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Fueled by Recession, U.S. Wealth Gap Is Widest in Decades, Study Finds
2014-12-17, New York Times
Posted: 2014-12-22 07:52:03
http://www.nytimes.com/2014/12/18/business/economy/us-wealth-gap-widest-in-at...

A report released on Wednesday by the Pew Research Center found that the wealth gap between the countrys top 20 percent of earners and the rest of America had stretched to its widest point in at least three decades. Last year, the median net worth of upper-income families reached $639,400, nearly seven times as much of those in the middle, and nearly 70 times the level of those at the bottom. There has been growing attention to the issue of income inequality. But while income and wealth are related ... the wealth gap zeros in on a different aspect of financial well-being: how much money and other assets you have accumulated over time. The Great Recession destroyed a significant amount of middle-income and lower-income families wealth, and the economic recovery has yet to be felt for them, the report concluded. The median household net worth last year for those in the middle was $96,500, only slightly above the $94,300 mark it hit in 1983 (after being adjusted for inflation). A poor household actually had a higher median net worth 30 years ago ($11,400 in 1983) than it counted last year ($9,300). Compare those results with the top fifth of income earners. In 1983, when the Fed began collecting the data, that group had a median wealth of $318,000; in 2013 it owned more than twice that.

Note: For more along these lines, see concise summaries of deeply revealing income inequality news articles from reliable major media sources.


The Coin of the Realm
2014-12-16, Chicago Tribune
Posted: 2014-12-22 07:47:46
http://www.chicagotribune.com/news/columnists/sns-201412161030--tms--amvoices...

The Securities and Exchange Act of 1934 banned insider trading but left it up to the Securities and Exchange Commission and the courts to define it. Which they have -- in recent decades so broadly that confidential information [is now Wall Street's] "coin of the realm." If a CEO tells his golf buddy that his company is being taken over, and his buddy makes a killing on that information, no problem. If his buddy leaks the information to a hedge fund manager and doesn't say where it came from, the hedge fund manager can also use the information to make a bundle. CEOs and other top executives ... routinely use their own inside knowledge of when their companies will buy back large numbers of shares from the public -- thereby pumping up share prices -- in order to time their own personal stock transactions. That didn't used to be legal. Until 1981, the Securities and Exchange Commission required companies to publicly disclose the amount and timing of their buybacks. But Ronald Reagan's SEC removed those restrictions. Then, George W. Bush's SEC allowed top executives, even though technically company "insiders" ... to quietly cash in their stock options without public disclosure. Now it's normal practice. Many CEOs are making vast fortunes not because they're good at managing their corporations but because they're good at using insider information.

Note: Is the trend to relax the rules on insider trading related to the revolving door between big banks and government? For more along these lines, see these concise summaries of deeply revealing articles about widespread corruption in government and banking and finance.


Warren leads liberal Democrats rebellion over provisions in $1 trillion spending bill
2014-12-10, Washington Post
Posted: 2014-12-15 14:50:53
http://www.washingtonpost.com/business/economy/warren-leads-liberal-democrats...

Congressional liberals rebelled Wednesday against a must-pass spending bill that would ... roll back critical limits on Wall Street and sharply increase the influence of wealthy campaign donors. Sen. Elizabeth Warren (D-Mass.), a popular figure on the left, led the insurrection with a speech on the Senate floor, calling the $1.01 trillion spending bill the worst of government for the rich and powerful. Meanwhile, White House press secretary Josh Earnest said, I dont think the vast majority of Democrats or even Republicans are going to look too kindly on a Congress thats ready to go back and start doing the bidding of Wall Street interests again. On the Senate floor, Warren said the changes in the spending bill would let derivatives traders on Wall Street gamble with taxpayer money and get bailed out by the government when their risky bets threaten to blow up our financial system. She added: These are the same banks that nearly broke the economy in 2008 and destroyed millions of jobs. Rep. Chris Van Hollen (D-Md.), who opposed the 2013 bill, said he would vote against the new spending measure in its current form. The change to Dodd-Frank coupled with the campaign finance provision makes for a toxic blend, he said. Van Hollen was one of the few Democrats willing to risk a government shutdown by blocking the bill. Pressed by reporters, even Warren would not make that commitment.

