should the bubble burst, CNBC’s Steve Liesman asked Yellen during the press conference if there are “concerns at the Fed about current market valuations.”

Yellen gave a response which may doom her from a respected place in history. She stated:

“So let me start Steve with the stock market generally. Of course the stock market has gone up a great deal this year and we have in recent months characterized the general level of asset valuations as elevated. What that reflects is simply the assessment that looking at price-earnings ratios and comparable metrics for other assets other than equities we see ratios that are in the high end of historical ranges. And so that’s worth pointing out.

“But economists are not great at knowing what appropriate valuations are. We don’t have a terrific record. And the fact that those valuations are high doesn’t mean that they’re necessarily overvalued.

“We are in a – I’ve mentioned this in my opening statement and we’ve talked about this repeatedly – likely a low interest rate environment, lower than we’ve had in past decades. If that turns out to be the case, that’s a factor that supports higher valuations.

“We’re enjoying solid economic growth with low inflation and the risks in the global economy look more balanced than they have in many years.

“So I think what we need to, and are trying to think through, is if there were an adjustment in asset valuations in the stock market, what impact would that have on the economy and would it provoke financial stability concerns.

“And, I think when we look at other indicators of financial stability risks, there’s nothing flashing red there or possibly even orange.

“We have a much more resilient, stronger banking system and we’re not seeing worrisome buildup in leverage or credit growth at excessive levels. So, this is something that the FOMC [Federal Open Market Committee] pays attention to, but if you ask me is this a significant factor shaping monetary policy now, while it’s on the list of risks it’s not a major factor.”

Yellen makes at least one unassailable admission in this statement: her economist predecessors at the Fed certainly “don’t have a terrific record” in calling out bubbles – Alan Greenspan being the worst offender.

After presiding over the worst subprime mortgage and derivatives bubble in history on the belief that Wall Street was fully capable of policing itself, former Fed Chair Alan Greenspan had this to say at a House Oversight Committee hearing on October 23, 2008 after his blunder had helped usher in the greatest financial collapse since the Great Depression:

“So the problem here is something which looked to be a very solid edifice. And, indeed, a critical pillar to market competition and free markets, did break down. And I think that, as I said, shocked me. I still do not fully understand why it happened and, obviously, to the extent that I figure out where it happened and why, I will change my views. If the facts change, I will change.”

In the same hearing, Henry Waxman, the Chair of the Committee, had no problem understanding “why it happened.” It was, plain and simple, regulatory capture. Waxman explained:

“In each case, corporate excess and greed enriched company executives at enormous cost to shareholders and our economy. In each case, these abuses could have been prevented if Federal regulators had paid more attention and intervened with responsible regulations…

“For too long, the prevailing attitude in Washington has been that the market always knows best. The Federal Reserve had the authority to stop the irresponsible lending practices that fueled the subprime mortgage market, but its long-time chairman, Alan Greenspan, rejected pleas that he intervene. The SEC had the authority to insist on tighter standards for credit rating agencies, but it did nothing, despite urging from Congress.

“The Treasury Department could have led the charge for responsible oversight of financial derivatives. Instead, it joined the opposition. The list of regulatory mistakes and misjudgments is long, and the cost to taxpayers and our economy is staggering.

“The SEC relaxed leverage standards on Wall Street, the Offices of Thrift Supervision and the Comptroller of the Currency preempted State efforts to protect home buyers from predatory lending. The Justice Department slashed its efforts to prosecute white-collar fraud.

“Congress is not exempt from responsibility. We passed legislation in 2000 that exempted financial derivatives from regulation, and we took too long, until earlier this year, to pass legislation strengthening oversight of Fannie Mae and Freddie Mac.

“Over and over again, ideology trumped governance. Our regulators became enablers rather than enforcers. Their trust in the wisdom of the markets was infinite. The mantra became government regulation is wrong, the market is infallible.”

How can it be that just a mere nine years since the second greatest financial collapse in U.S. history, the Federal Reserve, the Federal regulator that oversees the largest bank holding companies on Wall Street with a seat on the Financial Stability Oversight Council, has learned nothing about bubbles.

Roy Moore’s Loss in Alabama: A Victory for the Young Girls of America

By Pam Martens and Russ Martens: December 13, 2017

Republican Candidate, Roy Moore, Accused of Child Molestation, Rides His Horse to Vote in the Special Election for U.S. Senate on December 12, 2017

Republican Candidate, Roy Moore, Accused of Child Molestation, Rides His Horse to Vote in the Special Election for U.S. Senate on December 12, 2017

As mainstream media sees it, Roy Moore’s stunning special election loss yesterday in red-state Alabama to Democrat Doug Jones is all about narrowing Republican control in the U.S. Senate; or it’s about Trump’s inability to boost a fellow Republican; or it’s an early warning for Republicans as to how they will fare in the 2018 midterm elections.

