By DANNY KING Posted 6:00 PM 10/06/10
Posted on 07 October 2010.
By DANNY KING Posted 6:00 PM 10/06/10
Posted on 28 March 2010.
By William Selway and Martin Z. Braun
March 26 (Bloomberg) — JPMorgan Chase & Co., Lehman Brothers Holdings Inc. and UBS AG were among more than a dozen Wall Street firms involved in a conspiracy to pay below-market interest rates to U.S. state and local governments on investments, according to documents filed in a U.S. Justice Department criminal antitrust case.
A government list of previously unidentified “co- conspirators” contains more than two dozen bankers at firms also including Bank of America Corp., Bear Stearns Cos., Societe Generale, two of General Electric Co.’s financial businesses and Salomon Smith Barney, the former unit of Citigroup Inc., according to documents filed in U.S. District Court in Manhattan on March 24.
The papers were filed by attorneys for a former employee of CDR Financial Products Inc., an advisory firm indicted in October. The attorneys, as part of their legal filing, identified the roster as being provided by the government. The document is labeled “list of co-conspirators.”
None of the firms or individuals named on the list has been charged with wrongdoing. The court records mark the first time these companies have been identified as co-conspirators. They provide the broadest look yet at alleged collusion in the $2.8 trillion municipal securities market that the government says delivered profits to Wall Street at taxpayers’ expense.
“If the government is saying they are co-conspirators, the government believes they have sufficient evidence that they can show they were part of the conspiracy,” said Richard Donovan, a partner at New York-based law firm Kelley Drye & Warren LLP and co-chair of its antitrust practice. Donovan isn’t involved in the case.
The government’s case centers on investments known as guaranteed investment contracts that cities, states and school districts buy with the money they receive through municipal bond sales. Some $400 billion of municipal bonds are issued each year, and localities use the contracts to earn a return on some of the money until they need it for construction or other projects.
The Internal Revenue Service sometimes collects earnings on those investments and requires that they be awarded by competitive bidding to ensure that governments receive a fair return. The government charges that CDR ran sham auctions that allowed the banks to pay below-market interest rates to local governments.
CDR Fights Case
CDR, a Los Angeles-based local-government adviser, was indicted in October along with David Rubin, Zevi Wolmark and Evan Zarefsky, three current or former executives. The company and the three men have denied wrongdoing. Since last month, three former CDR employees who weren’t charged in the initial indictment have pleaded guilty and agreed to cooperate with the Justice Department.
More than a dozen financial firms are also facing civil suits filed by municipalities over the alleged conspiracy. Yesterday, U.S. District Judge Victor Marrero in Manhattan refused to toss out a lawsuit brought by Mississippi and other bond issuers.
Brian Marchiony, a spokesman for JPMorgan in New York; Doug Morris, a spokesman for UBS in New York; and Danielle Romero- Apsilos, a spokeswoman for Citigroup in New York, all declined to comment. A Societe Generale spokesman, Jim Galvin; Lehman spokeswoman Kimberly MacLeod, and GE Capital spokesman Ned Reynolds in Stamford, Connecticut, also declined to comment. Bank of America spokeswoman Shirley Norton in San Francisco declined to comment. Bear Stearns was bought by JPMorgan in 2008, the same year Lehman Brothers collapsed.
Laura Sweeney, a Justice Department spokeswoman in Washington, declined to comment.
Banks may choose to cooperate with prosecutors because in light of the government bailout funds they’ve received “a guilty plea would just be an absolute disaster for some of these companies,” said Nathan Muyskens, a partner at Shook, Hardy & Bacon in Washington and former trial attorney with the Federal Trade Commission’s Bureau of Competition.
“There have been antitrust investigations where there have been companies involved that were just never indicted,” he said in a phone interview.
At the same time, the government will probably focus on seeking to convict individual bankers, he said.
