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"Business culture in the banking industry is favoring, or at least tolerating, fraudulent or unethical behaviors." ~Ernst Fehr
Fehr is an economist at the University of Zürich in Switzerland who co-led a study about business behavior. Fehr's study proves how Wall Street's manipulations are affecting the prices we pay for everything from the cars we drive to our pots and pans.



Wait. So THAT’S what the bailouts were about?
One of the reasons that no one went to jail for the elite control fraud that caused the financial crisis is because of the pervasiveness of the criminality. You couldn’t send one guy to jail without having that guy very publicly rat out everyone else. To get to a high level on Wall Street you had to be dirty, like in a corrupt police department. No one trusts the one guy who won’t take bribes. Which brings us to Maurice “Hank” Greenberg, the former AIG CEO who is now, for lack of a better word, ratting everyone else out.

The Debate Is Over: Banking Has Become a Criminal Enterprise in the U.S.

The underfunded Consumer Financial Protection Bureau, which Republicans in Congress are attempting to neuter further, has received thousands of new complaints against the banking giants of Wall Street, which are publicly available for viewing here. (Just put the name of the bank you want to inspect in the search box.) Searching under the name Citibank brings up 29,000 rows of complaints. A search under Chase, the retail banking unit of JPMorgan Chase, brings up 37,000 rows of complaints.  The seriousness of the complaints against these two banks strongly suggests that the failure to prosecute these banks for frauds against their customers has led to far more than moral hazard. The complaints paint a crystal clear image of a U.S. banking sector that is evolving at lightning speed into an entrenched criminal enterprise.

When the big Wall Street banks collapsed under the weight of their own corruption in 2008, rather than being prosecuted by the Justice Department, the banks were bailed out through a secret, unprecedented $13 trillion revolving loan program operated by the Federal Reserve. Citigroup received the largest amount of these loans: over $2.5 trillion between 2007 and 2010. These loans were made frequently at less than one percent interest while the insolvent Citigroup charged some of its customers double-digit interest rates on credit cards.

Taxpayers Subsidized Wells Fargo Executive Pay Amid Bank’s Fraud

Carrie Tolstedt, an executive who oversaw Wells Fargo’s Community Banking group — where much of the fraud occurred — pocketed millions in “performance pay,” including stock and equity, between 2012-2015.  Under a 1993 law, corporations can deduct no more than $1 million of executive compensation from their taxes. But that law made an exception for pay linked to performance. Consequently, because Wells Fargo structured Tolstedt’s payout as a bonus — rather than wages — the bank could deduct the $78 million from its taxes, effectively giving itself a $27 million tax boost, according to economist Sarah Anderson, who directs the Global Economy Project at the Institute for Policy Studies. In all, Andersen said, Wells Fargo’s Securities and Exchange Commission filings show that in the last four years, its bonus pay packages for top executives effectively gave the bank a nearly $160 million taxpayer subsidy.

We have zero prosecutions – [let alone] convictions – of any of the elite bank frauds, the Wall Street types, that drove this crisis.

William Black is an associate professor of economics and law at UMKC. He has held many prestigious positions, including executive director for Fraud Prevention. He recently helped the World Bank develop anti-corruption initiatives and served as an expert for OFHEO in its enforcement action against Fannie Mae's former senior management. He is a criminologist and former financial regulator.
When the big Wall Street banks collapsed under the weight of their own corruption in 2008, rather than being prosecuted by the Justice Department, the banks were bailed out through a secret, unprecedented $13 trillion revolving loan program operated by the Federal Reserve. Citigroup received the largest amount of these loans: over $2.5 trillion between 2007 and 2010. These loans were made frequently at less than one percent interest while the insolvent Citigroup charged some of its customers double-digit interest rates on credit cards.

1818 H Street, NW Washington, DC 20433 USA (202) 473-1000
Report allegations of fraud and corruption involving World Bank Group-financed operations, supported activities, or staff: Tel: (202) 458-7677




Optimal collusion with private information by Susan Athey and Kyle Bagwell
We show that optimal collusion involves extensive use of “market-share favors,” whereby individual firms are treated asymmetrically as a reward or punishment for past behavior.

"The field of ecCONomics — it's the original Big Data profession. 

But in all these years, it hasn't been able to do much at all. The profession is well regarded and respected despite its collective failure to understand the economy and predict its behavior. After the financial meltdown in 2008, Alan Greenspan, the former Chairman of the Federal Reserve was asked questions by a Washington committee about how the crisis occurred.

He said all his financial models over the past 40 years were wrong. Yet those models informed his adjustment of interest rates, and if they were based on wrong models, he likely harmed the economy, consistently, decade after decade. It's truly an epic fail for Big Data.

It doesn't require much Googling to discover more examples of the deceit of economists and the failure of Big Data:" ~ Tom Foremski #28 on San Francisco - Silicon Valley  Top 50 Most Influential




Bank Supervision

While the emergency response prevented financial collapse, the Fed shouldn’t have allowed conditions to get to that point, says Joshua Rosner, a banking analyst with Graham Fisher & Co. in New York who predicted problems from lax mortgage underwriting as far back as 2001.

The Fed, the primary supervisor for large financial companies, should have been more vigilant as the housing bubble formed, and the scale of its lending shows the “supervision of the banks prior to the crisis was far worse than we had imagined,” Rosner says.

incentives explain everything

2016 The Consumer Financial Protection Bureau (CFPB) fined Wells Fargo  $185 million for a widespread fraud wherein salespeople – thousands and thousands of them – opened around 2 million unnecessary new accounts for its customers in order to meet internal sales targets.

Two basic principles of management, and regulation, and life, are:  
• You get what you measure.
• The thing that you measure will get gamed.  

Really that's just one principle: You get what you measure, but only exactly what you measure. There's no guarantee that you'll get the more general good thing that you thought you were approximately measuring. If you want hard workers and measure hours worked, you'll get a lot of workers surfing the internet until midnight. If you want low banking bonuses and measure bonus-to-base-salary ratios, you'll get high base salaries. Measurement is sort of an evil genie: It grants your wishes, but it takes them just a bit too literally.

 Wells Fargo was fined $185 million by various regulators for opening customer accounts without the customers' permission, and that is bad, but there is also something almost heroic about it. There's a standard story in most bank scandals, in which small groups of highly paid traders gleefully and ungrammatically conspire to rip-off customers and make a lot of money for themselves and their bank. This isn't that. This looks more like a vast uprising of low-paid and ill-treated Wells Fargo employees against their bosses.