But if the media could pull itself out of the 24/7 political swamp for a moment and broaden our nation’s horizon past 2018, we might consider the impact that last night’s events will have on the lives of the women who had the courage to come forward and accuse Roy Moore of sexually molesting them when they were young girls and its impact on the next generation of American girls who desperately need and deserve less hostile work environments in our so-called “democracy” when it’s their time to join the workforce.

From television news to Hollywood to Congress to the Oval Office, women have boldly said this year that enough is enough. They have risked their careers and backlash and lawsuits and revealed their sexual attackers, even after they had signed those barbaric gag orders as part of a settlement to shield their attackers from public disclosure. They have brought one of America’s darkest secrets of how women are routinely sexually demeaned in the workplace and “kept in their place” into the disinfecting sunshine of public scrutiny. That courage has inspired a long-overdue national debate on what America really stands for and if it is genuinely a beacon of hope to the world.

Putting a man like Donald Trump in the White House after he was caught on an Access Hollywood video admitting to grabbing women in their genital area and bragging that he could get away with it because he was a celebrity has only added more fuel to the burning question of just how bright America’s beacon actually shines to the rest of the world.

If you are a young girl working as a waitress or in a store in a Mall in Alabama, you won a victory last night. If you are the parents or grandparents of a young teenage girl, you can sleep a little easier tonight. Across America, adult men who prey on underage girls or young women in the workplace have received the message that even powerful politicos supported by the President of the United States can be shamed in the public square.

Roy Moore is the God-touting former Judge who, despite multiple, credible allegations of preying on young girls in his 30s, including allegations of sexually assaulting a 14 and 16 year old, received the support of President Trump. The special election was held to fill the U.S. Senate seat vacated by Jeff Sessions after Trump named him U.S. Attorney General.

But this national debate will fall short of meaningful change in our nation if the key underpinning of sexual assaults with impunity in America is not fully addressed and discontinued. Whether we are talking about sexual assaults within the Catholic Church, in the military, on college campuses, or on Wall Street, a private justice system has been tolerated and it is that no-court system that has allowed these atrocities to proliferate and to be shielded from law enforcement and public scrutiny. In many of these cases, our nation’s courts and jury trials were removed as a remedy to the victim of the crime on the recommendation of lawyers dangling a monetary settlement, of which they would get a quick, hefty cut.

When the Pope visited the United States in 2015 and commented on the “pain” of the bishops and their “courage,” Barbara Blaine, President of Survivors Network of Those Abused by Priests (SNAP), released a statement noting that it was bishops who “enabled horrific crimes,” and that only four have resigned. Blaine said further:

“Virtually none of the other US clerics, (out of thousands) have ever been punished in the slightest for protecting predators, destroying evidence, stonewalling police, deceiving prosecutors, shunning victims or helping child molesting clerics get new jobs or flee overseas.

“And no one in the entire US Catholic hierarchy, despite 30 years of horrific scandal and at least 100,000 US victims, has been defrocked, demoted, disciplined or even publicly denounced by a church colleague or supervisor, for covering up child sex crimes, no matter how clearly or often or egregiously he did so.”

In the case of Wall Street, where sexual harassment and assaults on women are part of the business model for fine-tuning predatory traders, the industry is actually allowed to run its own system-wide private justice system where all claims by both employees and customers are barred from the courtroom under a contract that employees and customers must sign before getting a job in the industry or opening an account. The public and press are not permitted to attend the hearings; courtroom rules of evidence and case precedent are discarded; and instead of a jury of one’s peers there is a deeply conflicted pool of repeat-player arbitrators looking to please the industry that pays them.

Even in the case of Harvey Weinstein, the Hollywood producer accused of abusing dozens of women in the U.S. and abroad, he was able to perpetrate his assaults over decades without public disclosure by effectively creating his own private justice system. Weinstein intimidated his victims into silence and then used lawyers to contractually bind them to iron-clad gag orders and monetary settlements.

All of these private justice systems and private agreements for silence are a repudiation of the Civil Rights Acts of 1964 and 1991. These critical acts of Congress were intended to provide civil rights protections in the workplaces of America, including anti-discrimination statutes and court remedies to stamp out sexual predators who use their position of superior rank to sexually harass subordinates.

