By Pam Martens: July 5, 2012 Gary Foster, a former low level Vice President of Citigroup, pleaded guilty to embezzling over $22 million from the firm between 2003 and 2010. Last week, Foster was sentenced to 8 years in prison.  Compare Foster’s 7-year take to former Chairman and CEO of Citigroup, Sandy Weill’s, 5-year haul from the firm.  In just one year, 2000, Weill cashed in $196.2 million in stock options and received a bonus of $18.4 million.  His total take in a five year period: $785 million.  There have been no clawbacks of Weill’s pay, despite the near bankruptcy of the firm and the taxpayer bailout owing to tens of billions of toxic assets hidden off the balance sheet.  So how did Weill avoid the fate of Foster?  It’s all about getting a sycophant Board of Directors to rubber stamp your actions, filing the details with regulators, and making sure … Continue reading →

By Pam Martens: July 3, 2012  It is a violation of ethics rules for any member of the House of Representatives to use government equipment or property for political purposes, but the Republican Chair of the House Financial Services Committee, Spencer Bachus, is co-opting the taxpayer funded web site, that is part of the legislative branch of Congress, as a political machine against President Obama and House Democrats.  A steady campaign of bashing the President and the Democrats is on display.  A provision of the Members’ Handbook “permits the incidental personal use of House equipment and supplies when such use is negligible in nature, frequency, time consumed, and expense.  However, this policy applies only to incidental personal use of those resources, and not to their use for campaign or political purposes.” (Emphasis in original.)  Under rules issued by the Committee on House Administration and detailed in the Members’ Handbook and … Continue reading →

By Pam Martens: July 2, 2012 We’ve received some snarky comments about our article at AlterNet today (and here) on the factually challenged reporting at the New York Times, suggesting anyone who wants to restore the Glass-Steagall Act is a raging socialist. (Interestingly, the attackers are silent on the boatload of misreported “facts” in the New York Times.)  Yes, those wild-eyed socialists at the Dallas Federal Reserve and Thomas Hoenig, FDIC director and recent director of the Kansas City Federal Reserve and John Reed, former CEO of Citibank, don’t know what they’re talking about either when they say the big banks must be broken up. I recall a veteran activist telling me once, you can gauge the strength of the challenge by the degree of the backlash.

By Pam Martens: July 1, 2012 Spencer Bachus is the Chairman of the powerful House Financial Services Committee. On June 19, 2012, Bachus issued a press release that carried his opening remarks for the hearing on JPMorgan’s $2 billion (and growing) losses.  The final sentence of that prepared text read as follows:  “Before closing, once again I want to re-emphasize the point that JPMorgan and its shareholders – not the bank’s clients, and more importantly, not the taxpayers – are the ones paying for the bank’s mistakes. This is how the system is supposed to work.”  This is how the system is supposed to work? Maybe for the Russian Mafia or in some dystopian universe where only descendants of the Koch brothers are permitted to live.  But here in America, those who have not yet had a Fox News lobotomy, believe this is exactly how the system is not meant to … Continue reading →

By Pam Martens: June 29, 2012 Recent settlements by the Securities and Exchange Commission (SEC) have sent a dangerous message to Wall Street: feel free to lie freely to investors and shareholders as long as you have deep pockets.  In 2007, Citigroup told investors it had $13 billion in subprime exposures, knowing the figure was in excess of $50 billion.  It got caught and on July 29, 2010 paid $75 million to settle charges with the SEC.  Its CFO, Gary Crittenden, was fined a puny $100,000 and the head of its Investor Relations Department, Arthur Tildesley, was fined an even punier $80,000.  That sent a clear message to Wall Street, lying about the risks you are taking or what’s on your balance sheet results in a slap on the wrist and some chump change.  Lying has now morphed into its own profit center.  Also in July 2010, Goldman Sachs settled … Continue reading →

By Pam Martens: June 28, 2012 As networks battled to break the news first, today’s U.S. Supreme Court decision which upheld President Obama’s health care reform, was initially misreported as being overturned on the individual mandate issue by both Fox News and CNN.  CNBC did not misreport the outcome but spent what seemed like an eternity attempting to interpret snippets from Reuters.  CNBC then switched to a constitutional law expert who had to admit he did not know yet how the decision had come down.  ?

Mark Ames, at Exiled Online, has a must read piece,  The Left’s Big Sellout: How The ACLU & Human Rights Groups Quietly Exterminated Labor Rights. Here’s a snippet: “Progressive intellectuals have been acting very bipolar towards labor lately, characterized by wild mood swings ranging from the ‘We’re sorry we abandoned labor, how could we!’ sentiment during last year’s Wisconsin uprising against Koch waterboy Scott Walker, to the recent ‘labor is dead/it’s all labor’s fault’ snarling after the recall vote against Gov. Walker failed.”

By Pam Martens: June 27, 2012 Peter Madoff, brother of convicted Ponzi artist, Bernard (Bernie) Madoff, will plead guilty this week to conspiracy to commit securities fraud and other offenses according to court papers filed today in Federal court in Manhattan.  Peter Madoff worked with his brother as chief compliance officer of the broker-dealer but has in the past denied involvement or knowledge of the Ponzi scheme which was carried out on another floor of the building from where the broker-dealer was housed.  But in the tony towns of the North Shore of Long Island, few people have ever bought that story.  Since at least 1978, Peter and Bernie Madoff solicited funds for management from wealthy country club members on the North Shore of Long Island.  The brothers promised a fixed rate of return of as much as 13 percent on a stock portfolio.  It is illegal to guarantee a fixed rate … Continue reading →

By Pam Martens: June 27, 2012  The Commodity Futures Trading Commission (CFTC) has released the details of its $200 million settlement with Barclays for its attempts to rig interest rate markets. The U.S. Department of Justice, which in decades past took market manipulation seriously, has filed no criminal charges here.  The DOJ let Barclays off the hook with a $160 million penalty and an agreement that it would continue to cooperate with the DOJ.  The UK’s Financial Services Authority imposed a penalty of £59.5 million against the Bank. According to the CFTC, orders came down from senior management at Barclays with one hapless employee responding: “following on from my conversation with you I will reluctantly, gradually and artificially get my libors in line with the rest of the contributors as requested. I disagree with this approach as you are well aware. I will be contributing rates which are nowhere near the clearing rates for unsecured … Continue reading →