The Consumer Financial Protection Bureau, which fined Wells Fargo $100 million, reports that about 5,300 employees have been fired for signing customers up for fake accounts since 2011. Five thousand three hundred employees! You'd have a tough time organizing 5,300 people into a conspiracy, which makes me think that this was less a conspiracy and more a spontaneous revolt. The Los Angeles City Attorney, which got $50 million (the Office of the Comptroller of the Currency got the other $35 million), explained the employees' grievances in a complaint last year:

Ruthless new account opening targets led to 2 million fraudulently created accounts. Which is unbelievable, unfathomable. Until you remember that just a decade ago the same thing was happening with lending and mortgages.Wells Fargo then fired 5300 employees who were involved. Fifty-three-hundred employees! Were any senior people shown the door? Who is the highest ranking executive, if any, to have been thrown out? 
Just the idea that something like this could be so widespread, within one of the most respected companies in America, is mind-boggling. People working at the major banks are regularly whipped to cross-sell loans to their wealth management customers, credit cards to their banking clients, insurance products to their brokerage accounts, etc. It’s bad. 
Is this the Super Bowl of identity theft? How do we even process this? If 5300 employees are involved – and needed to be terminated – along with millions of accounts, then many people higher up in the food chain had to be aware. Or at least deliberately unaware: “Don’t loop me in, just hit the goddamn targets.” This scam has been apparently going on for five years, according to the articles covering the story. Which means it began within a few months of the end of the crisis and all of the congressional hearings and investigations that occurred in its wake. These people are fearless.
The Chairman & CEO of Wells Fargo made $19.3 million last year, most of which came in the form of “performance bonus” pay. He made the same the year before. And what’s even better is that the company gets a write-off for paying that bonus in the form of stock options as opposed to cash, which means its effectively subsidized by taxpayers. Here’s how that works.
You guys know who pays the $185 million fine, right? Not the executives. The shareholders. That’s you. Wells Fargo is America’s most valuable bank by market cap at $250 billion. It’s held by Vanguard, BlackRock, Fidelity and virtually every other fund company in existence, which means you are indirectly a shareholder if you have a 401(k). Lots of ordinary investors hold the common stock of Wells Fargo in their personal accounts outright. Many more own it in mutual funds or ETFs. You’re paying. You.
Warren Buffett’s Berkshire Hathaway has almost 9% of the company, holding roughly 440 million shares. In another era, Buffett found himself embroiled in a financial scandal as the Chairman of investment bank Salomon Brothers. There was a Treasury-fixing scam and Buffett found himself testifying before congress in 1991 about it. He said this: “Lose money for the firm, and I will be understanding; lose a shred of reputation for the firm, and I will be ruthless.” Okay, I think this qualifies as “a shred of reputation”…I wonder how the ruthless part will manifest itself. 
The fine is paid, a lot of people get fired and everyone learns a lesson, for at least a few minutes. Then business as usual.

2014 The Real Reason Banks Promote Financial Literacy is to Repair their "Banks are Pirates" Image.

Deutsche Bank executives criticised by finance regulator
Leaked report suggests little impression has been made with efforts to restore bank's reputation. Germany's finance ministry piled pressure on Deutsche Bank to reform its corporate culture on Monday after the industry watchdog said the bank had not done enough to clean up its act despite several scandals. A strongly worded report by Bafin, the financial regulator, was leaked at the weekend suggesting the bank's co-chief executives, Anshu Jain and Jürgen Fitschen, have made little impression with their efforts to restore the bank's reputation. Bafin and other regulators are investigating Deutsche and more than a dozen other institutions over allegations they manipulated benchmark interest rates such as Libor and Euribor.

2014 Barclays boss admits it could take 10 years to rebuild public trust
Antony Jenkins says PPI mis-selling and Libor-rigging scandal have damaged bank's reputation over the long term​. It could take a decade for Barclays to win back the public's trust, the bank's chief executive has admitted. Antony Jenkins said the series of scandals that have rocked the banking system, including the mis-selling of payment protection insurance and Libor fixing, had damaged the bank's reputation over the long term. "Trust is a very easy thing to lose, and a very hard thing to win back. In my view it will takes several years – probably five to 10 – to rebuild trust in Barclays," he said. "I can only be responsible for Barclays but I'm hoping in what we do at Barclays we can also rebuild trust in banking."

One thing's certain in 2014: bankers will get bigger payouts
Regulators are trying to cap financial pay packets, but banks have already found ways around the new rules​

2014 JPMorgan Settles With Federal Authorities in Madoff Case​ 
JP Morgan has agreed to pay a record $2 BILLION to settle charges that it knowingly ignored evidence of convicted fraudster Bernard Madoff’s massive Ponzi scheme, settling charges that it ignored evidence of fraud. JPMorgan, having served as Mr. Madoff’s primary bank for more than two decades, had a unique window into his scheme. In a document outlining the bank’s wrongdoing, prosecutors argued that “the Madoff Ponzi scheme was conducted almost exclusively through” various accounts “held at JPMorgan.” On two occasions, in 2007 and 2008, JPMorgan’s own computer system raised red flags about Mr. Madoff, according to prosecutors. But both times, prosecutors say, JPMorgan employees “closed the alerts.”
Federal prosecutors, essentially accusing JPMorgan Chase of turning a blind eye to Bernard L. Madoff’s Ponzi scheme, will force the bank to pay $1.7 billion to his victims.​ Before Bernard L. Madoff was charged with stealing billions of dollars from his clients, and before he received a 150-year prison sentence for those crimes, JPMorgan Chase missed its chance to warn federal authorities about his Ponzi scheme.On Tuesday, five years after Mr. Madoff’s arrest set off a panic on Wall Street and in Washington, Mr. Madoff’s primary bank received a punishment of its own. Federal prosecutors in Manhattan imposed a $1.7 billion penalty on JPMorgan for two felony violations of the Bank Secrecy Act, a record payout under that 1970 law, which requires banks to alert authorities to suspicious activity. The prosecutors, essentially accusing the nation’s biggest bank of turning a blind eye to Mr. Madoff’s fraud, will require JPMorgan to pay the $1.7 billion to his victims.The bank cannot write off the sum as a tax deduction. And including the Madoff settlement, JPMorgan will have doled out some $20 billion to resolve government investigations over the last 12 months.



THE REVOLVING DOOR Eric Holder Wall Street Double Agent Comes In From the Cold 

The Holder Memo Won't Let Us  Fail Nail And Jail Banksters



The 1% Don't Go to Jail - They can "RISK" everything and not get punished because of the "Holder Memo

Matt Taibbi rips into America's growing income gap in 'The Divide'
Matt Taibbi starkly details how far U.S. ideals have fallen in 'The Divide: American Injustice in the Age of the Wealth Gap.' "Poverty goes up; Crime goes down; Prison population doubles." It's a snapshot, a way to represent what Taibbi sees as the through-the-looking-glass reality of contemporary America, where rule of law has been subverted by, on the one hand, corporate greed and, on the other, a kind of institutionalized abuse of the poor. Banks can steal billions yet there is no mandatory sentence for the 1%.

"For a country founded on the idea that rights are inalienable and inherent from birth," Taibbi writes, "we've developed a high tolerance for conditional rights and conditional citizenship. And the one condition, it turns out, is money. If you have a lot of it, the legal road you get to travel is well lit and beautifully maintained. If you don't, it's a dark alley and most Americans would be shocked to find out what's at the end of it."  To make the case, Taibbi shifts throughout "The Divide" between macro and micro, juxtaposing two distinct, and separated, worlds. He begins with Wall Street, which has yet to pay in any real sense for its part in the financial crisis: "a Ponzi scheme, no different than the Bernie Madoff caper, only executed on an exponentially huger scale."  As to why this is, Taibbi zeroes in on a memo, written in 1999 by "a little-known official from Bill Clinton's White House named Eric Holder " that established the principle of collateral consequences. The term refers to avoiding fallout from prosecution on corporate "officers, directors, employees, and shareholders" by pushing for fines and civil sanctions instead.  Here we see the roots of TARP, with its too-big-to-fail ethos — and why not, since these white-collar crimes are essentially victimless? The catch, however, is that they're not victimless at all since, as Taibbi observes, "in more than a few cases, you can draw a straight line from a cop being laid off or a union worker having his or her pension slashed back to the week of 2008 when a handful of Lehman executives took a payoff to mark down their own inventory."  Taibbi effectively indicts those executives — a cadre of insiders who engineered the sale of Lehman Brothers to Barclays Bank while guaranteeing themselves exorbitant bonuses and new jobs — as well as the hedge fund traders who tried to destroy the Canadian insurance company Fairfax Financial Holdings for the sport of it and the credit card division at JPMorgan Chase. The Holder Memo and Its Progeny

"I think you guys are breaking the law," Warren writes
- Dimon suddenly got quiet and responded, "So hit me with a fine. We can afford it."  