Note: For more along these lines, see these concise summaries of deeply revealing articles about widespread corruption in government and banking and finance.


At least 19 UK firms under investigation for an alleged conspiracy to make $20bn of dirty money seem legitimate
2014-10-15, The Independent (One of the UK's leading newspapers)
Posted: 2014-12-07 23:17:23
http://www.independent.co.uk/news/business/news/the-great-british-money-laund...

Front companies in the UK are at the heart of an investigation into ... a conspiracy to make $20bn (12.5bn) of dirty money look legitimate. The funds are believed to have come from major criminals and corrupt officials around the world. An investigation by The Independent and the Organised Crime and Corruption Reporting Project, an NGO, has identified dozens of ... front companies in the UK which carried out massive phoney business deals between themselves. These front companies then sued each other in courts in Moldova, demanding the repayment of hundreds of millions of pounds of loans. A judge in Moldova ... would rule in favour of the claimant company, which would then receive the cash from the other front firm with an all-important signed court document ordering the debt to be paid. But rather than being transferred from one legitimate British company to another, the funds were being routed from Russia, where gangs from around the world go to launder money from corruption, drug dealing, prostitution and people smuggling. Their tainted money would first be put into the UK front companies accounts in Moldova before being transferred to another bank in Latvia. This final stage adds to the dirty moneys clean appearance. The UK bank accounts involved include ones at UBS in London, HSBC, RBS, NatWest and Citibank.

Note: Here is a diagram of this complex international money laundering scam. For more along these lines, see these concise summaries of deeply revealing articles about widespread corruption in government and banking and finance.


HSBC and Goldman sued for allegedly fixing metal price
2014-11-26, BBC News
Posted: 2014-12-01 02:24:38
http://www.bbc.com/news/business-30209544

Goldman Sachs and HSBC are among four platinum and palladium dealers to be sued in New York for allegedly fixing the price of the metals. The four companies are said to have rigged prices for eight years. BASF and Standard bank were also sued in the first lawsuit of its kind in the US. The four defendants declined to comment. Modern Settings, a Florida-based maker of jewellery and police badges, said purchasers lost millions of dollars. The Florida company filed the complaint in Manhattan federal court. The companies were accused of having conspired since 2007 to rig the twice-daily platinum and palladium fixings. It is alleged that the companies illegally shared customer data and then used that information to engage in front running ... a form of market manipulation in which traders profit by using information about their clients' trading intentions. Traders will often know how a particular client order will affect the market and can place their own trades ahead of that order to benefit. The four companies in this case are also accused of manufacturing "spoof" orders. Goldman, HSBC and Standard Bank declined to comment. International regulators have tightened scrutiny of pricing benchmarks in recent years. The tighter regulation comes after a currency trading scandal and the Libor scandal, which fixed a benchmark interest rate.

Note: For more along these lines, see these concise summaries of deeply revealing articles about widespread corruption in banking and finance. For additional information, see the excellent, reliable resources provided in our Banking Corruption Information Center.


New Scrutiny of Goldmans Ties to the New York Fed After a Leak
2014-11-19, New York Times
Posted: 2014-12-01 02:22:12
http://dealbook.nytimes.com//2014/11/19/rising-scrutiny-as-banks-hire-from-th...

