Four years ago, I began representing victims of fraudulent schemes who filed suits against banks for providing the financial services that were essential to perpetrating the fraud. We developed our case on the theory that the banks (some of the largest in the land) aided and abetted the fraud. These cases seemed like “no brainers.” … Continue Reading
Tag Archives: big banks
WATCH IT: PBS’s The Untouchables Asks Why No Wall Street Executive Have Been Criminally Prosecuted for Loan Fraud
Posted in Banks and Financial ServicesThe Untouchables, PBS’ Frontline investigation into why no Wall Street executives have gone to jail for activities connected to the housing and financial sector in 2008, recently aired. I took the time to watch it and strongly encourage each one of you to do the same –paints a very clear picture, in less than an… Continue Reading
The Insider Trader Circle Tightens Around Billionaire Steven Cohen and His Hedge Fund, SAC Capital
Posted in Banks and Financial ServicesAn article in the New York Times’ Dealbook shines a spotlight on a situation I’ve been keeping a close watch on for some time now: billionaire Steven A. Cohen and his group/company/fund, SAC Capital Advisors. This is the hedge fund that was found to have achieved 30% investment returns for the past two decades, or,… Continue Reading
SEC Takes a Bold Stance Against Auditors
Posted in Banks and Financial ServicesYesterday the SEC took a relatively unique stance against two auditors at KPMG. Yes, that’s right, the auditors; not the bank itself or the bankers that led their Nebraska-based bank into bankruptcy. While the SEC cannot file charges or impose fines upon auditors, by instituting administrative proceedings for engaging in improper professional conduct the SEC… Continue Reading
Is $8.5 Billion Enough to Prevent Mortgage Fraud in the Future?
Posted in Banks and Financial ServicesYou would think that an $8.5 billion settlement would be enough to make up for most bad behavior. But in the case of the recent settlement federal regulators reached with ten of the nation’s largest mortgage servicing companies, including well-known banks such as Bank of America, Citibank, JP Morgan Chase, and Wells Fargo, I’m not… Continue Reading
Criminal Charges for Criminal Activity in the Financial Industry: Finally
Posted in Banks and Financial ServicesWell its about time. For the first time in over twenty years, a major financial institution pleaded guilty to criminal charges brought by the DOJ (the last time was in 1989 when Drexel Burnham Lambert pleaded guilty to six counts of fraud). Yesterday, the DOJ announced that: “UBS Securities Japan Co. Ltd. (UBS Japan), an… Continue Reading
Senators Fault DOJ’s Failure to Prosecute Terrorist-Money Launderer HSBC Bank
Posted in Banks and Financial ServicesIf the DOJ catches someone laundering money for terrorists, I would expect that person to be on the receiving end of some very aggressive prosecution. I wouldn’t want to see that person walk away – I would expect jail time or an equally serious form of punishment. We would all be outraged if the DOJ… Continue Reading
UBS Banking Scandal Sheds Light on Big Bankings’ Culture Problems
Posted in Banks and Financial ServicesThis week the trial of former UBS trader Kweku Adoboli, arrested in September 2011 on charges of fraud and false accounting, takes center stage in the banking world. Adoboli was arrested in connection with a $2 Billion trading loss at UBS in 2011. Adoboli had been contacted by compliance officers with questions about some of… Continue Reading
Aiding Drug Lords, Terrorists, and Rogue Nations Should Not Be Profitable… Ever
Posted in Banks and Financial ServicesA few months ago we were astounded to see HSBC actually apologize for its money laundering scheme, in which it “aided drug lords, terrorists, and rogue nations” by helping them launder money through HSBC banks. Today’s New York Times reports that HSBC’s earnings are down $3.3 Billion for the last quarter. Some of these expenses… Continue Reading
Bankers – Not Banks – Must Be Regulated As Professionals
Posted in Banks and Financial ServicesBankers behaving badly, ho hum. We’ve written about it time and again. One day it’s manipulating the LIBOR rate to cheat their own customers, the next day its packaging questionable mortgages into risky securities and oops failing to disclose what they know to investors; or providing banking services, aid, and comfort to one Ponzi schemer… Continue Reading
Bankers and Politicians Disapprove of Dodd-Frank, but Is There Really an Alternative?