The legislation confers on the private plaintiff the role of private attorney general to pursue not only her own claim but to vindicate the rights of other women to a workplace free of harassment and discrimination. The Equal Employment Opportunity Commission (EEOC), the Federal agency that enforces the civil rights acts, has filed amicus briefs with Federal appellate courts, outlining the importance of the private litigant’s role in functioning as a private attorney general on behalf of society as a whole.

Women across America have made great strides this year in finding their voice and the power and energy that comes from a collective voice. That voice must now focus on these barbaric private justice systems that underpin the rot in America or no meaningful change will be forthcoming.

Editor’s Note: The Editor of Wall Street On Parade, Pam Martens, was the lead named plaintiff in a high profile Federal class action lawsuit filed in 1996 which sought to overturn Wall Street’s private justice system for civil rights plaintiffs and shine a bright light in the public courtroom on the egregious sexual harassment and sexual assault experienced by women on Wall Street. Martens walked away from the settlement crafted by the attorneys, which enshrined gag orders and left Wall Street’s private justice system in place.

What’s Going On Inside Your Wall Street Brokerage Firm?

By Pam Martens and Russ Martens: December 12, 2017

Wall Street Street SignThe Financial Industry Regulatory Authority (FINRA), Wall Street’s self-regulator with a long history of conflicts of interest, has released a summary of its findings from the examinations it conducts at the nation’s brokerage firms. As is typical of FINRA, the document released to the public is extremely light on details. (Almost half of FINRA’s Board comes from inside the industry, with current representation from JPMorgan Chase, Merrill Lynch, Citadel and Fidelity, to name just a few of the insiders.)

One area of the report did stand out, however. FINRA has expressed concerns about the fairness of the price you’re getting on the stock or bond trade you’re placing with your broker. In Wall Street parlance, this is known as “Best Execution.” The report explains:

“Best execution is a significant investor protection requirement that essentially obligates a broker dealer to exercise reasonable care to execute a customer’s order in a way to obtain the most advantageous terms for the customer…If a broker-dealer receives an order routing inducement, such as payment for order flow, or trades as principal with customer orders, it must not let those factors interfere with its duty of best execution nor take them into account in analyzing market quality…

“FINRA had concerns regarding the duty of best execution at firms of all sizes that receive, handle, route or execute customer orders in equities, options and fixed income securities. FINRA found that some firms failed to implement and conduct an adequate regular and rigorous review of the quality of the executions of their customers’ orders…

“As a result of such deficiencies, these firms failed to assure that order flow was directed to markets providing the most beneficial terms for their customers’ orders. FINRA notes that conducting a regular and rigorous review of customer execution quality is critical to the supervision of best execution practices, particularly if a firm routes customer orders to an alternative trading system in which the firm has a financial interest or market centers that provide order routing inducements, such as payment for order flow arrangements and order routing rebates.”

In the paragraph above, FINRA highlights firms that route “customer orders to an alternative trading system in which the firm has a financial interest.” An alternative trading system (ATS) is typically a Dark Pool operating inside the bowels of the largest Wall Street banks, e.g., Goldman Sachs, JPMorgan Chase, Citigroup, Morgan Stanley, Merrill Lynch, etc. Dark Pools function as thinly regulated stock exchanges with little to no visibility given to the public.

Because there is no public outcry as a result of this darkness, there has been little interest from the mainstream business press to cover this deeply conflicted part of the market. Wall Street On Parade has attempted to fill in the gaps in reporting on this issue. (See related articles below.)

FINRA is now asking us to believe that it wants to see “rigorous review of customer execution quality” done by the brokerage firms that are running Dark Pools. But here’s what happened in 2014 when FINRA had the chance to take a strong stand against Goldman Sachs for outrageous conduct in its Dark Pool known as Sigma-X.

FINRA’s Market Regulation staff conducted an investigation of Sigma-X from July 29, 2011 through August 9, 2011 – a brief eight trading days. The investigation resulted in findings that the Dark Pool had denied its customers a trading price equal to the National Best Bid and Offer (NBBO), which is what they are required to do under law, on 395,119 transactions.

Instead of rigorously reviewing its in-house trading practices for deficiencies, FINRA tells us that “from at least November 1, 2008 through August 31, 2011” Goldman Sachs only spot-checked 20 orders per week to determine if they were in compliance with the National Best Bid and Offer. That sounds like the precise opposite of “rigorous.”