That's for sure. JP Morgan Chase was one of five of the world's largest banks hit with a total $5.7 billion fine after pleading guilty to global currency manipulation charges. Add to that, the $13 billion settlement it paid because of its funding of bad mortgages. Nonetheless, in the fourth quarter of 2014 alone, the company reaped in a $4.9 billion profit.




Who Watches the Watchers who Watch Over the Banks?

How during crisis, 9 financial firms with clean audits from the Big Four collapsed in months

2001 Seriously, Bernie Madoff was on the last SEC market-structure committee (scroll down to members)

Ernst  & Young Deloitte, PricewaterhouseCoopers and KPMG audit companies that account for 98 percent of the value of U.S. stock markets. During the crisis, nine major financial institutions collapsed or were rescued by the government within months of receiving clean bills of health from one of the Big Four. While Schnurr was deputy managing partner at Deloitte, the firm signed off on the books of Bear Stearns, Washington Mutual and Fannie Mae. Each went bust soon after, costing investors over $115 billion in losses.

Part 1 How Wall Street captured Washington’s effort and can't rein in banks
Part 2 U.S. banks moved billions of dollars in trades beyond Washington’s reach
Part 3 Accounting industry and SEC hobble America’s audit watchdog





US has refused to join the Common Reporting Standard (CRS)


An internal government report obtained by The Hill says the Securities and Exchange Commission has failed to properly guard sensitive nonpublic information. [READ INSPECTOR GENERAL REPORT.]  The report from the SEC’s Inspector General says the agency failed to clear the room during non-public executive session votes of the five-member board.  It also found that officials didn’t keep complete attendance records during at least one high-profile meeting involving a J.P. Morgan settlement worth $200 million.  The 16-page Office of the Inspector General (OIG) report didn’t blame an individual for leaking information, but it raised questions about how the agency conducts routine business. exposes nonpublic market-sensitive information to lawyers, staffers and the general counsel of SEC commissioners who aren’t authorized to see it.



There Isn't Any Economy When There Isn't Any Trust

Who really benefits from financial literacy? “Is this an educational enterprise, or a marketing gimmick? It seems to be banks and financial firms that benefit most from these efforts to improve “literacy”; it’s just another way for them to capture more clients.

Banks Cheat -- It's All Rigged! The 2008 Big Crash

"These banks, which already possess enormous power just by virtue of their financial holdings – in the United States, the top six banks, many of them the same names you see on the Libor and ISDAfix panels, own assets equivalent to 60 percent of the nation's GDP – are beginning to realize the awesome possibilities for increased profit and political might that would come with colluding instead of competing. Moreover, it's increasingly clear that both the criminal justice system and the civil courts may be impotent to stop them, even when they do get caught working together to game the system." ~Matt Taibi

The 10 best quotes from financial insiders
Choice quotes that epitomise the series from people interviewed in the finance sector.

Luyendijk, a former foreign correspondent for the Dutch newspapers Volkskrant and NRC Handelsblad asked how could individuals who are collectively blamed for causing the worst financial crisis since the 1930s “live with themselves?” The answer was simple. They didn’t even think they had done anything wrong. Each worked within a tightly-defined area of the bank, which had not lost enough money to bring down the whole.


12/15 The Guy Who Warned About Broken Libor Now Sees Fast-Money Financing as the New Risk Financing from shadow banks is on the rise. 

The cash that finances the U.S. economy is now coming from a spigot that is more prone to rapidly turning off in times of stress than the traditional banking system has been, according to the strategist who first brought attention to banks misstating key benchmark lending rates during the financial crisis in 2008. The warning from Scott Peng, head of global portfolio solutions at Secor Asset Management in New York, comes as investors, analysts, and regulators fret about the recent selloff in the corporate bond market, which the strategist includes in his definition of the so-called "shadow banking system" of nonbank financial intermediaries. Such shadow banking includes all private-sector funding that isn't provided by deposit-taking banks, so it encompasses bond funds as well as hedge funds, insurance companies, and pension funds, according to Peng.

The English government would like you to think that the 99% are ruining the eocnomy. But this is the HSBC Bank reality.



READ Currency Markets Are Rigged by Washingtons Blog - November 13th, 2014
The foreign exchange market, gold & silver, derivatives, interest rates, energy prices, and the list goes on and on and on.

4/11/15 Unsafe and Unsound Banks NYT Editorial

After the latest round of bank stress tests last month, the Federal Reserve announced that, by and large, the nation’s biggest banks would all be able to withstand another crisis without requiring bailouts. This month, Thomas Hoenig, vice chairman of the Federal Deposit Insurance Corporation, released data that contradict the Fed’s conclusions. In the face of Mr. Hoenig’s challenge, the Fed would do well to recall a chapter from its recent history. Before the financial crisis, when Alan Greenspan, then chairman of the Fed, was insisting all was well with the banks, one Fed governor, the late Edward Gramlich, warned of mounting risks. He was ignored.  At issue this time around is the level of bank capital, which reflects the amount of loss a bank can endure before failing (or, if the bank is “too big to fail,” requiring a bailout). According to the Fed’s main measure, capital at the eight largest American banks averaged 12.9 percent of assets at the end of 2014, well above required regulatory minimums.


Inside the New York Fed: Secret Recordings and a Culture Clash - The New York Fed had become too risk-averse and deferential to the banks it supervised. Its examiners feared contradicting bosses, who too often forced their findings into an institutional consensus that watered down much of what they did.








Oct 11 2013 Whistleblower Suit Confirms that the New York Fed is in the Goldman Protection Racket By Yves Smith

A former bank examiner at the Federal Reserve Bank of New York, Carmen Segarra, filed a suit (embedded at the end of this post) against the New York Fed and several of its employees alleging, among other things, improper termination. The complaint is a doozy and some of the additional details supplied by Segarra to ProPublica make an already ugly picture look even worse.


  • Former New York Fed examiner, Carmen Segarra, after uncovering problems with Goldman Sachs' conflict-of-interest policy says her supervisors pressured her to falsify her findings; that Goldman's policies were inadequate, and she refused.
  • Segarra and New York Fed colleagues downgraded because of deficient policies.
  • Segarra found that Goldman's efforts to wall off conflicts in a multi-billion dollar energy deal was full of holes.

9/26/14 Ex-regulator releases secret Goldman Sachs tapes in bid to win legal fight Former New York Fed employee Carmen Segarra claimed she was fired because her bosses thought she was too tough on Goldman Sachs.

9/26/14 A former US bank examiner who alleges she was fired for being too tough on Goldman Sachs has released hours of secretly recorded tapes to add muscle to her argument as she tries to win a legal appeal.  Carmen Segarra is a former New York Federal Reserve bank examiner who butted heads with her bosses over her policing of Goldman Sachs. Segarra alleges that her attempts to discipline Goldman Sachs were blocked by her bosses at the New York Fed, who she suggests were intent on giving Goldman Sachs no trouble. The Fed disputes her allegations, as does Goldman.  Segarra’s case raises a host of questions about “regulatory capture”, the term for regulators who become too cozy with the industry they are meant to police.

