Posts Tagged ‘money laundering’

Become a Big Bank, Ignore The Law

Become a Big Bank, Ignore The Law

Courtesy of Karl Denninger at The Market Ticker 

I guess it’s not enough to rip off municipalities and be the funding source for drug cartels in Mexico who shoot people (including police officers), right?

When the government began rescuing it from collapse in the fall of 2008 with what has become a $182 billion lifeline, A.I.G. was required to forfeit its right to sue several banks — including Goldman, Société Générale, Deutsche Bank and Merrill Lynch — over any irregularities with most of the mortgage securities it insured in the precrisis years.

But after the Securities and Exchange Commission’s civil fraud suit filed in April against Goldman for possibly misrepresenting a mortgage deal to investors, A.I.G. executives and shareholders are asking whether A.I.G. may have been misled by Goldman into insuring mortgage deals that the bank and others may have known were flawed.

Absolutely correct.

If you’re a big bank, when things go south the government will force those who dealt with you to give up their right to sue you for your misrepresentations!

“This really suggests they had myopia and they were looking at it entirely through the perspective of the banks,” Mr. Skeel said.

No, it says in plain English that if you’re a bank there are no laws. 

There are no laws about money-laundering that will be enforced.

There are no laws about bribery that will be enforced.

There are no laws about bid-rigging that will be enforced.

There are no laws about emitting fraudulent securities that will be enforced.

And there are no laws about intentionally screwing counterparties that will be enforced.

Everyone else has to follow these laws.

But if you’re a big bank, you can do all these things and more, and there is absolutely no criminal or civil enforcement available to anyone to do anything about it.

May I ask, quite politely, why the American public peacefully accepts this state of affairs? 

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Picture credits: Jr. Deputy Accountant 


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How To Run Drug Money: Be A (Large) Bank

How To Run Drug Money: Be A (Large) Bank

Courtesy of Karl Denninger of The Market Ticker 

Oh, so the banks don’t just bilk investors and rip off municipalities, they also help Mexican Gangs run drugs?

This was no isolated incident. Wachovia, it turns out, had made a habit of helping move money for Mexican drug smugglers. Wells Fargo & Co., which bought Wachovia in 2008, has admitted in court that its unit failed to monitor and report suspected money laundering by narcotics traffickers — including the cash used to buy four planes that shipped a total of 22 tons of cocaine.

The admission came in an agreement that Charlotte, North Carolina-based Wachovia struck with federal prosecutors in March, and it sheds light on the largely undocumented role of U.S. banks in contributing to the violent drug trade that has convulsed Mexico for the past four years.

That’s nice.  Guns and ammunition cost money – lots of it.  Getting that money requires some means of transporting it and "laundering" it.  For that, we turn to the largest financial institutions in the world, who, it turns out, have never been prosecuted for these felonious acts.

“Wachovia’s blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations,” says Jeffrey Sloman, the federal prosecutor who handled the case.

Blatant disregard?  Sounds like something you’d say at a sentencing hearing, right?  Well, no….

No big U.S. bank — Wells Fargo included — has ever been indicted for violating the Bank Secrecy Act or any other federal law. Instead, the Justice Department settles criminal charges by using deferred-prosecution agreements, in which a bank pays a fine and promises not to break the law again.

‘No Capacity to Regulate’

Large banks are protected from indictments by a variant of the too-big-to-fail theory.

Indicting a big bank could trigger a mad dash by investors to dump shares and cause panic in financial markets, says Jack Blum, a U.S. Senate investigator for 14 years and a consultant to international banks and brokerage firms on money laundering.

The theory is like a get-out-of-jail-free card for big banks, Blum says.

“There’s no capacity to regulate or punish them because they’re too big to be threatened with failure,” Blum says. “They seem to be willing to do anything that improves their bottom line,


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EXPLOSIVE: AIG Bailout Flat-Out Illegal?

EXPLOSIVE: AIG Bailout Flat-Out Illegal?

