Search Results for: bank collusion

By Pam Martens: April 16, 2014 As far as we can tell from his online bio, George Melloan has never worked a day inside a Wall Street firm – at least not in the past half century since that time has been spent writing or editing for the Wall Street Journal. But that small detail does not in any way inhibit Melloan from telling those of us who had long careers inside the belly of the beast how we should revise our thinking about what we saw and heard with our own eyes and ears. Michael Lewis, Yves Smith, Frank Partnoy, Gretchen Morgenson, Greg Smith, Nomi Prins (all with a strong foundational basis for their writings from having worked on Wall Street) apparently need to be set straight by Melloan’s outsider views. Nomi Prins has just come under the sharp pen of Melloan in a  Wall Street Journal review of … Continue reading →

By Pam Martens: February 18, 2014 Yesterday, the UK’s Serious Fraud Office brought criminal charges against three more individuals in the matter of rigging the interest rate benchmark known as Libor. But the sum total of what we learned about those charges from the Serious Fraud Office are the following two sentences: “Criminal proceedings by the Serious Fraud Office have commenced today against three former employees at Barclays Bank Plc, Peter Charles Johnson, Jonathan James Mathew and Stylianos Contogoulas, in connection with the manipulation of LIBOR.  It is alleged they conspired to defraud between 1 June 2005 and 31 August 2007.” There was no formal criminal complaint released to the press; no smoking gun emails; no transcripts of collusion in chat rooms. Just the above two sentences. In the U.S., we are certainly not getting financial crimes by the big banks under control any better than the UK but at … Continue reading →

By Pam Martens: December 4, 2013 Gary Gensler, the outgoing Chairman of the Commodity Futures Trading Commission, previously testified to Congress that he began investigating allegations that a global banking cartel was rigging the international interest rate benchmark known as Libor in the spring of 2008. One can prudently assume that around the same time, he made the issue known to the U.S. Department of Justice.  It’s now almost six years later and yet two of the U.S. banks involved in the cartel, JPMorgan Chase and Citigroup, have yet to be charged by U.S. authorities. Today, JPMorgan and Citigroup have admitted participating in the Yen Libor financial derivatives cartel to the European Commission and accepted fines of €79.8m ($108.3 million) and €70m ($95 million), respectively. Citigroup avoided paying an additional €55m ($74.6 million) by being granted full immunity for one of its three charged infringements, ostensibly for its cooperation in … Continue reading →

By Pam Martens: November 12, 2013 President Obama is about to do it again – appoint one of those revolving door Wall Street lawyers to head a critical top post at one of Wall Street’s key regulators. This time it’s the Chair of the Commodity Futures Trading Commission (CFTC). According to multiple leaks in the business press today, this afternoon the President will nominate Timothy Massad to head the CFTC – a man who spent 27 years at Cravath, Swaine & Moore, a core part of Wall Street’s legal muscle. Massad is not coming directly from Cravath this time around. On June 30, 2011, Massad was confirmed by the U.S. Senate to serve as the Department of Treasury’s Assistant Secretary for Financial Stability. If confirmed to head the CFTC, Massad will play a critical role in the regulation of derivatives, an area that has received heavy pushback from his former … Continue reading →

By Pam Martens: November 11, 2013 It’s time to visit the musty shelves of those rare book stores and ferret out a copy of Charles Mackay’s Extraordinary Popular Delusions and the Madness Of Crowds, or simply buy a reprinted version. Mackay’s book was first published in 1841and takes a hard look at greed-based manias like the tulip bubble in Holland in the 1600s and the South Sea bubble in the early 1700s. At the peak of the tulip bubble in 1637, it is reported that a single tulip bulb sold for many times the annual wage of a skilled laborer. The South Sea bubble was built around the British South Sea Company which seduced investors with the vision of great wealth from trade with South America. The company’s share price collapsed in the early 1700s, seriously impacting the British economy. Subsequent investigations revealed bribes and trading manipulations to pump up … Continue reading →

By Pam Martens: April 1, 2013 If you’re a citizen residing in the Southern District of New York, be aware that if you break the law you are likely to land in prison. On the other hand, if you’re a too big to jail Wall Street bank, chances are quite good that you’ll walk. In 2010, Judge Naomi Reice Buchwald sentenced former New York State Assemblyman Tony Seminerio to six years in prison for shaking down hospital officials in his district in a $1 million scheme to collect consulting fees for work his office should have provided at no charge. In 2011, Seminerio died in prison at age 75. This past Friday, heading into the Easter holiday weekend when the public’s focus is elsewhere, Judge Buchwald handed down 161 pages of a tortured decision that twisted both logic and law into a pretzel in order to arrive at the bizarre … Continue reading →

By Pam Martens: August 18, 2012 Yesterday, at 1:29 p.m., the following headline appeared at the on-line Wall Street Journal: “Morgan Stanley Distributes Facebook IPO Profits.”  The headline was curious, because at 11 a.m. Facebook was trading at 19 bucks a share, exactly half its initial public offering (IPO) price in May. (The stock closed at $19.05, a nickel beyond half its IPO price of $38.)  The article was written by Lynn Cowan, an outstanding veteran Wall Street reporter.  Cowan writes the “IPO Outlook” column for the Wall Street Journal, graduated magna cum laude from Montclair State University and received a Master’s degree in journalism from Columbia University.   If Cowan says Morgan Stanley had profits to distribute, she must be on to something.  As it turns out, the profits, according to Cowan, were a whopping $100 million or thereabouts and were not fees or commissions from the IPO underwriting but … Continue reading →

By Pam Martens: August 11, 2012  There is growing evidence that Wall Street and other corporate money is finding its way into the pockets of business reporters today, just as evidence surfaced in 1932 of bribes to reporters at the New York Daily News, Wall Street Journal, New York Times, New York Herald Tribune, New York Evening Post and others.  Yesterday, Yasha Levine and Mark Ames of ExiledOnLine.com published a stunning investigative report of a deeply compromised Adam Davidson, host of NPR’s Planet Money.  On September 12, 2011, we reported that CNBC’s Larry Kudlow had pocketed $332,500 from the Koch funded Mercatus Center without disclosing it to viewers of his program.   On July 2 of this year, we reported that Andrew Ross Sorkin, of the New York Times and CNBC, attempted to downplay the need for restoring the Glass-Steagall Act by reporting that Lehman Brothers, Merrill Lynch, and AIG had … Continue reading →

By Pam Martens: August 10, 2012  According to an SEC filing made by JPMorgan Chase yesterday, the firm is being sued by its retirees, its customers, its shareholders, the City of Baltimore, Jefferson County Alabama, the City of Milan, the trustee for Madoff’s assets, MF Global’s customers and securities holders,  the creditors of Lehman Brothers, an Enron investor and counterparty, traders in Libor and Euribor financial instruments, and on and on.  JPMorgan’s own employees attempted to sue the firm over losses in their 401(k) plan related to Enron but according to the filing it has been dismissed: “A purported class action filed on behalf of JPMorgan Chase employees who participated in the Firm’s 401(k) plan asserting claims under ERISA for alleged breaches of fiduciary duties by JPMorgan Chase, its directors and named officers was dismissed, and the dismissal was affirmed by the United States Court of Appeals for the Second … Continue reading →