From his desk in Lower Manhattan, a banker at Goldman Sachs thumbed through confidential documents courtesy of a source inside the United States government. The banker came to Goldman through the so-called revolving door ... that connects financial regulators to Wall Street. He joined in July after spending seven years as a regulator at the Federal Reserve Bank of New York, the governments front line in overseeing the financial industry. He received the confidential information, lawyers briefed on the matter suspect, from a former colleague who was still working at the New York Fed. The previously unreported leak, recounted in interviews with the lawyers briefed on the matter who spoke anonymously ... illustrates the blurred lines between Wall Street and the government. When Goldman hired the former New York Fed regulator, who is 29, it assigned him to advise the same type of banks that he once policed. And the banker obtained confidential information [that] provided Goldman a window into the New York Feds private insights. The emergence of the leak comes as questions mount about a perceived coziness between the New York Fed and Wall Street banks Goldman in particular. Revelations from a former New York Fed employee, Carmen Segarra, recently stoked that debate. Ms. Segarra released taped conversations suggesting that her supervisors went soft on Goldman. The new accounts of a regulator and a banker actually sharing confidential documents violating a cardinal rule of the regulatory world suggest that ... Goldman, perhaps more than any other Wall Street bank, appears to be entwined with the New York Fed.

Note: For more along these lines, see these concise summaries of deeply revealing articles about widespread corruption in government and banking and finance. For additional information, see the excellent, reliable resources provided in our Banking Corruption Information Center.


The Fed Needs Governors Who Arent Wall Street Insiders
2014-11-19, Wall Street Journal
Posted: 2014-11-23 18:17:28
http://online.wsj.com/articles/elizabeth-warren-and-joe-manchin-the-fed-needs...

The Federal Reserve's Board of Governors and the New York Fed have been responsible for supervising Wall Street banks. After the 2008 crisis and the regulatory lapses it revealed, Congress gave the Fed even more oversight authority. Two recent reports highlight that the Fed isnt very good at supervising certain banks. In September, Carmen Segarra, a former bank examiner at the Federal Reserve Bank of New York, released secret recordings she had made of meetings at the New York Fed in 2012. The recordings revealed that New York Fed employees had identified concerns with a proposed Goldman Sachs deal. The New York Fed didnt attempt to make Goldman address these concerns. The recordings also showed Ms. Segarras superiors pressuring her to soften her finding that Goldman did not comply with federal regulations on conflicts of interest. An October report from the Feds Office of Inspector General provided additional confirmation that the Fed is failing to oversee the big banks. The report found that the New York Fed had failed to examine J.P. Morgan Chases Chief Investment Office despite a recommendation to do so in 2009. The report concluded that the New York Fed needed to improve its supervision of the biggest, most complex banks. Were all counting on the Fed to monitor the big banks and stop them from taking on too much risk, but evidence is mounting that this faith in the Fed is misplaced.

Note: If the above link fails, click here. For more along these lines, see these concise summaries of deeply revealing articles about widespread corruption in government and banking and finance. For additional information, see the excellent, reliable resources provided in our Banking Corruption Information Center.


Spencer Bachus, incoming House financial chairman, gets heat for saying regulators should 'serve' banks
2010-12-15, Los Angeles Times
Posted: 2014-11-23 18:06:14
http://latimesblogs.latimes.com/money_co/2010/12/spencer-bachus-banks-regulat...

The incoming Republican chairman of the House Financial Services Committee is facing fire for recently saying that Washington and banking regulators should "serve" the banks. Rep. Spencer Bachus (R-Ala.), who recently beat back a challenge from Ed Royce of Fullerton to win the chairmanship of the powerful committee, made the comments in an interview with the Birmingham News. "In Washington, the view is that the banks are to be regulated, and my view is that Washington and the regulators are there to serve the banks," Bachus said. The Democratic Congressional Campaign Committee quickly dubbed him "Big Bank Bachus" and highlighted the more than $1 million in campaign contributions he has received from Wall Street over the years. Outgoing Financial Services Committee Chairman Barney Frank (D-Mass.) jumped into the fray. He slammed Bachus' intentions to scale back the recently enacted financial reform law, including trying to limit the powers of the new Consumer Financial Protection Bureau, saying the comments showed "a seriously flawed view of the relationship that should exist between financial institutions and those who set the rules governing safety and soundness. His view of the role of regulation, expressed before he clarified his genuine belief, explains why he is so opposed to an independent consumer financial protection bureau, and why he wants to weaken restraints on speculation by banks with depositors money, Frank said.