Courtesy of Karl Denninger at The Market Ticker

Money hung out on laundry line

Big government has presented an explosive story related to AIG and The NY Fed in which the claim is made that the trust agreement that established AIG’s "grab" by The NY Fed was in fact outright unlawful:

This afternoon on Secure Freedom Radio we announced a breaking news story concerning the Administration’s ongoing cover-up of AIG financial wrong-doing.  In an interview with David Yerushalmi, senior litigator on the Murray v. Geithner et al lawsuit, we expose possible fraud, money-laundering and criminal activity.

Money laundering?!

I looked at the source document folks – and while most of it looks ok, there’s one little line in the trust agreement that might be the problem referred to - specifically, here: 

Section 1.03. Trust is Irrevocable. This Trust Agreement and the Trust shall be irrevocable and, except as provided in Section 5.01 hereof, unamendable except that the Board of Governors may terminate or amend its authorization pursuant to Section 13(3) of the Federal Reserve Act, thereby revoking or amending the Trust in accordance with Federal law, provided, however, that a Trustee’s rights to resign as a trustee hereunder and to compensation and indemnification with respect to acts or omissions occurring prior to any such revocation or amendment may not be modified without the written consent of that Trustee.

A trust of this sort, to be lawful, has to be irrevocable – you can’t reserve the ability to modify it later.  The NY Fed knew they didn’t have the authority to take equity – thus, these "trust" agreements.

I’ll note for the peanut gallery that I’m not an attorney, but I do have a reasonable understanding of the requirements for an irrevocable trust of this general sort to be valid.  A phone call with the plaintiff’s attorney, David Yerushalmi this morning confirmed that this indeed was the primary problem.  Mr. Yerushalmi went on to assert that this establishes a prima-facie violation of the money laundering statute -  an extremely serious allegation as that law, if violated, carries very heavy criminal penalties.

There is also apparently a second issue in that the beneficiary is named as The US Treasury, which is, effectively, a bank account and not a "person or entity."  That’s a potential problem too although I can see the…
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77 Fraud, Money Laundering, Insider Trading, and Tax Evasion Investigations Underway Regarding TARP

My belief is the benefits of TARP and the entire alphabet soup of lending facilities was not as stated by Bernnake and Geithner, but rather to shift as much responsibility as quickly as possible on to the backs of taxpayers while trumping up nonsensical benefits of doing so. This was done to bail out the banks at any and all cost to the taxpayers. – Mish

77 Fraud, Money Laundering, Insider Trading, and Tax Evasion Investigations Underway Regarding TARP

Courtesy of Mish

Magnifying glass over US dollar bills

Inquiring minds are reading the SIGTARP Quarterly Report To Congress. The report is a massive 224 pages long. I will do my best to condense it down to the critical highlights involving Fraud, Money Laundering, Insider Trading, etc.

Let’s start with the SIGTARP mission, then the findings. 

Mission

SIGTARP’s mission is to advance economic stability by promoting the efficiency and effectiveness of TARP management, through transparency, through coordinated oversight, and through robust enforcement against those, whether inside or outside of Government, who waste, steal or abuse TARP funds.

Let’s dive into the 224 page report and see how well TARP, and the alphabet soup of lending facilities met their stated goals. 

On the positive side, there are clear signs that aspects of the financial system are far more stable than they were at the height of the crisis in the fall of 2008. Many large banks have once again been able to raise funds in the capital markets, and some institutions — including some that appeared to be on the verge of collapse — have recovered sufficiently to repay their TARP investments years earlier than most would have predicted. These repayments and the sales of the warrants associated with them have meant that Treasury (and thus the taxpayer) has turned a profit on some of the individual TARP investments; as a result of these repayments, among other positive developments, it now appears that the ultimate cost of TARP to the American taxpayer, while still substantial, might be significantly less than initially estimated.

Mish: The idea that there are "profits" is fictitious. It’s effectively praising making 10 cents on a dollar while not counting hundreds of $billions lost on AIG and Fannie Mae, and ignoring $300 billion worth of loan guarantees at Citigroup still in effect.