The Secret Recordings of Carmen Segarra SEP 26, 2014 An unprecedented look inside one of the most powerful, secretive institutions in the country. The NY Federal Reserve is supposed to monitor big banks. But when Carmen Segarra was hired, what she witnessed inside the Fed was so alarming that she got a tiny recorder and started secretly taping. In Print


So Who is Carmen Segarra? A Fed Whistleblower Q&A

In 2013  Segarra sued the New York Fed and her bosses, claiming she was retaliated against for refusing to back down from a negative finding about Goldman Sachs. A judge threw out the case this year without ruling on the merits, saying the facts didn't fit the statute under which she sued. 
Segarra had made a series of audio recordings while at the New York Fed. Worried about what she was witnessing, Segarra wanted a record in case events were disputed. So she had purchased a tiny recorder at the Spy Store and began capturing what took place at Goldman and with her bosses.  Segarra ultimately recorded about 46 hours of meetings and conversations with her colleagues. Many of these events document key moments leading to her firing. But against the backdrop of the Beim report, they also offer an intimate study of the New York Fed's culture at a pivotal moment in its effort to become a more forceful financial supervisor. Fed deliberations, confidential by regulation, rarely become public.

Segarra was an experienced attorney who had spent her entire career working in banking in the corporate counsel’s office of large financial firms, most recently as a senior counsel at Citi. In other words, she is not a naif or a theoretician. She was hired as part of an effort to increase bank examination functions to meet Dodd Frank requirements. But Segarra wound up on a collision course with the old guard at the New York Fed, which is particularly deeply tied into Goldman. For instance, the current president, William Dudley, had been Goldman’s chief economist) and has a bias to protect rather than regulate financial firms. The senior officer responsible for Goldman at the New York Fed was called a “relationship manager.” No, I am not making that up.

Segarra was tasked to assess whether Goldman’s conflicts of interest policies were adequate in three separate cases: Solyndra, the El Paso/Morgan Kindler acquisition, and a bank acquisition by Sandanter. What is stunning if you read the complaint, which we’ve embedded below, is how high-handed Goldman was in its responses to Segarra’s inquiries. It’s not hard to imagine that they viewed this as a pro forma exercise that given their cozy relationship with the New York Fed, would go nowhere. They didn’t just stonewall, they told egregious lies. That sort of cover-up usually winds up being worse than the crime, but not if you are in a privileged class like Goldman. When Segarra (and initially, the other members of her team) kept pressing Goldman for answers and making clear that what they were getting was problematic, Goldman then started giving credulity-straining responses.

As the exam moved forward, Segarra came under pressure from the Goldman relationship manager, Michael Silva, who was also senior to her at the bank (this is how you can tell the new regulatory push is all optics: the examiners are subordinate to the established “don’t ruffle the banks” incumbents). Silva, who had been chief of staff to Geithner before becoming “relationship manager” to Goldman, appears, unlike Segarra, not to have had real world financial services experience (he looks to have joined the New York Fed as a law clerk in 1992 and stayed with the bank).

Segarra was fired abruptly after refusing to change her recommendations and destroy supporting documents, which was in violation of regulatory policy (bank examiners are not “fire at will” employees; they need to be put on notice and given the opportunity to correct deficiencies in their performance before they can be dismissed).

I’ve read other wrongful termination suits and Segarra’s looks very strong. It’s going to be awfully hard for the New York Fed to talk its way out of this one.

What is particularly damning for the Fed and Goldman is Goldman’s intransigence during the examination process and the howlers the New York Fed staffers used to justify treating the bank with kid gloves. The complaint is short and readable, but for your convenience, I’ll extract some of the really juicy bits.

The bone of contention is that bank regulations required Goldman to have a firm-wide conflicts of interest program. The reason that it needs to be firm wide is that letting business units have influence or worse, control over compliance issues is putting the foxes in charge of the henhouse. JP Morgan had risk control for its CIO unit located in the CIO, not the bank, level. It should be no surprise that a fiasco like the London Whale was the result. Goldman blew off Segarra’s first document request. When asked about it (before Goldman realized someone at the Fed was actually taking the matter seriously), the bank said on separate occasions that it had no firm wide conflicts of interest program.
And when Goldman finally started producing documents, things got uglier...


Class warfare
2 tired Justice system
Rules for the 99%  
No rules for Banksters


"Why do you have to say there's no policy?" her boss said near the end of the grueling session.
 "Professionally," Segarra responded, "I cannot agree."  
The New York Fed disputes Segarra's claim that she was fired in retaliation.


Goldman did not think its Code of Conduct was a firm-wide conflicts-of-interest policy.

SR 08-08 The Fed requirement for firm-wide conflicts-of-interest policies and procedures

When we asked for a copy of their firm-wide conflicts-of-interest policy, Goldman did not submit its Code of Conduct to us for our consideration. Goldman was correct not to think so. SR 08-08 [the Fed requirement for firm-wide conflicts-of-interest policies and procedures] and its supporting and related documentation do provide guidance as to the content you would expect to see discussed in a policy.

Goldman's Code of Conduct does not satisfy the requirements and expectations of SR 08-08. Other banks agree with Goldman. At the time, some had adopted both a Code of Conduct, which these banks did not consider a policy, as well as separate conflicts-of-interest policies. My direct management and some of my peers did not think Goldman's Code of Conduct was a conflicts-of-interest policy. Policies in banks are actually pretty standardized documents, with clear titles and content directly related to the title/purpose of the document, written in a language meant to be understood by every employee at every level.

Segarra had thought her job was simple: Follow the evidence wherever it led. Now she was being told she had to "enfold" business-line specialists and "defuse" their objections.  "What does this have to do with bank examinations," Segarra wondered to herself, "or Goldman Sachs?"

One New York Fed employee, a supervisor, described his experience in terms of "regulatory capture," the phrase commonly used to describe a situation where banks co-opt regulators. Beim included the remark in a footnote. "Within three weeks on the job, I saw the capture set in," the manager stated.

Enter Michael Silva - embedded inside the banks, with an open mandate to do continuous examinations in their particular area of expertise, everything from credit risk to Segarra's specialty of legal and compliance. 

Both were reigned in by Tom Baxter, the New York Fed's general counsel, he didn't want the  "Fed to assert powers it doesn't have." Legal but shady deals were ok with Tom. In the meeting with Goldman, an executive said the "no objection" clause was for the firm's benefit and not meant to obligate Goldman to get approval. Rather than press the point, regulators moved on. By law, the banks are required to provide information if the New York Fed asks for it. Segarra pointed out that Goldman might not have done the anti-money laundering checks that Fed guidance outlines for deals like these. If so, the team might be able to do more than just send a letter, she said. The group ignored her. At the Fed, simply having a meeting was often seen as akin to action, she said in an interview. "It's like the information is discussed, and then it just ends up in like a vacuum, floating on air, not acted upon."
Segarra pointed advice about behaviors that would make her a better examiner at the New York Fed. But his suggestions, delivered in a well-meaning tone, tracked with the very cultural handicaps that Beim said needed to change.  Kim: "I would ask you to think about a little bit more, in terms of, first of all, the choice of words and not being so conclusory."  Beim report: "Because so many seem to fear contradicting their bosses, senior managers must now repeatedly tell subordinates they have a duty to speak up even if that contradicts their bosses."

