Snip…”Though it was mostly a week of in-your-face reminders of ethical lapses and outright wrongdoing by movers and shakers, it began with news from New York City officials that 70 students at an elite high school had been involved in a cheating scandal.” Susan Antilla is a syndicated columnist and has covered the insidious proliferation of Wall Street’s crime machine and its facilitators for more than three decades. Read the full blog post here:  Could It Get Any Worse? Don’t Answer That. Bankers, Regulators, High School Students Have Really Bad Week.  

By Pam Martens: July 13, 2012 In unusually swift fashion (unlike the long court action to obtain details of the secret trillions in loans the Fed lavished on domestic and foreign banks) the Federal Reserve Bank of New York today handed over emails and other documents showing that Barclays, the first firm to be charged in rigging the interest rate benchmark known as Libor, was using the New York Fed’s stately offices as a confessional.  In one email, an unnamed confessor from Barclays tells Fabiola Ravazzolo, a Senior Financial Economist at the New York Fed with a sexy British accent (sort of like that comforting voice on your car GPS) that, yes, he’s sinned. FR is Fabiola Ravazzolo;  the colon represents the Barclays employee. FR: And, and why do you think that there is this, this discrepancy? Is it because banks maybe they are not reporting what they should or is it um…  … Continue reading →

By Pam Martens: July 13, 2012 If you were one of the smart folks and didn’t waste 120 minutes of your now shortened lifespan listening to three overpaid bankers at JPMorgan attempt to explain away gambling losses on insured deposits on this morning’s conference call, let me distill it down to what all that verbosity and high frequency speech was meant to obscure.  Chairman and CEO, Jamie Dimon, and his colleagues on the call, repeatedly referred to this debacle as an “isolated failure.” The use of the word “isolated” is quite a stretch. JPMorgan Chase currently faces an FBI criminal probe of this matter; criminal probes over rigging overnight borrowing rates (Libor); a probe over rigging the electric markets of California and the Midwest; a fraud trial for rigging derivatives in Milan. It recently paid $1.1 billion to settle its foreclosure fraud issues and had to admit to Congress that it overcharged 4500 … Continue reading →

By Pam Martens: July 13, 2012 Current U.S. Treasury Secretary, Timothy Geithner, was President of the Federal Reserve Bank of New York in 2008.  He has now conceded that he was aware of problems with the setting of Libor interest rates as early as 2008 and sent an email to the Bank of England with recommendations for addressing the problems.  Why the rigging was allowed to continue remains an open question.  According to the chart below, released by Barclays, it made a total of 12 complaints to the Federal Reserve beginning as early as August 28, 2007, the date it contacted the Fed twice in one day.  Its contacts with the Fed continued through October 27, 2008.  The Federal Reserve Bank of New York is set to release documents this morning, presumably showing what it knew and when, following a written request by Randy Neugebauer, a House Republican from Texas. Blue … Continue reading →

By Pam Martens: July 12, 2012 A deeply troubling message for America is unfolding around Russell Wasendorf, Sr., owner of Peregrine Financial Group, who lies in a coma in an Iowa City hospital after an attempted suicide with a hose attached to the exhaust pipe of his car outside the corporate monument he built to his wealth and success; a monument he sustained with money stolen from his clients. According to regulators, Wasendorf’s commodities and futures firm is missing at least $200 million of customer funds. The troubling message is this: from Bernie Madoff’s cell in North Carolina, to $1.6 billion of missing customers’ funds at MF Global, overseen by a former U.S. Senator and Governor of New Jersey, Jon Corzine, to the news last week that some of the largest banks in the world had created a culture where their traders felt free to email and instant message instructions to … Continue reading →

By Pam Martens: July 10, 2012  One would have thought that after $1.6 billion of customer funds went missing at MF Global, the large commodities firm run by former U.S. Senator and Governor from New Jersey, Jon Corzine, that the Commodity Futures Trading Commission would have verified bank balances at every futures merchant it regulates.  It didn’t. In an enforcement action announced yesterday, the National Futures Association (NFA) said that accounts have been frozen, except for liquidating positions, at Peregrine Financial Group, Inc. (PFG) and Peregrine Asset Management.  According to the NFA, PFG was reporting $400 million in segregated funds for customers and a bank balance of $225 million. (The difference would have conceivably been margin balances.) The actual bank funds that can now be accounted for are $5 million.  According to the NFA, the dramatic overstatement of bank balances dates back to at least 2010.  According to media reports, the … Continue reading →

By Pam Martens: July 9, 2012 The Mayor of Baltimore, the Baltimore City Council, the City of New Britain Firefighters’ and Police Benefit Fund of Connecticut filed an amended lawsuit on April 30 of this year seeking class action status in Federal Court in New York over the rigging of Libor.  The plaintiffs state that the City of Baltimore purchased hundreds of millions of dollars of derivatives tied to Libor while the New Britain Firefighters and Police Benefit Fund purchased tens of millions.  They are suing the banks involved in submitting Libor rates.  The plaintiffs have submitted to the Court significant background data suggesting that anomalies in other financial measurements show which banks were brazenly lying when submitting their borrowing rates for setting Libor.  One chart stands out in particular.  The following shows the 12-month U.S. Dollar Libor quotes from Citigroup and the Bank of Tokyo, together with the respective bank’s one-year … Continue reading →

By Pam Martens: July 9, 2012 The big money to be made from cheating on Libor was from exchange traded interest rate contracts and over-the-counter interest rate swaps.  According to the Office of the Comptroller of the Currency, as of March 31, 2012, U.S. banks held $183.7 trillion in interest rate contracts.  Just four firms represent 93% of total derivative holdings: JPMorgan Chase, Citibank,  Bank of America and Goldman Sachs.   A criminal investigation by the Canadian Competition Bureau into the rigging of Libor has implicated JPMorgan Bank Canada, Citibank Canada, HSBC Bank Canada, Deutsche Bank AG, and the Royal Bank of Scotland N.V. (RBS).  UBS is cooperating with the probe and providing documents. The Bureau’s demand for production of documents at each of the banks suggest that their derivative traders used emails and instant messaging to communicate artificially high or low bids to the bank’s staff who were submitting rate … Continue reading →

By Pam Martens: July 6, 2012  A five day chart of JPMorgan Chase shows what shareholders think of the company. (The market was closed Wednesday for the July 4th holiday.) Taxpayers have no reason to cheer either.  Each day seems to bring another tax-payer funded investigation of potentially serious wrongdoing at the firm.  The latest probe involves an investigation into JPMorgan for manipulating electric markets in California and the Midwest through its commodities business.  The Federal Energy Regulatory Commission (FERC) issued subpoenas to JPMorgan in April and May.  FERC wanted emails pertaining to its investigation.  JPMorgan is now being sued by FERC in Federal Court in Washington, D.C. to turn over 25 emails it has withheld.   The dispute has erupted into the public spotlight over the incredulous claim by JPMorgan that the emails are subject to attorney-client privilege.  FERC says the emails are between bankers.  How JPMorgan hopes to convince a Federal court … Continue reading →