Moreover, the only reason banks…
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Zero Hedge

American Airlines Slated To Drop Dozens Of Flights To Smaller Cities As Government Aid Dries Up

Courtesy of ZeroHedge View original post here.

With the government set to stop subsidizing the industry, airlines are gasp> actually going to have to make operational changes to effectively deal with the lack of demand. Oh, the horror of free market forces actually forcing companies to make business changes!

This starts with American Airlines, who is reportedly preparing to drop two dozen small and medium city flights as federal coronavirus aid is set to end. The aid had previously mandated that airlines were not allowed to cut service ...



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ValueWalk

Coronavirus stimulus checks talks fall apart as Congress goes on vacation

By Michelle Jones. Originally published at ValueWalk.

Our predictions regarding the coronavirus stimulus checks and related relief appears to be correct. Congress has abdicated its duty and gone on vacation while Americans await unemployment and other related stimulus programs. While the action is hard to fathom, there is a good chance the market will crash or other pressure will bring the sides together sooner than the current schedule of September 8th.

Prior coverage

The two sides continue to drift apart on the bill over Coronavirus stimulus checks and relief legislation. From a game theory perspective, I believe the Democrats are in the driver’s seat. If the bill is not passed, the economy will crash further and lead to certain electoral losses for Trump and the GOP. Therefore, the Democrats have little incentive to push for a speedy passage of the bill.

...



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Phil's Favorites

Rapid screening tests that prioritize speed over accuracy could be key to ending the coronavirus pandemic

 

Rapid screening tests that prioritize speed over accuracy could be key to ending the coronavirus pandemic

Broad and frequent screening could catch coronavirus cases before they can spread to others. Vaidas Bucys/EyeEm via Getty Images

Courtesy of Zoë McLaren, University of Maryland, Baltimore County

Broad access to testing is one of the most powerful tools to keep the COVID-19 pande...



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Biotech/COVID-19

Rapid screening tests that prioritize speed over accuracy could be key to ending the coronavirus pandemic

 

Rapid screening tests that prioritize speed over accuracy could be key to ending the coronavirus pandemic

Broad and frequent screening could catch coronavirus cases before they can spread to others. Vaidas Bucys/EyeEm via Getty Images

Courtesy of Zoë McLaren, University of Maryland, Baltimore County

Broad access to testing is one of the most powerful tools to keep the COVID-19 pande...



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Kimble Charting Solutions

Silver Could Be Creating Large Reversal Pattern, Says Joe Friday

Courtesy of Chris Kimble

Could Silver prices from 30-years ago be influencing price action this month? Joe Friday suggests it is possible.

This chart looks at Silver Futures on a monthly basis over the past 40-years. Fibonacci levels were applied to the 1980 highs ($50) and 1991 lows ($.350) in Silver.

The 50% retracement levels of the 1980 high/1991 low came into play as support for a few months at each (1). Once this support broke, Silver fell another 50%.

The impressive rally over the past 8-weeks has Silver testing the 50% retracement level as potential...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Chart School

Silver Big Channel

Courtesy of Read the Ticker

Big channels are the sand pit of price action. Lets review some big trends of these past months.


GLD
- Moving higher to upper solid red line channel


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XAU
- Ready to pause, or simply explode.



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SILVER
- Ready to pause, or simply explode.


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Digital Currencies

Raoul Pal: "It May Not Be Worth Owning Any Asset Other Than Bitcoin"

Courtesy of ZeroHedge View original post here.

Authored by Turner Wright via CoinTelegraph.com,

Raoul Pal, CEO and founder of Real Vision, says Bitcoin may soon become his only asset for long-term investments.

image courtesy of CoinTelegraph ...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Members' Corner

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

 

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

No matter the details of the plot, conspiracy theories follow common patterns of thought. Ranta Images/iStock/Getty Images Plus

Courtesy of John Cook, George Mason University; Sander van der Linden, University of Cambridge; Stephan Lewandowsky...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

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