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Posts Tagged ‘SEC

Globalization and Debt: a return to slavery?

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 Taibbi: “Orwellian” SEC May Have Been Hiding Big Wall Street Crimes
By Sarah Seltzer | AlterNet

 

Shock Doctrine in Practice: The Connection Between Nighttime Robbery In the Streets and Daytime Robbery By Elites

By Naomi Klein / The Nation   When you rob people of what little they have, in order to protect the interests of those who have more than anyone deserves, you should expect resistance.

 

Debt: The First Five Thousand Years

By David Graeber

Anthropologist David Graeber argues that it is only with a general historical understanding of debt and its relationship to violence that we can begin to appreciate our emerging epoch. Here he begins to fill in our historical knowledge gap

 

Americans Don’t Realize Just How Badly We’re Getting Screwed by the Top 0.1 Percent Hoarding the Country’s Wealth

By David DeGraw | Amped Status

 


Written by laudyms

August 18, 2011 at 9:56 am

Government sues bankers over offenses government regulators ignored

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Left Hand, Meet Right Hand

The government sues bankers over offenses government regulators once ignored.

By Bethany McLean Tuesday, March 29, 2011, Slate

Kerry Killinger. Click image to expand.

A couple of weeks ago, the government started signaling, at long last, that it was ready to get tough on the bankers who caused the 2008 financial crisis. On March 16 the Federal Deposit Insurance Corporation, or FDIC, sued three former top executives of Washington Mutual, or WaMu, for taking “extreme and historically unprecedented risks,” thereby causing the bank to lose “billions of dollars.” That same day, the New York Times reported that the Securities and Exchange Commission had sent so-called Wells notices—often a sign that civil charges are imminent—to a handful of former executives at mortgage-securitization giants Fannie Mae and Freddie Mac.

The targets seem well-chosen. The collapse of WaMu, acquired by JPMorgan Chase at a fire-sale price in the fall of 2008 was, according to the FDIC, the biggest bank failure in U.S. history. The FDIC is seeking to recover $900 million from the three bankers. Fannie and Freddie were taken over by the government in the fall of 2008. So far, they have cost taxpayers about $130 billion.

Perhaps you’re thinking: If only the government had known at the time what these scoundrels were up to, we could all have been spared a great deal of pain. The trouble with that line of reasoning is that, um, the government did know what was going on. The Office of Thrift Supervision, which regulated WaMu, and the Office of Housing Enterprise Oversight, which regulated Fannie and Freddie, were supervising the very behavior that their sister agencies are now suing over. The government’s lawsuits call to mind a cynical boast by Burt Lancaster, playing tabloid power broker J.J. Hunsecker, in the 1957 noir classic Sweet Smell of Success: “My right hand hasn’t seen my left hand in 30 years.”

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Did BP Cronies Sell Stock Early Due to Insider Info?

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June 17, 2010

Washington’sBlog is reporting that the initial BP oil well blow out may have begun in February:

Did the BP Oil Well Really Blow Out in February, Instead of April?

The Deepwater Horizon blew up on April 20th, and sank a couple of days later. BP has been criticized for failing to report on the seriousness of the blow out for several weeks.

However, as a whistleblower previously told 60 Minutes, there was an accident at the rig a month or more prior to the April 20th explosion:

[Mike Williams, the chief electronics technician on the Deepwater Horizon, and one of the last workers to leave the doomed rig] said they were told it would take 21 days; according to him, it actually took six weeks.

With the schedule slipping, Williams says a BP manager ordered a faster pace.

“And he requested to the driller, ‘Hey, let’s bump it up. Let’s bump it up.’ And what he was talking about there is he’s bumping up the rate of penetration. How fast the drill bit is going down,” Williams said.

Williams says going faster caused the bottom of the well to split open, swallowing tools and that drilling fluid called “mud.”

“We actually got stuck. And we got stuck so bad we had to send tools down into the drill pipe and sever the pipe,” Williams explained.