Note: For more along these lines, see these concise summaries of deeply revealing articles about widespread corruption in government and banking and finance. For additional information, see the excellent, reliable resources provided in our Banking Corruption Information Center.


The $9 Billion Witness: Meet JPMorgan Chase's Worst Nightmare
2014-11-06, Rolling Stone
Posted: 2014-11-16 22:02:21
http://www.rollingstone.com/politics/news/the-9-billion-witness-20141106

[Alayne] Fleischmann is the central witness in one of the biggest cases of white-collar crime in American history, possessing secrets that JPMorgan Chase CEO Jamie Dimon late last year paid $9 billion ... to keep the public from hearing. In 2006, as a deal manager at the gigantic bank, Fleischmann first witnessed, then tried to stop, what she describes as "massive criminal securities fraud." This past year she watched as Holder's Justice Department struck a series of historic settlement deals with Chase, Citigroup and Bank of America. The root bargain in these deals was cash for secrecy. The idea that Holder had cracked down on Chase was ... fiction. The settlement, says Kelleher, "was ... crafted to bypass the court system. The DOJ and JP-Morgan were trying to avoid disclosure of their dirty deeds." Chase emerged with barely a scratch. The settlement put you, me and every other American taxpayer on the hook. Chase was allowed to treat some $7 billion of the settlement as a tax write-off. The bank's share price soared six percent on news of the settlement. Chase actually made money from the deal. What's more, to defray the cost of this and other fines, Chase last year laid off 7,500 lower-level employees. But no one made out better than [Chase CEO Jamie] Dimon. The board awarded [him] a 74 percent raise. The people who stole all those billions are still in place. And the bank is more untouchable than ever. Mary Jo White and Andrew Ceresny, who represented Chase for some of this case, have since been named to the two top jobs at the SEC.

Note: Read this entire, fascinating article to understand just how corrupt both the banks and our government are. For more along these lines, see these concise summaries of deeply revealing articles about widespread corruption in government and banking and finance. For additional information, see the excellent, reliable resources provided in our Banking Corruption Information Center.


Law Lets I.R.S. Seize Accounts on Suspicion, No Crime Required
2014-10-25, New York Times
Posted: 2014-11-03 02:00:20
http://www.nytimes.com/2014/10/26/us/law-lets-irs-seize-accounts-on-suspicion...

For almost 40 years, Carole Hinders has dished out Mexican specialties at her modest cash-only restaurant. She deposited the earnings at a small bank branch a block away until last year, when two tax agents knocked on her door and informed her that they had seized her checking account. She has not been charged with any crime. The money was seized solely because she had deposited less than $10,000 at a time. Using a law designed to catch drug traffickers ... the government has gone after run-of-the-mill business owners and wage earners without so much as an allegation that they have committed serious crimes. The government can take the money without ever filing a criminal complaint. Richard Weber, the chief of Criminal Investigation at the I.R.S., said in a written statement ... that making deposits under $10,000 to evade reporting requirements, called structuring, is ... a crime. The Institute for Justice, a Washington-based public interest law firm ... analyzed structuring data from the I.R.S., which made 639 seizures in 2012, up from 114 in 2005. Only one in five was prosecuted as a criminal structuring case. Law enforcement agencies get to keep a share of whatever is forfeited. This incentive has led to the creation of a law enforcement dragnet, with more than 100 multiagency task forces combing through bank reports, looking for accounts to seize. There are often legitimate business reasons for keeping deposits below $10,000, said Larry Salzman, a lawyer with the Institute for Justice. For example, he said, a grocery store owner in Fraser, Mich., had an insurance policy that covered only up to $10,000 cash.

Note: For more along these lines, see concise summaries of deeply revealing civil liberties news articles.