“When someone goes to jail for five years, that resonates,” he said. “When a company pays $200 million, it’s simply a balance sheet issue. Jail time is what captures corporate America’s attention.”
In a court filing yesterday, defense lawyers said they “inadvertently” included the names of individual and company co-conspirators in a motion asking the court to compel the government to provide more specific evidence of the alleged misconduct. They asked the court to strike the entire exhibit in which the list appears. Judge Marrero granted the request.
The government’s probe became public in 2006 when federal investigators raided CDR and two competitors and issued subpoenas to more than a dozen firms. The “co-conspirators” on the list released in court this week also included Wachovia Corp., which was purchased by San Francisco-based Wells Fargo & Co. in 2008. Elise Wilkinson, a Wells Fargo spokeswoman in Charlotte, North Carolina, didn’t return a call today seeking comment.
The indictments released in October didn’t identify any of the sellers of the investment contracts involved in the alleged conspiracy. They were identified only as Provider A and Provider B. They paid kickbacks to CDR after winning investment deals brokered by the firm, according to the indictments.
The firms did this by paying sham fees tied to financial transactions entered into with other companies, prosecutors said. Kickbacks were paid from 2001 to 2005, ranging from $4,500 to $475,000 each, according to the Justice Department.
According to the list contained in the court filing this week, the investment contracts involved were created by units of GE and divisions of Financial Security Assurance Holdings Ltd., a bond insurer formerly part of Brussels-based lender Dexia SA.
The kickbacks were paid out of fees generated by transactions entered into with two financial institutions that weren’t identified in the October court filing. The March 24 list filed by the defense named the two firms as UBS and Royal Bank of Canada.
Dexia completed the sale of FSA’s bond-insurance business in July to Assured Guaranty Ltd. of Hamilton, Bermuda, while retaining its outstanding investment contracts.
Thierry Martiny, a spokesman for Dexia in Brussels, declined to comment. FSA, based in New York, was the biggest insurer of U.S. municipal bonds in 2007 and 2008.
“We have no comment,” said Betsy Castenir, a spokeswoman for Assured Guaranty in New York, in an e-mail response. “Dexia has responsibility for the liabilities of the Financial Products business.”
Royal Bank of Canada “has been fully cooperating with the government,” Kevin Foster, a spokesman for the bank in New York, said in an e-mailed statement. “We have no knowledge or evidence of wrongdoing by any of our employees.”
The case is U.S. v. Rubin/Chambers, Dunhill Insurance Services Inc., 09-CR-01058, U.S. District Court, Southern District of New York (Manhattan).
Last Updated: March 26, 2010 13:09 EDT
Posted on 21 March 2010.
William Black, author of “Best way to rob a bank is to own one” talks about deliberate fraud on Wall St. courtesy of TheRealNews
Not all Forensic Auditors are alike! FMI may locate exactly where the loan sits today.
This will make your lender WANT to communicate with you. Discover what they don’t want you to know. Go back in time and start from the minute you might have seen advertisements that got you hooked ” No Money Down” “100% Financing” “1% interest” “No income, No assetts” NO PROBLEM! Were you given proper disclosures on time, proper documents, was your loan broker providing you fiduciary guidance or did they hide undisclosed fees from you? Did they conceal illegal kickbacks? Did your broker tell you “Don’t worry before your new terms come due we will refinance you”? Did they inflate your appraisal? Did the developer coerce you to *USE* a certain “lender” and *USE* a certain title company?
If so you need a forensic audit. But keep in mind FMI:
DO NOT STOP FORECLOSURE
DO NOT NEGOTIATE ON YOUR BEHALF WITH YOUR BANK OR LENDER
DO NOT MODIFY YOUR LOAN
DO NOT TAKE CASES that is upto your attorney!
FMI does however, provide your Attorney with AMMO to bring your Lender into the negotiation table.
