Wells Fargo

This Global Financial Fraud And Its Gatekeepers

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The media’s ‘bad apple’ thesis no longer works. We’re seeing systemic corruption in banking – and systemic collusion.

Naomi Wolf – Last fall, I argued that the violent reaction to Occupy and other protests around the world had to do with the 1%ers’ fear of the rank and file exposing massive fraud if they ever managed get their hands on the books. At that time, I had no evidence of this motivation beyond the fact that financial system reform and increased transparency were at the top of many protesters’ list of demands.

But this week presents a sick-making trove of new data that abundantly fills in this hypothesis and confirms this picture. The notion that the entire global financial system is riddled with systemic fraud – and that key players in the gatekeeper roles, both in finance and in government, including regulatory bodies, know it and choose to quietly sustain this reality – is one that would have only recently seemed like the frenzied hypothesis of tinhat-wearers, but this week’s headlines make such a conclusion, sadly, inevitable. Continue reading →

Travis Waldron ~ Former MF Global CEO Jon Corzine Gets $8 Million Pay Package After Firm Went Bankrupt

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Nation Of Change | May 22 2012

Jon Corzine, the former chief executive of bankrupt financial firm MF Global, received an $8 million pay package in the year his company plummeted into bankruptcy and faced a shortfall in customer funds totaling $1.6 billion.

Corzine resigned from the firm and turned down an $11 million severance package after MF Global filed for bankruptcy October, and he is not likely to realize the more than $5 million of his pay package that is tied to the firm’s now worthless stock. But he didn’t walk away empty-handed, the Wall Street Journal reports:

About $5.35 million of Mr. Corzine’s compensation came in the form of stock options, which are now worthless as a result of MF Global’s failure. Still, the former New Jersey governor and Goldman Sachs Group Inc. chairman got more than $3 million in cash compensation, including a $1.25 million bonus.

Though Corzine may be the most extreme example, he isn’t the only financial industry CEO whose pay is out-of-whack with the performance of the company he oversees. In 2011, Bank of America CEO Brian Moynihan made six times what he made in 2010 even as the bank’s stock price was cut in half. Goldman Sachs CEO Lloyd Blankfein’s pay increased 13.7 percent (to $19 million) in 2011, even as shareholder return declined 45.6 percent. Wells Fargo CEO John Stumpf received a 2.1 percent bump in pay (to $17.9 million); the company’s shareholders saw their returns decline 9.5 percent.

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Massachusetts Files Major Foreclosure-Abuse Lawsuit

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Tim McLaughlin & Aruna Viswanatha (Reuters) | RS_News
December 2 2011

Bank of AmericaThe Massachusetts attorney general has filed a lawsuit against five large U.S. banks accusing them of deceptive foreclosure practices, a signal of ebbing confidence that a multi-state agreement can be worked out.

Attorney General Martha Coakley said on Thursday she filed the lawsuit partly because it has been taking too long to hammer out a nationwide settlement.

For more than a year, state and federal officials have been negotiating a deal in which banks would pay billions of dollars in fines – to go toward housing relief – in exchange for legal protection against future suits.

The Massachusetts lawsuit, filed in state court in Boston, accuses Bank of America Corp, JPMorgan Chase & Co Inc, Citigroup Inc, Wells Fargo & Co and GMAC of deceptive foreclosure practices, such as using robo-signers and false documents.

“Our suit alleges that the banks have charted a destructive path by cutting corners and rushing to foreclose on homeowners without following the rule of law,” Coakley said in a statement.

The attorney general in Iowa, Tom Miller, who is leading the negotiations for the states, said in a statement they hope to reach a settlement “soon.” He also said Coakley had indicated she is still open to joining the settlement.

“We’re optimistic that we’ll settle on terms that will be in the interests of Massachusetts,” Miller said.

However, analysts said Coakley’s lawsuit is a bad sign for banks, which hope a deal with states and federal authorities could help the industry move beyond the legal fallout that has dogged it since the peak of the financial crisis.

“I can’t say anything is dead, but it sure looks like this is a negative. The banks are going to have these suits out there for years.” said Paul Miller, a bank analyst with FBR Capital Markets.

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Mortgage Servicers ~ Getting Away With the Perfect Crime?

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Matt Stoller (New Deal 2.0) | RS_News
29 November 11

OPINION | Without prosecutions, there’s nothing keeping fraud from becoming a standard business practice.

In 2004, the FBI warned Congress of an “epidemic of mortgage fraud,” of unscrupulous operators taking advantage of a booming real estate market. Less than two years later, an accounting scandal at Fannie Mae tipped us off that something was very wrong at the highest levels of corporate America.

Of course, we all know what happened next. Crime invaded the center of our banking system. Wall Street CEOs were signing on to SEC documents knowing they contained material misstatements. The New York Fed, riddled with conflicts of interest, shoveled money to large banks and tried to hide it under the veil of central bank independence. Even Tim Geithner noted that Lehman had “air in the marks” in its valuations of asset-backed securities, as the bankruptcy examiner’s report showed that accounting manipulation to disguise the condition of the balance sheet was a routine management tool at the bank. There’s a reason Charles Ferguson got an Academy Award for his work on the documentary Inside Job.

And yet, no handcuffs. The big news on prosecutions in the traditionally high-powered Southern District of New York are convictions for relatively petty insider trading that are unrelated to the collapse of the economy. The criminal charges could have been filed in the 1980s. U.S. Attorney Preet Bharara has brought minor civil suits against banks, but nothing significant, and no criminal indictments for the Ponzi scheme of the last four years.

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