4 Banks, Including JPMorgan, Fined in Europe Over Cartel Behavior
2014-10-21, New York Times
Posted: 2014-11-03 01:57:29
http://dealbook.nytimes.com//2014/10/21/4-banks-including-jpmorgan-fined-in-e...

The European Commission on Tuesday fined four major financial institutions 93.9 million euros, or about $120 million, over two types of activity that it deemed as cartel behavior. In one case, the European Commission fined JPMorgan Chase 61.7 million euros for manipulating the Swiss franc Libor benchmark interest rate in an illegal bilateral cartel with the Royal Bank of Scotland. Interest-rate derivatives such as forward rate agreements, swaps, futures and options are financial products intended to help manage interest-rate fluctuations. In December 2013, the European Union fined several global financial institutions a combined 1.7 billion to settle charges that they colluded to fix benchmark interest rates. Regulators accused R.B.S. and JPMorgan of trying to distort the process used to price interest rate derivatives. In a separate settlement also announced on Tuesday, the European Commission said R.B.S., UBS, JPMorgan and Credit Suisse, operated a cartel on bid-ask spreads of Swiss franc interest-rate derivatives, imposing fines worth a total of 32.4 million. from May to September 2007, R.B.S., UBS, JPMorgan and Credit Suisse agreed to quote to clients wider, fixed bid-ask spreads on certain categories of franc interest-rate derivatives. The banks maintained narrower spreads for trades among themselves. The aim was to lower the banks transaction costs and continue the flow of trades between themselves while preventing others from participating on the same terms in the franc derivatives market. Global financial institutions have paid more than $6 billion in fines over manipulating benchmark rates.

Note: For more along these lines, see the excellent, reliable resources provided in our Banking Corruption Information Center.


Nigeria Launches Electronic ID Cards
2014-08-28, BBC News
Posted: 2014-10-27 21:00:26
http://www.bbc.com/news/world-africa-28970411

Nigeria's president has formally launched a national electronic identity card, which all Nigerians will have to have by 2019 if they want to vote ... the first biometric card which can also be used to make electronic payments. MasterCard is providing the prepaid payment element and it hopes millions of Nigerians without bank accounts will now gain access to financial services. An attempt to introduce national ID cards in Nigeria 10 years ago failed. Analysts blame corruption for its failure. MasterCard said combining an identity card with a payment card for those aged 16 and over was a significant move. "It breaks down one of the most significant barriers to financial inclusion - proof of identity," MasterCard's Daniel Monehin said in a statement. The new cards show a person's photograph, name, age and unique ID number - and 10 fingerprints and an iris are scanned during enrolment. These details are intended to ensure that there are no duplicates on the system. During the pilot phase, which began registering names last October, 13 million MasterCard-branded ID cards will be issued. There are enrolment centres in all 36 states and there is no fee to get the card, though people will be charged in the event that it needs to be replaced. The Nigerian Identity Management Commission (NIMC), which is behind the rollout, is trying to integrate several government databases including those for driving licences, voter registration, health insurance, taxes and pensions.

Note: This identification scheme is underwritten by a major financial services company, and directly connects a citizen's political identity, financial identity, and biological identity to a centralized electronic database. To understand some of the dangers of this, see concise summaries of deeply revealing microchip implant news articles from reliable major media sources.


Our Dysfunctional Financial System
2014-10-02, Time Magazine
Posted: 2014-10-20 19:20:45
http://time.com/3455631/our-dysfunctional-financial-system/