Posted in Banks and Financial ServicesFollowing recent lawsuits, court decisions, and presidential debates, more Americans than ever are becoming familiar with the Dodd-Frank Act, which was passed in 2010 to increase the government’s ability to regulate big banks. Many politicians and lobbyists have argued for repealing the Dodd-Frank Act, but a recent New York Times editorial poses an interesting question:… Continue Reading
The Devil is in the Details: Federal Reserve Governor Daniel Tarullo Addresses Systemic Risk
Posted in Banks and Financial ServicesThere has been a lot of discussion lately over whether or not our nations HUGE banking and financial institutions should be broken up. Current and former Wall Street insiders, scholars, regulators and a host of others have all offered their opinion – and over the past few months the tide seems to have been shifting… Continue Reading
Government Prosecutors Get Creative to Hold Wells Fargo Accountable for Mortgage Fraud
Posted in Banks and Financial ServicesThe United States filed suit against banking and mortgage giant Wells Fargo Tuesday, for allegedly lying to the Federal Housing Administration about mortgages Wells Fargo approved during the housing boom. Not only did Wells Fargo approve mortgages for people who would not likely be able to pay them, they told the FHA that the mortgages… Continue Reading
The Volker Rule: Politicians and Lobbyists Attempt to Influence the Fed from Behind Closed Doors
Posted in Banks and Financial ServicesIt isn’t exactly breaking news that big bankers don’t like the Volcker rule. After all, it is designed to protect consumers, and ideally the industry itself, from engaging in risky trades that could, if successful, line the pockets of bankers. So it should come as no surprise that the industry is fighting to get some… Continue Reading
Turning Independence On Its Head: Proposed Bill S. 3468 Would Paralyze the CFPB, the SEC, the EPA …
Posted in Banks and Financial Services, Consumer ProtectionModerate and respected Senators Rob Portman (R-OH), Mark Warner (D-VA), and Susan Collins (R-ME) issued a press release on August 1st describing their proposed bill S. 3468, the “Independent Agency Regulatory Analysis Act of 2012.” For all intents and purposes the bill seeks to take the “independence” out of “Independent Regulatory Agencies”. That’s right. Who… Continue Reading
Consumer Advisory Board: Great Name, Now What Will it DO?
Posted in Banks and Financial Services, Consumer ProtectionThe CFPB recently announced the creation of their new Consumer Advisory Board. Created under the Dodd-Frank act, the Consumer Advisory Board is intended to be “a key resource” for the CFPB according to director Richard Cordray. But will this new advisory board really be an asset to consumers, or just another piece of showy government… Continue Reading
Does Banking Complexity Make Your Eyes Bleed?
Posted in Banks and Financial ServicesI’ve heard a lot of people describe the current state of our country’s largest financial institutions. I frequently hear things like “too complex,” “too big,” or “in desperate need of an overhaul.” But Sallie L. Krawcheck, former head of Bank of America’s wealth management division, gave a description yesterday that takes the cake: “It is… Continue Reading
The Dodd Frank Delay: Necessary Extension or a Sign of Industry Influence?
Posted in Banks and Financial ServicesWe were all happy to see the Dodd Frank act of 2010 come to pass, but unfortunately, as the New York Times reported this week, the CFTC is pushing back the deadline for banks to comply. The CFTC released a statement Monday, announcing a package of reforms on derivatives trading, a notoriously dark corner of… Continue Reading
Citigroup Complains to the SEC About Conflicts of Interest, Just Not its Own
Posted in Banks and Financial ServicesIt is fascinating to watch the banking and finance industry pointing fingers at each other for the botched Facebook IPO. Yesterday, attempts to shift blame and recover some losses led to some wonderful quotes from Citigroup. The New York Times’ Dealbook recently summed up Citigroup’s position: “Citigroup on Wednesday also criticized Nasdaq’s claim that its… Continue Reading
Recidivist Money Launderer Standard Chartered Bank Walks Away With A Slap on the Wrist
Posted in Banks and Financial ServicesIt’s easy to take pot shots at regulators. They didn’t find out soon enough; they need to be tougher. Sure, when you are on the sidelines or reporting on Monday morning, it’s easy to criticize. But the recent case of Standard Chartered Bank is baffling and worthy of second guessing to be sure. They were… Continue Reading
Senators Propose a “Sliding Scale” For Regulating Banks
Posted in Banks and Financial ServicesI’m glad to read that it is not just me that has noticed the abnormally high number of bank-related scandals that have broken over the past couple months. I’ll do a quick highlight review to refresh our memory. First, we had JP Morgan (the biggest U.S.-based bank with $2.29 trillion in assets) reveal an increasingly… Continue Reading
The Silver Lining to Failure on Wall Street?
Posted in Banks and Financial ServicesScanning headlines today, I saw words that I never thought would go in the same sentence together: “In $440 Million Trading Error, Upside of Wall St. Failures.” An upside? To a Wall Street Failure? Well, this New York Times article argues that failure in the financial system actually helps to improve the financial system, a… Continue Reading
Too Bad the SEC Can’t Put Citigroup in Jail
Posted in Banks and Financial Services, In the CourtsI’m still trying to understand the SEC’s decision making process in deciding to charge Mr. Brian H. Stoker, former Citigroup banker, in connection with a subprime mortgage-related debacle at Citigroup. In this offering, Citigroup bet against one of its own securities, which subsequently lost most of its value and has since been described using bad… Continue Reading
Big Banks as the Organized Mob?
Posted in Banks and Financial ServicesAt what point will banking scandals stop being scandalous and start garnering of-course-they-did-that reactions? The last couple weeks we saw the Libor scandal unfold to include a growing number of large, well known names in banking. Their rate-fixing activities are likely going to lead to a number of lawsuits – dozens have already been filed… Continue Reading