FINRA apparently looked further to see if there was a pattern of bad trades. It explains in a footnote that it knows of two other dates when Sigma-X also failed to provide its customers with trades at the National Best Bid and Offer: 7,585 bad trades occurred on March 16, 2011 and 6,359 occurred on June 23, 2011.

Given what looks like a very serious pattern of wrongdoing, one would have expected a serious regulator to review the entire three year period in question and specifically define how much money this cost the investing public.

Instead, FINRA waited three years to release its findings from 2011 and then settled the matter for chump change. On June 3, 2014, FINRA levied a fine of $800,000 against Goldman Sachs, suggesting that the meager fine was because Goldman had “voluntarily” agreed to pay its fleeced customers $1.67 million in restitution. Of course, without the precise details on how many actual bad trades there were in the three year period, the public has no way to determine if $1.67 million was meaningful restitution or a wink and a nod to Goldman’s version of “rigorously” policing its internal Dark Pool.

Step back for a moment and think about this: FINRA, a self-regulator with deep industry ties has outsourced its monitoring function to the Wall Street firms themselves, asking them to “rigorously” police themselves while it provides only spot checks. This in an industry where everything from the interest rate benchmark Libor to foreign exchange to the metal markets have been rigged by colluding Wall Street banks in recent years. Some bank traders even formalized the name of their group, appropriately calling themselves “The Cartel” and “The Bandits Club.”

In 2012, Wall Street Journal reporter, Scott Patterson, released a 354-page book that took a hard look at U.S. market structure. It was titled: Dark Pools: High Speed Traders, A.I. Bandits, and the Threat to the Global Financial System. On page 339 of his book, Patterson writes in the notes section: “The title of this book doesn’t entirely refer to what is technically known in the financial industry as a ‘dark pool.’ Narrowly defined, dark pool refers to a trading venue that masks buy and sell orders from the public market. Rather, I argue in this book that the entire United States stock market has become one vast dark pool. Orders are hidden in every part of the market. And the complex algorithm AI-based trading systems that control the ebb and flow of the market are cloaked in secrecy. Investors – and our esteemed regulators – are entirely in the dark because the market is dark.” (The italics in this excerpt are as they appear in the hardcover book.)

In  2014, Wall Street veteran and bestselling author Michael Lewis published his non-fiction book Flash Boys and went on 60 Minutes to declare that the U.S. stock market is rigged. Since that time, the SEC has done essentially nothing to correct the rigged structure of trading. Traditional stock exchanges, that are supposed to be self-regulatory bodies, are still charging enormous fees to allow high-frequency trading firms to co-locate their computers next to the stock exchange computers to gain a speed advantage. The stock exchanges are still selling a faster direct feed of trading data to those who can afford the obscene cost of this data and trade ahead of the market on that data. Discount brokers are still selling their own customers’ stock orders to alternative trading systems run by some of the biggest Wall Street firms in an unseemly system known as “payment for order flow” that places a low to non-existent concern on best execution.

And to top it all off, FINRA has the audacity to be running a private justice system for these same Wall Street firms – allowing them to close the nation’s courthouse doors to both customers and employees seeking restitution and to level the playing field.

Is it any wonder that Americans no longer trust Wall Street?

Related Articles:

Are Big Banks’ Dark Pools Behind the Run-Up in Bank Stock Prices?

Another Wall Street Inside Job?: Stock Buybacks Carried Out in Dark Pools

Shades of 1930 in Wall Street Banks’ Dark Pools?

Citigroup’s Dark Pools: Here’s Why the Public Doesn’t Trust Wall Street

FINRA Bombshell: Biggest Wall Street Banks Are Trading Their Own Stock in Dark Pools

Citadel’s Dark Pool: SEC Draws a Dark Curtain Around Its Operations 

Voting Rights for Human Felons Versus Bank Felons

By Pam Martens and Russ Martens: December 11, 2017 

Jamie Dimon, Chairman and CEO of  JPMorgan Chase

Jamie Dimon, Chairman and CEO of JPMorgan Chase

In 2012, the Sentencing Project released a study that estimated that 5.85 million people would be ineligible to vote in the U.S. Presidential election that year because they had been convicted of a felony. In 22 states, felons lose their voting rights during incarceration, and for a set period of time thereafter. Usually, this includes while the individual is on parole and/or probation.

Eleven states in the U.S. are more harsh. They deny voting rights to felons who have served their time in prison and have successfully completed parole and probation.

If you’re a citizen of the United States and commit a felony, it’s a big deal. If you’re a Wall Street bank and commit a felony, it’s business as usual.