Did anyone ever doubt that the New York Fed was in hock to Wall Street? Or that Fed bank examiners ... might fear alienating the powerful financiers on whom they depend for information or future jobs? Its one thing to know and another to hear in painful, crackling detail how the Feds financial cops slip on their velvet gloves to deal with Goldman Sachs. Or how Segarra, one of a group of examiners brought in after the financial crisis to keep a closer watch on the till, was fired, perhaps for doing her job. Consider one of the shady deals highlighted on the secret tapes of New York Fed meetings, which Segarra made with a spy recorder before she was let go and which were made public on Sept. 26. The Fed employees, who work inside the banks they examine (yes, its literally an inside job), knew the deal was dodgy. Numerous experts believe that the size of the financial sector is slowing growth in the real economy by sucking the monetary oxygen out of the room. Banks dont want to lend; they want to trade, often via esoteric deals that do almost nothing for anyone outside Wall Street. This disconnect between the real economy and finance is now being closely studied by policymakers and academics. Adair Turner, a former British banking regulator, thinks that only about 15% of U.K. financial flows go to the real economy; the rest stay within the financial system, propping up existing corporate assets, supporting trading and enabling $40 million briefcase-watching fees. If the New York Fed really wants to redeem itself, it might consider commissioning a similar study to look at Wall Streets contribution to the U.S. economy.

Note: For more along these lines, see concise summaries of deeply revealing financial news articles from reliable major media sources. For more along these lines, see the excellent, reliable resources provided in our Banking Corruption Information Center.


Warren Calls for Hearings on New York Fed Allegations
2014-09-27, BloombergBusinessweek
Posted: 2014-10-08 20:57:32
http://www.businessweek.com/news/2014-09-26/new-york-fed-denies-allegations-o...

U.S. Senator Elizabeth Warren called for congressional hearings into allegations that the Federal Reserve Bank of New York has been too deferential to the firms it regulates. A radio program about the regional Fed bank raised disturbing issues. Its our job to make sure our financial regulators are doing their jobs, Warren, a Massachusetts Democrat and member of the Senate Banking Committee, said in a statement yesterday. The program This American Life released the transcript of a broadcast that includes excerpts of conversations it said were secretly recorded by Carmen Segarra, a former New York Fed bank examiner who was fired in 2012, with some of her colleagues and her supervisor. In the transcript, Segarra described how she felt that her Fed colleagues were afraid of Goldman Sachs Group Inc. and handled it with kid gloves. Senator Sherrod Brown, an Ohio Democrat whos also on the banking committee, backed Warrens call for a probe. Segarra sued the New York Fed last October, alleging she was fired in May 2012 after refusing to change her findings on the conflict-of-interest policy. In 2009, New York Fed President William C. Dudley commissioned a probe into his own institutions practices by David Beim, a finance professor at Columbia Business School. In a report submitted that year and released by the Financial Crisis Inquiry Commission in 2011, Beim wrote that a number of people he interviewed at the reserve bank believe that supervisors paid excessive deference to banks and as a result they were less aggressive in finding issues or in following up on them in a forceful way.

Note: Listen to these revealing recordings and more. For more on this, see concise summaries of deeply revealing financial corruption news articles from reliable major media sources.


Sen. Warren: We Need Regulators Who 'Work For The American People'
2014-10-01, NPR Blog
Posted: 2014-10-08 20:56:03
http://www.npr.org/blogs/thetwo-way/2014/10/01/352852976/sen-warren-we-need-r...

Sen. Elizabeth Warren, a Democrat from Massachusetts, says newly released recordings of conversations between Federal Reserve officials show that the same kind of cozy relationships that led to the 2008 financial crisis still dominate Wall Street. "You really do, for a moment, get to be the fly on the wall that watches all of it, and there it is to be exposed to everyone: the cozy relationship, the fact that the Fed is more concerned about its relationship with a too-big-to-fail bank than it is with protecting the American public," Warren says. The recordings don't reveal anything outright illegal. Instead, they reveal Fed officials discussing "legal but shady" transactions and then wringing their hands over how to delicately bring them up with the bank. Warren, who before coming into office led an effort to create the U.S. Consumer Financial Protection Bureau, says that trepidation is another thing wrong with regulators today. "The fact that Goldman could mount a legal defense here is not really the point of these tapes. The point of these tapes is that the regulators are backing off long before anyone's in court making a legal argument about whether or not they came right up to the line or they crossed over the line." The bottom line, Warren says, is that the United States needs regulators "who understand that they work for the American people, not for the big banks."