That well was abandoned and Deepwater Horizon had to drill a new route to the oil. It cost BP more than two weeks and millions of dollars. ..snip..

As Bloomberg reports today, problems at the well actually started in February:

BP Plc was struggling to seal cracks in its Macondo well as far back as February, more than two months before an explosion killed 11 and spewed oil into the Gulf of Mexico.

It took 10 days to plug the first cracks, according to reports BP filed with the Minerals Management Service that were later delivered to congressional investigators. Cracks in the surrounding rock continued to complicate the drilling operation during the ensuing weeks. Left unsealed, they can allow explosive natural gas to rush up the shaft.

“Once they realized they had oil down there, all the decisions they made were designed to get that oil at the lowest cost,” said Peter Galvin of the Center for Biological Diversity, which has been working with congressional investigators probing the disaster. “It’s been a doomed voyage from the beginning.”  read entire post here

Meanwhile, others have reported that:

Goldman Sachs sold $250 million of BP stock before spill

….Other asset management firms also sold huge blocks of BP stock in the first quarter — but their sales were a fraction of Goldman’s. Wachovia, which is owned by Wells Fargo, sold 2,667,419 shares; UBS, the Swiss bank, sold 2,125,566 shares.

Wachovia and UBS also sold much larger percentages of their BP stock, at 98 percently and 97 percent respectively.

Wachova parent Wells Fargo, however, bought 2.3 million shares in the quarter, largely discounting Wachovia’s sales……….

A reasonable observer might conclude that insider information was making the rounds between February and April.  And probably the SEC will be the last to know.

–Claudia

SEC: Government Destroyed Documents Regarding Pre-9/11 Put Options

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Washington’s Blog June 14, 2010

On September 19, 2001, CBS reported:

Sources tell CBS News that the afternoon before the attack, alarm bells were sounding over unusual trading in the U.S. stock options market.

An extraordinary number of trades were betting that American Airlines stock price would fall.

The trades are called “puts” and they involved at least 450,000 shares of American. But what raised the red flag is more than 80 percent of the orders were “puts”, far outnumbering “call” options, those betting the stock would rise.

Sources say they have never seen that kind of imbalance before, reports CBS News Correspondent Sharyl Attkisson. Normally the numbers are fairly even.

After the terrorist attacks, American Airline stock price did fall obviously by 39 percent, and according to sources, that translated into well over $5 million total profit for the person or persons who bet the stock would fall.

***

At least one Wall Street firm reported their suspicions about this activity to the SEC shortly after the attack.

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Simon Johnson: Fraud at the heart of Wall Street

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Our Pecora Moment

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By Simon Johnson

We have waited long and patiently for our Ferdinand Pecora moment – a modern equivalent of the episode when a tough prosecutor from New York seized the imagination of the country in the early 1930s and, over a series of congressional hearings: laid bare the wrong-doings of Wall Street in simple and vivid terms that everyone could understand, and created the groundswell of public support necessary for comprehensive reregulation.  On Friday, that moment finally arrived.

There is fraud at the heart of Wall Street, according to the Securities and Exchange Commission.  Pecora took on National City Bank and J.P. Morgan (the younger); these were the supposedly untouchable titans of their day.  The SEC is taking on Goldman Sachs; no firm is more powerful.

Pecora exposed the ways in which leading banks mistreated their customers – typically, retail investors.  The SEC alleges, with credible detail, that Goldman essentially set up some trusting clients and deliberately misled them – to the tune of effectively transferring $1 billion from them to a particular unscrupulous investor.

Pecora had the drama of the congressional hearing room and used his skills as an interrogator to batter the bastions of Wall Street, day-after-day, with gruesome and convincing detail.  We don’t know where and when, but the SEC action points in one direction only: Lloyd Blankfein (CEO of Goldman) in the witness box, while John Paulson (unindicted co-conspirator) waits in the on-deck circle.

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