Posted in bank of america, bernanke, chase, citi, concealment, conspiracy, corruption, fdic, FED FRAUD, federal reserve board, FOIA, foreclosure mills, forensic mortgage investigation audit, fraud digest, freedom of information act, G. Edward Griffin, geithner, indymac, jpmorgan chase, lehman brothers, Lynn Szymoniak ESQ, MERS, Mortgage Foreclosure Fraud, nina, note, onewest, scam, siva, tila, title company, wachovia, washington mutual, wells fargo0 Comments
Posted on 17 March 2010.
This in combination with A.K. Barnett-Hart’s Thesis make’s one hell of a Discovery.
Discussion Paper No. 612
Harvard Law School Cambridge, MA 02138
This paper explores the economic and legal causes and consequences of recent difficulties in the subprime mortgage market. We provide basic descriptive statistics and institutional details on the mortgage origination process, mortgage-backed securities (MBS), and collateralized debt obligations (CDOs). We examine a number of aspects of these markets, including the identity of MBS and CDO sponsors, CDO trustees, CDO liquidations, MBS insured and registered amounts, the evolution of MBS tranche structure over time, mortgage originations, underwriting quality of mortgage originations, and write-downs of investment banks. In light of this discussion, the paper then addresses questions as to how these difficulties might have not been foreseen, and some of the main legal issues that will play an important role in the extensive subprime litigation (summarized in the paper) that is underway, including the Rule 10b-5 class actions that have already been filed against the investment banks, pending ERISA litigation, the causes-of-action available to MBS and CDO purchasers, and litigation against the rating agencies. In the course of this discussion, the paper highlights three distinctions that will likely prove central in the resolution of this litigation: The distinction between reasonable ex ante expectations and the occurrence of ex post losses; the distinction between the transparency of the quality of the underlying assets being securitized and the transparency as to which market participants are exposed to subprime losses; and, finally, the distinction between what investors and market participants knew versus what individual entities in the structured finance process knew, particularly as to macroeconomic issues such as the state of the national housing market. ex ante expectations and the occurrence of ex post losses; the distinction between the transparency of the quality of the underlying assets being securitized and the transparency as to which market participants are exposed to subprime losses; and, finally, the distinction between what investors and market participants knew versus what individual entities in the structured finance process knew, particularly as to macroeconomic issues such as the state of the national housing market.
Posted in bank of america, bear stearns, bernanke, chase, citi, concealment, conspiracy, corruption, credit score, Dick Fuld, FED FRAUD, G. Edward Griffin, geithner, indymac, jpmorgan chase, lehman brothers, mozillo, naked short selling, nina, note, scam, siva, tila, wachovia, washington mutual, wells fargo1 Comment
Posted on 16 March 2010.
This is worth the time to read and watch
Posted on March 14 2010
Michael Lewis’s new book, The Big Short: Inside the Doomsday Machine,is already #1 at Amazon. Tonight he had some very cool interviews on 60 Minutes discussing how a few Wall Street outsiders made billions shorting real estate, his thoughts on Wall Street bonuses, and more. These videos are highly recommended now that the NCAA brackets are out and the tournaments are over until Thursday:
Go HERE for the powerful videos
Posted in bank of america, bear stearns, bernanke, chase, citi, concealment, conspiracy, corruption, FED FRAUD, foreclosure fraud, forensic mortgage investigation audit, G. Edward Griffin, geithner, george soros, hank paulson, indymac, jpmorgan chase, lehman brothers, michael dell, mozillo, naked short selling, nina, note, onewest, RON PAUL, scam, siva, steven mnuchin, tila, wachovia, washington mutual, wells fargo0 Comments
Posted on 13 March 2010.
Go HERE to see where to go to move your money in your area
Posted in bank of america, bear stearns, chase, citi, concealment, conspiracy, corruption, FED FRAUD, geithner, indymac, jpmorgan chase, Mortgage Foreclosure Fraud, onewest, wachovia, washington mutual, wells fargo0 Comments