Note: For more on this, see concise summaries of deeply revealing financial corruption news articles from reliable major media sources.


Elizabeth Warren: The market is broken
2014-09-05, CNN
Posted: 2014-09-15 07:07:22
http://money.cnn.com/2014/09/05/news/economy/elizabeth-warren-market-broken/i...

Senator Elizabeth Warren ... believes the most important [problem] to solve is how to get the American economy working for someone other than billionaires. It's a message she's been taking all over the country, and she isn't afraid to call banks, credit card companies and some employers cheats and tricksters. "The biggest financial institutions figured out they could make a lot of money by cheating people on mortgages, credit cards and payday loans," she told a packed auditorium at the Graduate Center of the City University of New York, where she spoke alongside New York Times columnist Paul Krugman. The biggest applause of the night was on three issues that come up frequently in Warren's speeches. 1) Financial regulation: Warren was the driving force behind the creation of the Consumer Financial Protection Bureau after the 2008 financial crisis. The agency has returned billions of dollars to Americans who were wronged. 2) Reducing student loans: Last summer Warren made headlines for arguing that student loans should have the same interest rates that banks get when they borrow money from the Federal Reserve. As she likes to remind people, "Student loans issued from 2007 to 2012 are on target to produce $66 billion in profit for the United States government." 3) Raising the minimum wage: "No one should work full time and still live in poverty," Warren said. Her other big push is for basic worker rights.

Note: For more on this, see concise summaries of deeply revealing income inequality news articles from reliable major media sources.


Goldman to Pay $3.15 Billion to Settle Mortgage Claims
2014-08-22, New York Times
Posted: 2014-09-02 11:01:14
http://dealbook.nytimes.com/2014/08/22/goldman-to-pay-3-15-billion-to-settle-...

Goldman Sachs is paying its largest bill yet to resolve a government lawsuit related to the financial crisis. The bank said ... that it had agreed to buy back $3.15 billion in mortgage bonds from Fannie Mae and Freddie Mac to end a lawsuit filed in 2011 by the Federal Housing Finance Agency, the federal regulator that oversees the two mortgage companies. The agency had accused Goldman of unloading low-quality mortgage bonds onto Fannie Mae and Freddie Mac in the run-up to the financial crisis. It estimates that Goldman is paying $1.2 billion more than the bonds are now worth. Most of the other 18 banks that faced similar suits from the housing agency have already reached settlements. The previous settlements have included penalties, which Goldman avoided. But Goldman had been hoping to avoid settling the suit altogether, contending as recently as last month that many of the governments claims should be dismissed. The $1.2 billion figure carries a sting because it is double the $550 million payment that Goldman made in 2010 to settle the most prominent crisis-era case it has faced the so-called Abacus case. Since then, Goldman has largely avoided the billion-dollar penalties paid by other banks for wrongdoing before the 2008 crisis. This week, Bank of America reached a $16.65 billion settlement with the Justice Department related to the banks handling of shoddy mortgages. In a separate deal this year, Bank of America agreed to pay $9.5 billion to settle its part of the housing finance agencys lawsuit. Some of that money was a penalty and the rest was used to buy back mortgage bonds.

Note: For more on this, see concise summaries of deeply revealing financial corruption news articles from reliable major media sources.


