Some two and a half years later (because that's how lawyers and judges often operate), Judge Rakoff has been
overruled on the Citigroup/SEC deal, but remains 100% Correct… which goes to show and as many have learned since 2008: What is often times
“legal” is in many instances amoral and “criminal" (malum in se).
Fear not Judge Rakoff, you may have lost this battle, but your arguments are winning the war. The U.S. government now charges banks with crimes, and the penalties are now running well into the billions.
Fear not Judge Rakoff, you may have lost this battle, but your arguments are winning the war. The U.S. government now charges banks with crimes, and the penalties are now running well into the billions.
A Tsunami of Cover-ups and Lies
“As Ferdinand Pecora, the Depression-era prosecutor, is supposed
to have said of the events leading to the Wall Street crash of 1929: Pitch
darkness was among the bankers’ stoutest allies.” - Gretchen Morgenson – NY TIMES
By J.M. Hamilton (12-4-11)
By J.M. Hamilton (12-4-11)
In
a land where back room dealing, and double dealing, in government, banking, and
many other facets of our lives, has become the norm, Judge Rakoff’s position on the Citigroup/SEC deal was a breath of fresh air.
The
Judge’s position, unfortunately, would appear to be – by current standards –
anachronistic. Mr. Rakoff’s appears to be standing against the tide of
history, more akin to a tsunami of cover ups and lies, and yelling
Please
recall Judge Rakoff, a Federal Judge, was supposed to rubber-stamp a deal between
the Securities and Exchange Commission and Citigroup, a bank that has been
bailed out by the U.S. taxpayer, ad nausem. In fact last I
checked the U.S. government still holds a substantive stake in Citigroup, as a
result of the bank’s failure in 2008. The “deal” was Citigroup would
cough up just north of a quarter billion dollars, and its role in selling,
possibly, fraudulent security products, like derivatives and CDOs during the
height of the financial crisis, would vanish w/out any admission of
responsibility or wrong doing.
How
convenient.
And yet this is the norm in our two tiered justice system,
where the public deals with one set of courts, and banks get fast track justice
with no trial, relatively light fines, and where the fines, themselves, are
considered a cost of doing business. Americans, of course, have become
numb to Wall Street’s recidivist activities. And so for Judge Rakoff to
say “no more,” was truly exceptional.
We can see why the Judge’s behavior was novel, almost rebellious: the Wall
Street cartel has co-opted our government, regulators, our judicial system,
rating agencies, and our laws and law making. Our opaque accounting
system is laughable, when we consider how derivatives and swap are not
accounted for in financial statements (often only receiving a footnote); and
Repos – an accounting maneuver/derivative product that helped bring down MF Global (not to mention Lehman), and with it possibly a billion plus in client
money disappearing – are an all too common practice.
Granted
Judge Rakoff’s decision could possibly mean more trials and the SEC spending more time proving its case against the major banks – at a time
when, as recently noted by Arthur Levitt on Bloomberg Radio (Hosted by Tom
Keene and Ken Prewitt), Republicans are starving the organization of money and funds. Mr. Levitt is the SEC’s former chairman. The
Republicans, lap dog of Wall Street, and advocate and stander bearer for the
one percent, quite possibly may believe they are doing “god’s work,” by
supporting a monopolistic cartel and restraining government agencies, like the
SEC. However, the SEC is the first, and often only, line of defense
against the predatory Wall Street oligopoly, in the protection of ordinary
Americans, investors, business – both big and small, and of course, the
government, itself.
But
can you hardly blame the Republicans? With all that money coming their
way from Wall Street, and presidential candidate Romney meeting with Jamie Dimon, (Mr. Romney, himself making his bones on Wall Street with private
equity’s Bain Capital), why not perpetuate crony capitalism and crony
democracy? After all, and gee-whiz, Wall Street paid back its TARP loans
with interest….isn’t it time to get off the cartel’s back?
And
therein lies the problem, because as much as Republicans would like to wish
away the financial crisis of 2008, and assure us that the banks’ have paid back
the U.S. taxpayer in full, quite the opposite has in fact happened. The Banks, who have received 7.0 plus trillion in handouts and government benefits, as reported by Bloomberg last week (that’s half of U.S. GDP), have not paid for
the damage they have caused to the real estate market (the cornerstone of life
savings and equity for many Americans), the economy, nor for their share of the
fiscal mess our government and economy is in.
Not
by a fraction.
Republicans
are often portrayed as being unfeeling, uncaring, and against the welfare
state… that paradigm does not hold up, however, when the welfare is gifted to
the Republican Party’s core constituency, the one percent.
So for Judge Rakoff to shine a bright light of truth on an unacceptable practice,
tantamount to a banking whitewash and cover-up, was both brave and the kind of
iconoclastic practice Americans need to see more of, in both business and government.
Some
might call Judge Rakoff a bully. I call the Judge a hero.
In the land where who you know and one’s connections, as often as not trumps the truth, Judge Rakoff’s act was a singularly courageous event.
Kudos and
accolades to Judge Rakoff!
Copyright JM Hamilton Publishing 2014
Copyright JM Hamilton Publishing 2014
No comments:
Post a Comment