By the spring of 2012, Segarra believed her bosses agreed with her conclusion that Goldman did not have a policy sufficient to meet Fed guidance. The Fed's official guidance,  calls for a policy that encompasses the entire bank and provides a framework for "assessing, controlling, measuring, monitoring and reporting" conflicts. Segarra asks Gwen Libstag, the executive at Goldman who is responsible for managing conflicts, whether the bank has "a definition of a conflict of interest, what that is and what that means?"  "No," Libstag replied at the meeting in April. 
Segarra is in Silva's small office at Goldman Sachs with his deputy. The two are trying to persuade her to change her view about Goldman's conflicts policy.  "You have to come off the view that Goldman doesn't have any kind of conflict-of- interest policy," are the first words Silva says to her. Fed officials didn't believe her conclusion — that Goldman lacked a policy — was "credible."



The banks' chief risk officers, and in the case of Citigroup, Chief Executive Vikram Pandit, received letters in May 2010 instructing them on what to include in the recovery plans.

The requests stemmed from January 2010 crisis management meetings held by regulators. The letters sent to the five banks were nearly identical. Each plan was to address severe financial stress at the firm, as well as "general financial instability." The plans should be capable of being executed ideally within three months, but no longer than six months, the documents said. The plans should "make appropriate assumptions as to the valuations of assets and off-balance sheet positions," the documents said. Recovery plans have been mentioned in public before, but only in passing. In testimony to Congress in July 2010, Fed Governor Daniel Tarullo said the "largest internationally active U.S. banking organizations" were working on recovery plans.

The initiative stemmed from work led by the Financial Stability Board, a body that coordinates the work of international financial regulators, he said. In a presentation in March, JPMorgan Chase said it had a recovery plan in place and said it was ordered by regulators.The presentation was organized by Harvard Law School and was closed to the media at the time, but is available online.




With HFTs, the notion of objective price discovery and "true value" is dead.


THE DEFINITION OF CHUTZPA -Goldman Sachs rigs the game
with a computer software program HFT that buys and sells before anyone else can.


HFT Wall Street Knows how to Make the Money

HFT High Finance Trading Predators

3/29/2014 High-frequency trading – enough to get Goldman Sachs preaching financial probity

HFT – or high-frequency trading. It's likely that entire lawsuits will be devoted to HFT in the future but, in a nutshell, After all, none other than what Rolling Stone memorably called the "vampire squid", Goldman Sachs, has become a zealous promoter of reforming the HFT system.

3/31/14 FBI Said to Probe High-Speed Traders Over Abuse of Information 

The Federal Bureau of Investigation’s inquiry stems from a multiyear crackdown on insider trading, which has led to at least 79 convictions of hedge-fund traders and others. The Federal Bureau of Investigation’s inquiry stems from a multiyear crackdown on insider trading, which has led to at least 79 convictions of hedge-fund traders and others. Agents are examining whether traders abuse information to act ahead of orders by institutional investors, according to the person, who asked not to be identified because the probe is confidential. Even trades based on computer algorithms could amount to wire fraud, securities fraud or insider trading.​

IN 2010 Big banks were told to make 'collapse' plans

High-frequency traders use computer algorithms to obtain split-second advantages when placing trades, and are responsible for more than half of all U.S. trading volume.


4/14/14 Lawsuit claims CME gave high-frequency traders special access
A group of traders has sued CME Group Inc, accusing the operator of the world's largest derivatives exchange of selling market data to high frequency traders, cheating other investors who lacked such access. U.S. District Court in Chicago, William Braman, Mark Mendelson and John Simms said CME and its Chicago Board of Trade unit have since 2007 given high-frequency traders early access to buy and sell orders.  They said this deprived other investors of the transparent, real-time data on futures and interest rate contracts that they thought they were getting, and were paying for.  "The defendants have perpetrated a fraud on the marketplace and intentionally concealed the activities of a select class of market participants from the rest of the defendants' customers and marketplace users," the complaint said. The lawsuit seeks class-action status for customers in financial futures contracts, and agricultural, energy, metal, equity index, foreign exchange and interest rate futures and options contracts. It seeks money damages, and a halt to alleged favoritism.

HFT In My Backyard 

Part 1 The first part of my book, 6, was mostly about the rise of the HFT machines in the pre- and post-REG NMS era. Charting the surge of Electronic Communication Networks such as Island, I realized the history of Chicago markets in conjunction with the ascent of these technologies was more interesting than Wall Street SOES bandit stories.Hence the second and last part of my book, 5, was focused on Chicago, particularly the transitions from the old human trading pits to the computerized ecosystem now (co-)located in huge data centers..  The history of exchanges in the Windy City is a true case study for anyone interested by the computerization of commodities and financial markets. I wrote about the arrival of the telegraph in Chicago; the first telegraphic “tweet” arrived in Chicago just three months before the first organized exchange, the Chicago Board of Trade (CBOT), was created in April of 1848. I even found the phrase “flash orders” in some 19th century Chicago newspapers, used to describe the practice of traders using fast private telegraphic lines to buy commodities they knew would rise in price in the next few seconds so that they could resell at a higher price what they had bought seconds before – sound familiar?

Part II

"Signal Level Distributions and Fade Event Analyses for a 5 GHz Microwave Link Across the English Channel" All the HFT competitors have to cross the English Channel from France or Belgium to England. They mainly go to Swingate in the north of Dover, where there are two old towers housing Optiver, McKay and Vigilant, or to Hougham in the south of Dover where Latent and Custom Connect have dishes. Jump added a third dish in Hannut between February 2012 and February 2013, perhaps after they bought the Houtem tower.
Microwaves have been used for HFT since 2010 after all. Since so many readers want to learn about these networks, allow me now to continue my story. In order to give you a clear picture of what to find on the map and how to locate all these towers. In the US, the New York Stock Exchange (NYSE) is currently located in Mahwah, in New Jersey. For the Lenape people who originally lived there, the word mahwah meant “Place Where Paths Meet” – a perfect description of a present day exchange. At NYSE, co-located traders meet in a data center, and microwave paths converge on the roof. In Europe, there are two main data centers in England near London: one to the east in Basildon, the NYSE facility housing the Euronext/Liffe exchanges plus Goldman Sachs’s dark pool Sigma-X; and one to the west in Slough, the LD4 data center containing the BATS exchanges. Frankfurt, Germany is home to the Equinix FR2 data center which hosts Deutsche Börse and Eurex.
There are two types of competitors in the very small world of microwaves. First are HFT prop trading firms: Chicago-based Jump Trading (aka World Class Wireless), Dutch companies Optiver anc Flow Traders (aka Global Connect) DRW  (aka Vigilant Global). Some of these firms sell part of their bandwidth to other customers. Second are actual providers: McKay Brothers Custom Connect and, more recently in EU, NeXXCom or Latent Networks. Their customers are banks, hedge funds, even other HFT firms. Some like McKay are only interested in the Frankfurt-London path, while others such as Optiver, Flow Traders, Jump and Vigilant also join the  Atlantic Crossing 1 cable landing station in Whitesand Band, Cornwall, England, to allow data to cross over the Atlantic and go straight to Chicago using US microwave networks. Let’s start with Jump Trading. I visited each room, taking pictures of the equipment until there, right in front of me, was a big red button functioning as the emergency stop. It was amazing to realize I could have cut the Jump microwaves network just by pushing it. But I didn’t want to bother Jump nor Perseus’s customers, and besides, microwave networks have fiber optics backup so any sabotage would have been useless. A message to the jump lawyers: don’t sue me. I know I was on “private property” so I won’t publish the photographs I took, save this one:

Wall Street Buys NATO Microwave Towers in Quest for Speed 2014 An 800-foot microwave tower in a Belgian cow pasture transmitted messages for the U.S. armed forces in 1983 when suicide bombers killed hundreds of military personnel at Marine barracks in Beirut, Lebanon. Now it’s being used by high-frequency traders. 
US Installation Realignment in Belgium Announced The Department of Defense announces today the decision to inactivate and return three microwave radio relay sites to Belgium.  The sites are: Houtem, Westrozebeke and Flobecq.  The United States no longer requires these sites since the service provided by the radio relay system installed in 1996 will be replaced by higher-capacity, lower cost commercial communications service.