Iceland president: Letting banks fail helped recovery
2012-12-13, CNN
Posted: 2014-08-18 07:29:51
http://edition.cnn.com/2012/12/13/business/iceland-recovery

Four years after the country let its debt-ridden banks fail, and as the country's growth looks set to far outpace the eurozone, [Iceland's president Olafur Ragnar Grimsson] said the decision not to save the banks was "the most difficult I ever had to make," but maintained it was the right one. "Allowing the banks to fail is one of the fundamental reasons Iceland is now in a strong recovery with respect to other European countries," he said. Now, according to Grimsson, "Iceland is better placed to benefit by maintaining our present position, rather than to let the EU speak on our behalf." The 69-year-old president pointed to Norway and Greenland -- two other Arctic economies and non-European Union members -- as role models. However, Grimsson said he was not sure whether Iceland's strategy with its banks could have been replicated by other countries with similar problems, such as Ireland. "Being part of the eurozone, they couldn't devalue their currency. But they could have adopted our policy with respect to the banks," he said. The Icelandic krona fell sharply as a result of the financial collapse, helping the country recover by increasing demand for exports. "There are still scars," Grimsson said, "but on the whole, the will of the Icelandic people has enabled us to recover and move confidently towards the future."

Note: Watch a great video interview of Iceland's president discussing this matter. Iceland has gone through tremendous transformation that has greatly supported both the people and the economy of this nation. Why is this getting so little press coverage?


Citigroup to pay $7 billion for egregious misconduct leading up to financial crisis
2014-07-14, PBS
Posted: 2014-07-22 10:16:47
http://www.pbs.org/newshour/bb/citigroup-pay-7-billion-egregious-misconduct-l...

JUDY WOODRUFF: We should start praying. I wouldnt be surprised if half of these loans went down thats what a trader at Citigroup wrote in an e-mail in 2007, after reviewing thousands of mortgages bought and sold by the bank. Today, the Justice Department cited those very words as it announced a $7 billion settlement with the bank. The government said Citi committed egregious misconduct in the lead-up to the financial crisis. Of the $7 billion, Citigroup will pay $4 billion to the Justice Department. More than $2.5 billion is set aside for whats described as consumer relief. Tony West is associate attorney general. And he was the governments lead negotiator in this case. Lay out for us, what was this egregious conduct and how many people at Citigroup were engaged in it? TONY WEST: Citibank packaged securities, packaged loans, mortgage loans into these securities, which they sold to investors. What they didnt tell investors was what the actual quality of those loans were. And so you had these mortgage bond deals that had quality that was far less than what Citi was representing to investors that they were. JUDY WOODRUFF: And how many people knew about this, and did the knowledge go all the way to the top? TONY WEST: We know from the evidence that bankers were warned that the quality of the loans that they were packaging into these securities wasnt what they were telling investors they were, but they ignored those warning signs. They ignored that due diligence. Certainly enough ... bankers knew that we felt that we could demand a very high, in fact, an historically high, penalty from Citibank.

Note: For more on this, see concise summaries of deeply revealing financial corruption news articles from reliable major media sources.


WikiLeaks publishes 'secret draft' of world trade agreement
2014-06-19, CBC News (Canada's Public Broadcasting Network)
Posted: 2014-06-23 08:03:53
http://www.cbc.ca/news/world/wikileaks-publishes-secret-draft-of-world-trade-...

WikiLeaks has published what it calls "the secret draft text for the Trade in Services Agreement (TISA) Financial Services Annex," apparently covering 50 countries and most of the world's trade in services. "The draft Financial Services Annex sets rules which would assist the expansion of financial multinationals mainly headquartered in New York, London, Paris and Frankfurt into other nations by preventing regulatory barriers," the website says in a statement. The draft deal is seen as a way to prevent more regulation of financial services, despite calls for tighter regulatory measures that followed the 2007-08 world financial crisis. That market meltdown set the world's biggest banks up against critics who said governments needed to rein them in. The last round of TISA talks took place April 28 to May 2 in Geneva. WikiLeaks also [stated] that the U.S. is "particularly keen on boosting cross-border data flow" and that this would include personal and financial data. During his teleconference, [Assange] urged U.S. Attorney General Eric Holder to end a four-year-long grand jury investigation of Assange and WikiLeaks. "National security reporters are required by their profession to have intimate interactions in order to assess and verify and investigate the nature of the material that they are dealing with," he said. "So I call on Eric Holder today to immediately drop the ongoing national security investigation against WikiLeaks or resign."

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