By Pam Martens: January 23, 2014 Politico’s Ben White appears to have joined the Maria Bartiromo be-kind-to-Wall-Street camp. Bartiromo lectured fellow participants on Meet the Press last September that “We need to get beyond the conversation of is Wall Street evil.” (Perhaps the statement should be phrased: “Wall Street needs to stop being evil so we can get beyond that conversation.”) White took it one step further last week, suggesting in a column that Wall Street is fully reformed and no longer dangerous, thanks to those omnipotent folks in the Nation’s capitol whose financial reforms have gotten Wall Street purring like a kitten. In a piece preposterously titled “How Washington beat Wall Street,” White writes that “In 2009, Washington went to war against big Wall Street banks hoping to blow up the kind of high-risk, high-reward strategies that helped spark the financial crisis. Five years later, that war is largely … Continue reading →

By Pam Martens: January 22, 2014 Just when it seemed that the ethical reputation of the U.S. government, now universally known as Bugs R Us by its closest allies, enemies and citizens alike, was at its nadir, along comes a court affidavit by Harold W. McGraw III, chairman of McGraw Hill Financial, parent of Standard and Poor’s rating agency. The affidavit by McGraw, filed in a Federal District Court in California, seeks to bolster S&P’s position that the government is only suing it in retaliation for its downgrade of U.S. debt rather than meritorious claims that it fudged its credit ratings. The affidavit claims that former U.S. Treasury Secretary Timothy Geithner called McGraw in August 2011 and threatened to retaliate against S&P for downgrading the debt of the United States. According to McGraw, Geithner was angry and accused S&P of making an error in calculating the basis for the downgrade, … Continue reading →

By Pam Martens: January 21, 2014 On February 5, 1997, the U.S. investment bank, Morgan Stanley, known for its stock underwriting and merger and acquisition business, made its first foray into creating a product distribution pipeline to mom and pop investors — it bought Dean Witter, Discover & Company and its army of stockbrokers. Last year, Morgan Stanley completed the purchase of Smith Barney’s retail brokerage business, giving it a selling force of over 16,000 stockbrokers – now called advisors. But a 16,000-strong sales force is not the only product distribution pipeline owned by Morgan Stanley. The company has a controlling stake in TransMontaigne, a sprawling oil and gas behemoth which owns real pipelines that carry real oil. According to the company’s web site, the ownership structure is as follows: “TransMontaigne Partners has no officers or employees and all of our management and operational activities are provided by officers and … Continue reading →

By Pam Martens: January 20, 2014 David Bird, a reporter who covers energy markets for the Wall Street Journal, has been missing for nine days. Bird, who has worked for the parent of the Wall Street Journal, Dow Jones, for more than 20 years, left his Long Hill, New Jersey home on the afternoon of Saturday, January 11, telling his wife he was going for a walk. Despite a continuous search by hundreds of volunteers and law enforcement officials, Bird has not been located. Bird is 55 years old, approximately 6’1, and was last seen wearing a red jacket with yellow zippers according to officials. He and his wife, Nancy, have two children, ages 12 and 15. Anyone with information is asked to contact the Long Hill Police at (908) 647-1800. According to a report in the Wall Street Journal, Bird is a liver-transplant recipient and is required to take … Continue reading →

By Pam Martens: January 16, 2014 There was a distinct chill in the air yesterday as questioning got underway in the U.S. Senate’s hearing on whether the Wall Street mega banks that caused the greatest economic collapse since the Great Depression from 2008 through 2010 should be allowed to effectively control the price of aluminum and other metals by owning metal warehouses and creating bottlenecks in delivery; or allowed to own oil pipelines, terminals and tankers while trading trillions of dollars a year in oil futures – potentially rigging that market against the consumer. It’s not that there’s limited evidence that these firms will rig markets. These are the same firms that are serially charged and pay enormous fines for fraud and cartel-like behavior. Traders even refer to themselves as “The Cartel” and “The Bandits’ Club” in chat rooms. The hearing was called by Senator Sherrod Brown, Chair of the … Continue reading →