The facts are as follows:  
A microwave link can split bandwidth up into 10Mbps increments.
The microwave link has an aggregate of 100Mbps.
Every 64 byte packet send over these links takes 6 microseconds and change to serialize.
Each participant sends 64 byte frames of trade data to the service.

At 10Mbps clients can only send 1 packet every 60 or so microseconds. Now, imagine every customer in a service sends data at about the same time, a somewhat likely scenario due to the likelihood of one customer sending data nano or microseconds before the next customer and so on. In this thought experiment,
Customer 1 is first, taking 6 microseconds to serialize into the 100Mbps microwave link.
Customer 2 sends their trade data 2 microseconds later, so they wait 4 microseconds to serialize and another 6 to actually serialize.
Customer 3 sends trade data 1 microsecond after Customer 2, waiting 3 microseconds for Customer 1, then 6 microseconds for Customer 2, then 6 more microseconds to actually serialize.
Customer 4 is quicker; they send their data 1 nanosecond after Customer 3. And wait 2.999 microseconds for Customer 1, then another 6 for Customer 2, then another for Customer 3, then another 6 microseconds to actually serialize.  

This example illustrates the supremacy of the owner of network in terms of speed in a shared bandwidth agreement. Jump shares its bandwidth with Perseus. While Perseus has additional customers, none will be as fast as Jump. This doesn’t mean Jump is the fastest operator in the HFT world, however.


"The Divide: American Injustice in the Age of the Wealth Gap,"
Taibbi explores how the Depression-level income gap between the wealthy and the poor is mirrored by a "justice" gap in who is targeted for prosecution and imprisonment. "It is much more grotesque to consider the non-enforcement of white-collar criminals when you do consider how incredibly aggressive law enforcement is with regard to everybody else," Taibbi says. video




Corporate Governance


Governance Risk and Ethics 
A good way to remember the key concepts of corporate governance is to thinkof the mnemonic HAIRDRIFT .

7/21/14 Financial Literacy and the Audit Committee 

The Audit Committee is widely recognized as an important mechanism required to ensure good corporate governance.Section 359 (3) & (4) of the Companies and Allied Matters Act 2004 provides that every public company shall have an Audit Committee and the Committee shall consist of an equal number of Directors and representatives of the shareholders of the company (subject to a maximum number of six members). The Committee “shall examine the External Auditor’s report on the Financial Statements and make recommendations thereon to the annual general meeting as it may think fit”.

The definition of financial literacy is vague as Article 30.2 of the SEC Code simply states that members of the Committee should have basic financial literacy and should be able to read financial statements. It is unclear whether the ability to read and understand financial statements suffices as financial literacy or whether some additional expertise in this area is required. The Canadian Securities Administrators’ National Instrument 52-110 states that it is not necessary for a member of the Audit Committee to have a comprehensive knowledge of accounting and auditing standards to be considered financially literate.   Given the responsibilities imposed on the Committee by CAMA and the SEC Code, it is clear that Audit Committee Members need to be able to read and understand financial statements, including the company’s balance sheet, income statement and cash flow statement.   Each member is not expected to be an expert in accounting or finance because the Audit Committee is at liberty to seek independent expert advice as required. It is however important that committee members are able to ask the right questions, evaluate and interpret responses. To ensure the effectiveness of the Committee, it is expected that at least one member of the Committee should possess appropriate knowledge and experience to review the financial reporting process. This has become more important given the adoption of the International Financial Reporting standards (IFRS).


Weapons of Mass Destruction in the Financial World
2014 THE RECIPE: READ How To Rob A Bank: William Black at TEDxUMKC

Fraud Prosecution Stopped the S&L Crisis … But Government REFUSES to Prosecute Fraud Now
30,000 Criminal Referrals Led to 1,000+ Felony Convictions In Major Fraud Cases During the S&L Crisis … Not Even a SINGLE Prosecution Today, Even Though the 2008 Crisis Was 70 Times Bigger

  • Currently the same agency – Office of Thrift Supervision – which was supposed to regulate many of the largest makers of liar’s loans in the country has made … zero criminal referrals.
  • The Office of Comptroller of the Currency – which is supposed to regulate the largest national banks has made zero criminal referrals.
  • The Fed appears to have made zero criminal referrals.
  • The Federal Deposit Insurance Corporation is smart enough to refuse to answer the question.








FINRA phone 301-590-6500
File a Complaint

Launches Online BrokerCheck Research Tool, But Does It Work?

Call the BrokerCheck Hotline at (800) 289-9999. Monday-Friday 8 a.m. – 8 p.m. ET email

Federal and state securities laws generally require that any person or firm selling securities to the public, or advising members of the public as to investment decisions, must be licensed, registered and in good standing with the appropriate regulatory agencies. In the past there really was not an easy way to verify whether a person or firm was adequately licensed. To the extent you could even get this information (or even figure out where to get it), it would typically require reviewing multiple federal or state online databases and/or talking to one or more representatives. Most investors don’t even realize they should verify the credentials of a broker before handing over their investment dollars and you can see the impetus for creating and promoting the BrokerCheck database. The majority of critics take issue with the completeness of information provided on the site. Per statements from multiple industry professionals, missing information includes: certain records that brokers have successfully had expunged, information on brokers’ previous bankruptcy filings, and internal firm investigations.[see for more ]

BofA's legal costs mount in Countrywide mortgage fiasco
Prosecutors want BofA to pay $864 million over a program called 'The Hustle
The bank already has shouldered about $50 billion in losses, settlements and other costs related to its Countrywide purchase. Federal prosecutors want BofA to pay $864 million after the bank's stinging defeat in a major civil fraud trial in October. A jury found BofA liable in a case centered on a Countrywide program called "The Hustle," which churned out risky home loans before selling them to mortgage giants Fannie Mae and Freddie Mac.  But whatever penalty the bank might pay, it will amount to a mere drop in the bucket of BofA's legal bills — much of it stemming from its ill-fated acquisition of the former Calabasas mortgage lender in 2008.  "It's chump change," said Dick Bove, bank analyst at Rafferty Capital Markets.  The bank already has shouldered about $50 billion in loan and foreclosure losses, lawsuit settlements and investigations and legal defense costs stemming from its purchase of Countrywide, just as the housing market cratered.

The Forecloser Jon Stewart

Glass-Steagall Act:

is most often used to refer to four provisions of the Banking Act of 1933 that limited commercial bank securities activities and affiliations between commercial banks and securities firms. For 60 years, a 37-page document kept the financial system relatively safe. It was repealed in 1999 which caused the tech bubble and the greatest financial crisis since the stock-market crash of 1929.

