The Corporate Observer Blog : Consumer Protection, Corporate Abuse : Class Action Lawyer & Attorney : Steven Berk Law Firm

Pop Quiz: Who has the most influence over the world’s financial markets?

Tim Geithner, Ben Bernanke, our beloved Elizabeth Warren, new kid on the block, IMF Chief, Christine Lagarde, or Goldman Sach CEO Lloyd Blankfein?

Answer: None of the above.

The Answer: Raymond McDaniel and Deven Sharma...  ...  Wait, who?

McDaniel and Sharma, CEO’s respectively of Moody’s and Standard & Poor's.  Remember not long after they lost all credibility by time and again pulling those green eye shades over their eyes, holding their noses and giving every subprime, no-document, securitized mortgage bond fund a rating of investment grade.  Yep.  Brought us to the brink, to the edge; and although there was some talk of “clipping their wings” in the halls of Congress, it is too late now.   They are back and even more powerful.  But this time they are singing a new tune.  Despite cries of foul and fear their now conservative practices will cause another financial apocolypse, they will not stand down.  Look at what they are doing in Europe; the credit rating agencies (“CRAs”) face intense international pressure over their “junk” ratings of Greek, Portuguese and Irish debt, yet they steadfastly refuse to back down.

Now they seem to have their sights on the U.S. Debt as they threaten to downgrade trillions of dollars in Treasury bonds to below AAA.  Forget Congress, these are the guys to watch.  They scare me, they are too powerful, and a little bit sinister.  How can we trust their insistence on downgrading debt when just a couple of years ago they would have presumably graded a fistful of discarded “Powerball” tickets AAA. I’m not being paranoid, am I?

I say Congress should move forward with hearings before these CRAs push us once again to the brink, because I fear this time, we are going over the edge. 

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 “Instead of writing Secretary Geithner, what Congressman Sestak really needs to do is use his good offices to propose legislation creating a private right of action to curb TARP abuses.” 

Recently, Representative Joe Sestak (D-Pa) opined on The Hill’s Congress Blog that we need more oversight and transparency for TARP funds.  You think???  Of course we do.  It is the largest federal spending program in a generation.

Back in July, I called attention to this issue, seeking to protect Main Street from being victimized once again.  I want to congratulate Congressman Sestak for seeing the light on this issue.  In a time when it’s easy to doubt Capitol Hill, it is refreshing to see Mr. Sestak focused on protecting Main Street.

Surely one method of protecting Main Street, as Mr. Sestak points out, is enhanced transparency regarding the use of TARP funds.  But transparency – perhaps the most popular word in politics – is hardly going to be enough.

We have a brewing crisis, complaint numbers (each of which requires investigation) are off the charts and incentives are still strong for companies to misuse TARP funds.  As commendable as it is that Mr. Sestak calls attention to this critical issue, his effort will fall short of helping Main Street.  Put bluntly, a single letter to Treasury Secretary Geithner may help with your constituents but it won’t hinder the fraud and abuse lurking in the TARP program. 

Back in July, already thousands of tips were received concerning possible fraud.  The government can’t investigate everyone, but private attorneys can and need the right and incentive to do so. 

Instead of writing Secretary Geithner, what Congressman Sestak really needs to do is use his good offices to propose legislation creating a private right of action to curb TARP abuses.  Give the thousands of hungry, young, talented and committed attorneys in this country a chance to help both themselves and Main Street by zealously pursuing abuses of TARP funds. 

Congressman, we stand ready to help you draft that legislation.  It is time.  You would be doing a great service to the millions of Americans who were forced to shoulder the financial consequences of Wall Street abuse.

Assisted by David Martin and Jessica Begen

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