By Pam Martens: January 15, 2014 U.S. Senator Sherrod Brown, Chair of the Subcommittee on Financial Institutions and Consumer Protection, part of the Senate Banking Committee, will hold a hearing today at 2:00 p.m. on “Regulating Financial Holding Companies and Physical Commodities.” This will be the second time in six months that the U.S. Senate has investigated the alleged rigging of these markets by Wall Street firms as the Federal Reserve, the sole regulator to grant Wall Street the power to push into these markets, fails to take action to repeal its orders and asks for public comment through March 15, after which time it will study the problem some more. In his written testimony submitted to the Committee, on which he will take questions today, Norman Bay, Director of the Office of Enforcement at the Federal Energy Regulatory Commission (FERC), cited examples of fraudulent activity by Deutsche Bank, Barclays, … Continue reading →

By Pam Martens: January 14, 2014 At New Jersey Governor Chris Christie’s news conference on January 9, he gave the country a clear perspective into his character, personality, and his temperament under fire. That was a very big mistake for his presidential ambitions. In Christie’s opening remarks and throughout the answer and question period with reporters, Christie’s narcissism was on full display. Governor Christie was holding court in an effort to do damage control over leaked emails showing that members of his closely-knit circle of associates had engaged in political payback in closing down lanes on the George Washington Bridge to cause enormous traffic tie-ups in Fort Lee, New Jersey – a town with a Mayor who had not endorsed the Governor for reelection. The traffic jams delayed first responders, put people’s lives at risk, and caused school children to be late getting to school. Even in an age where … Continue reading →

By Pam Martens: January 13, 2014 Last week JPMorgan Chase paid $2.6 billion in fines and restitution, signed a deferred prosecution agreement and walked away from their 22-year involvement with Bernie Madoff’s Ponzi scheme. But according to court documents filed in 2011 by the Trustee of the Madoff victims’ fund, Irving Picard, this was not a simple case of poor risk management at JPMorgan. This was an operation structured like those Russian nesting dolls, with the Ponzi scheme as the outside doll with many more frauds layered inside the big one. After reading the documents released by the Justice Department in connection with the settlement, the Los Angeles Times asked in a photo caption of a smirking Madoff outside of Federal Court: “Bernie Madoff: Was he part of the JPMorgan ring, or was JPMorgan part of his ring?” The New York Times had a far more charitable stance, with Floyd … Continue reading →

By Pam Martens: January 9, 2014 According to the settlement documents released Tuesday by Preet Bharara, the U.S. Attorney for the Southern District of New York, Bernie Madoff was not content to simply engineer the largest Ponzi scheme under the very noses of the largest squad of regulators in the history of finance, he was simultaneously running a brazen check-kiting scheme under the same noses. Irving Picard, the Trustee of the Madoff victims’ fund set up by the Securities Investor Protection Corporation (SIPC), provided a great amount of detail on this operation in a court filing against JPMorgan in 2011. This week, U.S. Attorney Bharara added additional details. According to Bharara, Madoff was writing checks from an account at “Madoff Bank 2” – a bank other than JPMorgan – to Norman F. Levy, a mutual customer of both Madoff’s firm and JPMorgan. Later the same day, Madoff would transfer money … Continue reading →

By Pam Martens: January 8, 2014 A sense of déjà vu overwhelmed me yesterday reading the U.S. Justice Department’s settlement documents with JPMorgan in the Madoff case. I knew I had read most of this before. As it turns out, Irving Picard, the trustee for victims of the Madoff fraud had exquisitely presented all of this evidence in an amended complaint that he filed in court on June 24, 2011 – two and one-half years ago. There is one huge difference between what Picard entered into the public court record and what the U.S. Attorney for the Southern District of New York, Preet Bharara, entered into the public record yesterday: Picard named names – at JPMorgan and at the feeder funds that blindly shoveled billions to Madoff. All of that explosive naming detail is missing in Bharara’s neat settlement, suggesting that is how the U.S. Attorney’s office wrung such an … Continue reading →