How To Run Drug Money: Be A (Large) Bank
by ilene - June 30th, 2010 3:32 pm
How To Run Drug Money: Be A (Large) Bank
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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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Organized Crime
by ilene - March 1st, 2010 10:05 pm
Hilarious…
Organized Crime
Courtesy of Adam Sharp’s Bearish News
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Michael Milken, 60,000 Deaths, and the Story of Dendreon
by ilene - July 23rd, 2009 7:27 pm
It’s very been very exciting to bring terrific new authors together at Phil’s Favorites and today I’m pleased to welcome Mark Mitchell of Deep Capture to our site. Mark’s written a fascinating account of the real story behind Dendreon’s (DNDN) most unusual trading activity in recent years. Here’s the first chapter of Mark’s 15 part series. – Ilene
Michael Milken, 60,000 Deaths, and the Story of Dendreon (Chapter 1 of 15)
Courtesy of Mark Mitchell at Deep Capture
What follows is part 1 of a 15-part series. The remaining installments will appear on Deep Capture over the next several weeks, after which point the story will be published in its entirety. It is a story about the travails of just one small company, but it describes market machinations that have affected hundreds of other companies, and it contains a larger message for anyone concerned about the “deep capture” of our nation’s media and regulatory bodies.
This story, like too many others, begins with Jim Cramer, the CNBC personality, making “a mistake.”
On September 26, 2005, Cramer announced to his television audience the sad news (punctuated by funny sound effects – a clown horn, a crashing airplane) that Provenge, an experimental treatment for prostate cancer, had flopped. Thousands of end-stage patients had been pinning their hopes on Provenge, but according to Cramer the treatment had just been rejected by the Food & Drug Administration. It would never go to market.
This seemed odd, because Dendreon (NASDAQ: DNDN), the company developing Provenge, had not yet submitted an application for FDA approval. As everybody in the biotech investment community knew, Dendreon had, in fact, only recently completed Phase 3 clinical trials and probably would not face scrutiny from an FDA advisory panel for at least another year.
As for the likelihood that the advisory panel would eventually vote in favor of Provenge, the odds looked quite good. The Phase 3 trials had demonstrated that Provenge significantly increased patient survival with only minimal side-effects, such as a few days of mild fever. Moreover, Provenge was an altogether different sort of treatment – one that fought tumors by boosting patients’ immune systems rather than subjecting them to the ravages of chemotherapy.
Provenge was not a magical elixir of life, but Dendreon was doing more than just developing a new technology. It…
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the site