Dodd-Frank Act:

From the moment Dodd-Frank passed, the banks’ financial results have tended to slide downward, in significant part because of measures taken in anticipation of its future effect. Many acknowledge that the bubble­-bust-bubble seesaw of the past decades isn’t the natural order of capitalism—and that the compensation arrangements just may have been a bit out of whack. “There’s no other industry where you could get paid so much for doing so little,” a former Lehman trader said. Paul Volcker, whose eponymous rule is at the core of the changes, echoes an idea that more bankers than you’d think would agree with. "Finance became a self-justification." "They made a lot of money trading with each other with doubtful public benefit."
A few years ago, the Masters of the Universe never could have imagined their industry being compared to big-box retailing. And yet, the model that had fueled bank profits has finally broken, as markets sputtered and new regulation kicked in. "Compensation is never really going to come back," a Wall Street headhunter told me. "That is something entirely new."




CNBC: Federal Reserve Plan to Monetize the Debt/Stimulus = Ponzi Scheme



2010 - 9 TRILLION Dollars Missing from Federal Reserve, Fed Inspector General Can't Explain
Rep. Alan Grayson asks the Federal Reserve Inspector General about the trillions of dollars lent or spent by the Federal Reserve and where it went, and the trillions of off balance sheet obligations. Inspector General Elizabeth Coleman responds that the IG does not know and is not tracking where this money is. Article


Madoff Trustee Fights JPMorgan Bid To Move $6B Suit 
The trustee liquidating Bernard L. Madoff's investment company fought back Wednesday against JPMorgan Chase & Co.'s efforts to "escape the scrutiny" of a New York bankruptcy court by removing the trustee's $6.4 billion lawsuit against it to a district court.

Madoff, Lehman Trustees' Fees Could Bankrupt SIPC
Massive payouts to Securities Investor Protection Corp. trustees managing the bankruptcies of Lehman Brothers Holdings Inc.'s brokerage arm and Bernard L. Madoff Investment Securities LLC are threatening to bankrupt the group's $2.5 billion funding pool, a report released Wednesday said.

FDIC's Tab For Failed U.S. Banks Nears $9 Billion
The biggest stream of reimbursements, $1.21 billion in all, has gone to BankUnited Inc., of Miami Lakes, Fla. Its private-equity owners resurrected a similarly named savings institution that collapsed in 2009 under the weight of home loans made before the housing bust. The FDIC is on the hook to cover as much as 95% of losses on some loans at BankUnited, which went public in January. BankUnited has received $1.21 billion from the FDIC.

Approximately $6.6 billion in cash was likely stolen after being flown to Iraq during the months that followed the U.S. led invasion, Pentagon officials said recently.
Stuart Bowen, the U.S. Special Inspector General for Iraq Reconstruction, told The Los Angeles Times that the sum just might be "the largest theft of funds in national history." The funds -- which were separate from a $53 billion appropriation Congress approved for Iraqi reconstruction efforts -- were cobbled together by the Federal Reserve Bank of New York before being flown to Baghdad and distributed to interim Iraqi ministers, who U.S. officials see as the most likely culprits in the theft: an allegation that's not officially been leveled. Under President George W. Bush the cash was part of a series of shipments totaling more than $12 billion, taken largely from the U.N. "oil-for-food" program and the sales of Iraqi oil. The Pentagon admitted last year that it could not account for over $8.7 billion in Iraqi reconstruction funds, and that about $2.6 billion of it was sent out without any documentation at all. Investigators said in 2005 that Bush officials apparently neglected to put procedures in place to track the money or hold recipients accountable for its proper applications.

Democrats, Republicans and the media were all complicit in helping the super rich recklessly dominate the economy while giving them massive handouts.


​Access Journalism Dominates The Business Media.

They are too cozy with the powerful on Wall Street to do their jobs correctly.

The media fawned over Wall Street stars such as Jamie Dimon at J.P. Morgan Chase & Co. (US:JPM);

Eliot Spitzer, former New York governor and attorney general, and Jimmy Cayne of Bear Stearns.

Why? They are part of the club.





The Federal Open Market Committee has authorized an extension of the existing temporary U.S. dollar liquidity swap arrangements with the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank through February 1, 2013.

The rate on these swap arrangements has been reduced from the U.S. dollar OIS rate plus 100 basis points to the OIS rate plus 50 basis points. In addition, as a contingency measure, the Federal Open Market Committee has agreed to establish similar temporary swap arrangements with these five central banks to provide liquidity in any of their currencies if necessary. Further details on the revised arrangements will be available shortly.
U.S. financial institutions currently do not face difficulty obtaining liquidity in short-term funding markets. However, were conditions to deteriorate, the Federal Reserve has a range of tools available to provide an effective liquidity backstop for such institutions and is prepared to use these tools as needed to support financial stability and to promote the extension of credit to U.S. households and businesses.
Information on Related Actions Being Taken by Other Central Banks: Bank of Canada | Bank of England | Bank of Japan (PDF) | European Central Bank | Swiss National Bank (PDF) 202-452-2955.


The Banker Nov 11, 2010  

Performed By Mike Daviot
Written, Directed and Produced By: Craig-James Moncur



UK orders WSJ to censor names from website, to no avail of course

That's when British prosecutors stepped in, obtaining a court order
"prohibiting the newspaper from publishing names of individuals not yet made public in the government's ongoing investigation," the Journal's Cassell Bryan-Low reported. From the paper's explanation:

The Journal received word of the order from the SFO by email at 7:18 p.m. London time. The news organization already had published on Dow Jones Newswires and the Journal's website,, an article by Mr. Enrich and reporter Jenny Strasburg that divulged names of traders and brokers that British prosecutors expect to publicly name next week. The article was taken down from the website but appears in Friday's print editions of the Journal circulated in the U.S. and in Asia.

Hey, if you're in the UK, don't read this paragraph. Your government still hasn't figured out the Internet. Her Majesty orders you not to read these names! 

"Among those who could be named are several of Hayes' former coworkers at both Citigroup Inc (NYSE:C) and UBS AG (NYSE:UBS). Michael Pieri, who was Hayes' boss while he worked at UBS, was fired by the bank and moved to Australia. Hayes' former assistant at UBS, Mirhat Alykulov, could also be on the list. Sources said he has been cooperating with investigators from the U.S. Another name which could be on the SFO's list is Christopher Cecere, who was Hayes' boss while he worked in Citigroup's Tokyo operations. Cecere resigned from his position at Citigroup around the same time Hayes was fired. Other people who could be on the list are ex HSBC Holdings plc (NYSE:HBC) (LON:HSBA) trader Luke Madden, former JPMorgan Chase & Co. (NYSE:JPM) employee Paul Glands, and former Rabobank employee Paul Robson." - via "ValueWalk"

Email Exchange Contradicts Libor Testimony From Former UBS Head
Alex Wilmot-Sitwell, former co-head of UBS AG and a current Bank of America Corp (NYSE:BAC) executive, testified that he didn’t recall UBS trader Tom Hayes and wasn’t sure if they had even been at the company at the same time, but British investigators have uncovered an email chain that shows Wilmot-Sitwell was involved in trying to retain Hayes, reports David Enrich
Those UBS Emails about Tom Hayes

UBS Executive email

The email (reprinted below; WSJ opted to withhold some executives’ names) calls all of Wilmot-Sitwell’s testimony into question because it demonstrates that he may be willing to lie to cover his actions. No doubt he will say that he had forgotten about the email exchange, or that it was a detail beneath his notice, but it still raises doubts about his veracity.

ex Citigroup Inc (NYSE:C) and UBS AG (NYSE:UBS) trader Tom Hayes
The WSJ also reports that ex Citigroup Inc (NYSE:C) and UBS AG (NYSE:UBS) trader Tom Hayes is expected to enter a plea of not guilty. He faces eight counts of charge in connection with allegedly fixing Libor. Two brokers, James Gilmour and Terry Farr, who formerly worked at R.P. Martin Holdings Ltd. who face similar charges are also expected to enter their pleas. However, it is not known how they plan to plea. 