In January 2014, JPMorgan Chase was charged with two felony counts by the U.S. Department of Justice for its involvement with Bernard Madoff’s Ponzi scheme but given a deferred prosecution agreement, meaning if it kept out of trouble for two years, the government would dismiss the charges. The bank also agreed to pay $1.7 billion into a restitution fund for the victims of Madoff’s fraud.

After reading the documents released by the Justice Department in connection with the settlement, the Los Angeles Times asked in a photo caption: “Bernie Madoff: Was he part of the JPMorgan ring, or was JPMorgan part of his ring?”

The Los Angeles Times had an excellent basis for asking that question. We took an in-depth look at the documents and exhibits released by both the Justice Department and the Trustee of the Madoff victims’ fund, Irving Picard, and found a labyrinthine series of frauds within frauds involving both Madoff and JPMorgan Chase. (See our article: JPMorgan and Madoff Were Facilitating Nesting Dolls-Style Frauds Within Frauds.)

Michael Hiltzik, an outraged reporter at the Los Angeles Times, had this to say about the deal that JPMorgan Chase was able to cut with Federal prosecutors:

“If the government were really determined to root out white-collar crime and prevent outfits like JPMorgan from condoning lawbreaking that unfolds in front of its own eyes, it had the tools to do so: Indict the bank executives and officials who knew Madoff was crooked and did nothing, and threaten to revoke the bank’s charter. Would that be a great loss to the financial system? JPMorgan has been racking up multibillion-dollar settlements over white-collar misdeeds on an almost monthly basis lately. It hasn’t been operating like a bank, but like a criminal enterprise. And as this case now shows, it has been aiding and abetting its fellow criminals along the way.”

The very following year, on May 20, 2015, JPMorgan Chase agreed to a third felony count brought by the U.S. Justice Department, this time for its involvement in rigging foreign currency markets.

According to Justice Department’s plea agreement with JPMorgan Chase, both “currency traders” and “sales staff” were involved in widespread wrongdoing. The plea agreement states:

“In addition to its participation in a conspiracy to fix, stabilize, maintain, increase or decrease the price of, and rig bids and offers for, the EUR/USD currency pair exchanged in the FX Spot Market, the defendant, through its currency traders and sales staff, also engaged in other currency trading and sales practices in conducting FX Spot Market transactions with customers via telephone, email, and/or electronic chat, to wit: (i) intentionally working 17 customers’ limit orders one or more levels, or “pips,” away from the price confirmed with the customer; (ii) including sales markup, through the use of live hand signals or undisclosed prior internal arrangements or communications, to prices given to customers that communicated with sales staff on open phone lines; (iii) accepting limit orders from customers and then informing those customers that their orders could not be filled, in whole or in part, when in fact the defendant was able to fill the order but decided not to do so because the defendant expected it would be more profitable not to do so; and (iv) disclosing non-public information regarding the identity and trading activity of the defendant’s customers to other banks or other market participants, in order to generate revenue for the defendant at the expense of its customers.”

Now, while the ordinary citizen would be serving a long prison sentence and have his ability to vote removed for three felony counts within less than a year and a half, no such punishment has befallen JPMorgan Chase. In fact, its employees have continued to vote and funneled $3.6 million into the 2016 Federal political campaigns.  Since 2014, when the first felony counts were filed, JPMorgan Chase has spent $14 million lobbying the Federal government.

After Wall Street’s corrupt practices collapsed the U.S. economy and financial system in 2008, causing the greatest downturn since the Great Depression, one would have expected Congress to have cracked down on the crime spree. But because members of Congress are heavily dependent on campaign financing from Wall Street, its worst practices were never reined in. It still runs its own private justice system; it still pays for ratings from Moody’s and Standard and Poor’s and other rating agencies; it’s still holding hundreds of trillions of dollars in derivatives inside its own taxpayer-backstopped depository banks; and it’s still allowed to engage in deeply-conflicted trading inside its own Dark Pools.

No serious attempt at prosecuting Wall Street for the frauds that led to the financial collapse was even made. According to the PBS program Frontline, there was not even a pretense of investigating the executives on Wall Street by the U.S. Justice Department: “there were no investigations going on. There were no subpoenas, no document reviews, no wiretaps.”

Bob Urie, in a 2012 opinion piece at Counterpunch, sums up the U.S. model of faux democracy. He writes: “The surveillance state, built at our expense, is the servant of the bankers and corporate leaders. The bankers and corporations are the state.” Urie urges the public to “Recognize that the values that the bankers and corporations have handed us are not our values, and are not even human values.”