Possible Names on the list
Michael Pieri, who was Hayes’ boss while he worked at UBS, was fired by the bank and moved to Australia. Hayes’ former assistant at UBS, Mirhat Alykulov, could also be on the list. Sources said he has been cooperating with investigators from the U.S.

Another name which could be on the SFO’s list is Christopher Cecere, who was Hayes’ boss while he worked in Citigroup’s Tokyo operations. Cecere resigned from his position at Citigroup around the same time Hayes was fired. Other people who could be on the list are ex HSBC Holdings plc (NYSE:HBC) (LON:HSBA) trader Luke Madden, former JPMorgan Chase & Co. (NYSE:JPM) employee Paul Glands, and former Rabobank employee Paul Robson.

—–Original Message——
From: UBS Executive 1
Sent: 10 Jul 2009 09:37
To: UBS Executive 2
To: Kengeter, Carsten
Cc: Alex Wilmot-Sitwell
Cc: UBS Executive 3
Subject: RE: Next week


Spoke to him as well and everything looks fine for now, tks all of you for ur help

—–Original Message——
From: UBS Executive 2
Sent: Friday, July 10, 2009 7:26 AM
To: Kengeter, Carsten
Cc: Wilmot-Sitwell, Alexander; UBS Executive 1; UBS Executive 2; UBS Executive 3
Subject: RE: Next week


I spoke with Tom as well and emphasized and endorsed.
His reaction was positive.

Best regards,
UBS Executive 2

—–Original Message——
From: UBS Executive 3
Sent: Friday, July 10, 2009 2:12 PM
To: Kengeter, Carsten
Cc: Wilmot-Sitwell, Alexander; UBS Executive 2; UBS Executive 1
Subject: Next week


I spoke to Tom just now and reiterated the messages you conveyed to him. Overall, he was receptive. I am sure he will become more comfortable as we all speak with one voice and show him some attention.


UBS Executive 3

—–Original Message——
From: Kengeter, Carsten
Sent: Friday, July 10, 2009 10:53 PM
To: Wilmot-Sitwell, Alexander; UBS Executive 3; UBS Executive 2; UBS Executive 1
​Subject: Next week

I would like you call Tom Hayes in Tokyo please and reiterate my words of comfort to him. He will stay and not go to Citi.

We will speak directly on the phone and I will explain exactly what I told him.



Oct. 18, 2013 Journal Ordered Not to Divulge Libor Names U.K. Prosecutors Win Injunction Amid Investigation

LONDON—British prosecutors on Thursday obtained a court order prohibiting The Wall Street Journal from publishing names of individuals the government planned to implicate in a criminal-fraud case alleging a scheme to manipulate benchmark interest rates.A British judge ordered the Journal and David Enrich, the newspaper's European banking editor, to comply with a request by the U.K.'s Serious Fraud Office prohibiting the newspaper from publishing names of individuals not yet made public in the government's ongoing investigation into alleged manipulation of the London interbank offered rate, or Libor. The order, which applies to publication in England and Wales, also demanded that the Journal remove "any existing Internet publication" divulging the details. It threatened Mr. Enrich and "any third party" with penalties including a fine, imprisonment and asset seizure.

The Journal received word of the order from the SFO by email at 7:18 p.m. London time. The news organization already had published on Dow Jones Newswires and the Journal's website,, an article by Mr. Enrich and reporter Jenny Strasburg that divulged names of traders and brokers that British prosecutors expect to publicly name next week. The article was taken down from the website but appears in Friday's print editions of the Journal circulated in the U.S. and in Asia. The article said the government was preparing to name roughly two dozen traders and brokers, adding that prosecutors were still finalizing their plans and that the list could change, citing people familiar with the process. Inclusion on the list doesn't represent a formal accusation of wrongdoing and doesn't mean the individuals will be charged with crimes. "This injunction is a serious affront to press freedom," said Dow Jones & Co., publisher of the Journal. "We have been left with no choice but to remove the previously published story from and to withhold publication from the print edition of The Wall Street Journal Europe. However, we will continue to vigorously fight the injunction in the coming days."

Under U.K. law—which seeks to balance freedom of the press with personal privacy and the integrity of the judicial process—it isn't unusual for the courts to impose reporting restrictions on the media to prevent them from reporting details that prosecutors believe could jeopardize an investigation or case. Even celebrities can obtain court orders to prevent the reporting about embarrassing revelations about their personal lives. In some instances, the orders are granted in an anonymous form so the media can't reveal the identity of the people who obtained them. The situation in Britain marks a contrast to the U.S. In the U.S., court orders preventing media from reporting something are exceedingly rare, and typically would be considered only in exceptional circumstances involving, for example, threats to national security. Some other European countries have even stronger privacy protection laws than the U.K. A spokeswoman for the Serious Fraud Office declined to comment on the court order. 






Lobbying firm Clark Lytle Geduldig & Cranford letter addressed to one of CLGC’s clients, the American Bankers Association.

CLGC’s memo proposes that the ABA pay CLGC $850,000 to conduct “opposition research” on Occupy Wall Street in order to construct “negative narratives” about the protests and allied politicians.

The memo also asserts that Democratic victories in 2012 would be detrimental for Wall Street and targets specific races in which it says Wall Street would benefit by electing Republicans instead. 


2013 Homeowners who are 90+ days late on their mortgages will now be automatically eligible for a mortgage modification. 

The program is only available to loans owned or guaranteed by Fannie and Freddie, which have been government-backed and controlled since late 2008. The relief would come in the form of a reduced interest rate, extended timeline for payments, or other measures.


2012 Instead of Bank of America foreclosing on some Florida homeowner, the homeowners had sheriff's deputies foreclose on Collier County, Bank of America. 

Todd Allen Helps homeowner foreclosing on a bank

It started five months ago when Bank of America filed foreclosure papers on the home of a couple, who didn't owe a dime on their home. The couple said they paid cash for the house. The case went to court and the homeowners were able to prove they didn't owe Bank of America anything on the house. In fact, it was proven that the couple never even had a mortgage bill to pay. A Collier County Judge agreed and after the hearing, Bank of America was ordered, by the court to pay the legal fees of the homeowners, Maurenn Nyergers and her husband.  The Judge said the bank wrongfully tried to foreclose on the Nyergers' house. After more than 5 months of the judge's ruling, the bank still hadn't paid the legal fees, and the homeowner's attorney did exactly what the bank tried to do to the homeowners. He seized the bank's assets. "They've ignored our calls, ignored our letters, legally this is the next step to get my clients compensated, " attorney Todd Allen told CBS.

Sheriff's deputies, movers, and the Nyergers' attorney went to the bank and foreclosed on it. The attorney gave instructions to remove desks, computers, copiers, filing cabinets and any cash in the teller's drawers. After about an hour of being locked out of the bank, the bank manager handed the attorney a check for the legal fees. "As a foreclosure defense attorney, this is sweet justice" says Allen.  Allen says this is something that he sees often in court, banks making errors because they didn't investigate the foreclosure and it becomes a lengthy and expensive battle for the homeowner.


7/9/14 SEC’s High-Speed Trader Plan Embraced by Exchange Leaders​