Holder Admits: "Too Big To Fail, To Big To Jail"

[gator0254]

No - he is saying you can't prove responsibility to any specific person

And you can't just decide it was the executives and/or CEO

As he said this is all emotion - not legal proof of any crime

[orangeblueorangeblue]

Originally Posted by Row6

The crime - if there is one, and hard to believe there was not - was fraud, i.e., selling known junk while making money through the back door on knowing it was junk.

A. This isn't necessarily fraud. People legally sell junk all the time.

B. Assuming it is fraud - and bear in mind I doubt strongly it is for a number of reasons - who are you going to charge with it? Who did it?

[108]

Originally Posted by orangeblueorangeblue

A. This isn't necessarily fraud. People legally sell junk all the time.

B. Assuming it is fraud - and bear in mind I doubt strongly it is for a number of reasons - who are you going to charge with it? Who did it?

People legally sell junk as junk all the time, not as treasure

Wall St was being backed by the ratings agencies.

There was systematic fraud taking place

[orangeblueorangeblue]

Originally Posted by 108

People legally sell junk as junk all the time, not as treasure

Wall St was being backed by the ratings agencies.

There was systematic fraud taking place

Explain how.

Knowing something will someday lose value is not fraud.

[orangeblueorangeblue]

It simply must be a crime = emotion talking.

[108]

Originally Posted by orangeblueorangeblue

Explain how.

Knowing something will someday lose value is not fraud.

Does a triple A rating not mean anything?

They were bundling an selling subprime mortgages with the equivalent rating of a US bond

That's like knowingly selling a lemon

[Lawdog88]

Originally Posted by 108

Does a triple A rating not mean anything?

They were bundling an selling subprime mortgages with the equivalent rating of a US bond

That's like knowingly selling a lemon

You are getting close to the darling of the prosecutor's garden, i.e., conspiracy, to do something illegal, i.e., commit fraud or some definition thereof.

But there would have to be a common object of the conspiracy shared by the conspirators, with intent to commit the illegal act, and usually - though not necessarily required, but helpful - an overt act done in furtherance thereof.

Might be tough to tie the ends up in something this sweeping, but only those who would have thoroughly investigated the facts, would know that.

[Matthanuf06]

Originally Posted by G8trGr8t

Their concern is that prosecution will impact stock value and that is so big it will impact economy. If total value of any company is split up so that a big drop in value doesn't drag that whole DOW down that concern is negated.

Executives approving laundering drug money or funneling $ to Iran need to be prosecuted. Somebody somewhere entered the code required.to make the transfeer. Culpability should not be that hard to determine

And by splitting them up you ruin synergies, which cause values to drop and jobs to be lost.

Of course that doesn't make a nice leftist sound bite...

[MichaelJoeWilliamson]

Originally Posted by 108

Glass-Steagall would have prevented the banks from using insured depositories to underwrite private securities and dump them on their own customers.

Incorrect. The bonds and derivatives would have been underwritten, no matter what.

[orangeblueorangeblue]

Originally Posted by 108

Does a triple A rating not mean anything?

They were bundling an selling subprime mortgages with the equivalent rating of a US bond

That's like knowingly selling a lemon

That isn't fraud. Nobody bought these without knowing the risk. This is like buying a lottery ticket and crying "fraud" when you don't win.

No crime, nobody to blame/charge/imprison.

[G8trGr8t]

forget about the bonds and derivatives

laundering billions for drug cartels

http://www.guardian.co.uk/business/2...ney-laundering

HSBC was guilty of a "blatant failure" to implement anti-money laundering controls and wilfully flouted US sanctions, American prosecutors said, as the bank was forced to pay a record $1.9bn (£1.2bn) to settle allegations it allowed terrorists to move money around the financial system.

Hours after the bank's chief executive, Stuart Gulliver, said he was "profoundly sorry" for the failures, assistant attorney general Lanny Breuer told a press conference in New York that Mexican drug traffickers deposited hundreds of thousands of dollars each day in HSBC accounts. At least $881m in drug trafficking money was laundered throughout the bank's accounts.

"HSBC is being held accountable for stunning failures of oversight – and worse," said Breuer, "that led the bank to permit narcotics traffickers and others to launder hundreds of millions of dollars through HSBC subsidiaries and to facilitate hundreds of millions more in transactions with sanctioned countries."

In Mexico the bank "severely understaffed" its compliance department and failed to implement an anti-money laundering programme despite evidence of serious risks. A complex scheme known as the black market peso exchange (BMPE) was used to launder the cash.

sending dollars to Iran

http://www.nytimes.com/2012/08/07/bu...anted=all&_r=0

Using its New York-based operations, a major British bank schemed with the Iranian government for nearly a decade to launder $250 billion, leaving the United States financial system vulnerable to terrorists and corrupt regimes, New York’s top banking regulator charged on Monday.

The New York State Department of Financial Services accused Standard Chartered, which the agency called a “rogue institution,” of masking more than 60,000 transactions for Iranian banks and corporations, motivated by the millions of dollars it reaped in fees.

Senior management at the 150-year-old bank used the New York branch “as a front for prohibited dealings with Iran — dealings that indisputably helped sustain a global threat to peace and stability,” according to a regulatory order sent to the bank. The order requires the bank to explain the apparent violations of law in a hearing later this month and justify why its license to operate in New York shouldn’t be revoked.

these are two crimes that were committed that can be attributed to specific individuals who ahd to approve the transactions.

and many people believe that the banks will be worth more split up, one of them was a former chairman of citibank.

http://www.bloomberg.com/news/2012-0...broken-up.html

Sanford “Sandy” Weill, whose creation of Citigroup Inc. (C) ushered in the era of U.S. banking conglomerates a decade before the financial crisis, said it’s time to break up the largest banks to avoid more bailouts.

“What we should probably do is go and split up investment banking from banking,” Weill, 79, said yesterday in a CNBC interview. “Have banks do something that’s not going to risk the taxpayer dollars, that’s not going to be too big to fail.”
Weill helped engineer the 1998 merger of Travelers Group Inc. and Citicorp, a deal that required repeal of the Depression-era Glass-Steagall law that forced deposit-taking companies backed by government insurance to be separate from investment banks. The New York-based company became the biggest lender in the world before taking a $45 billion taxpayer bailout in 2008 to avoid collapse.

Weill joins regulators, investors, analysts, former bankers and lawmakers in calling for the break-up of too-big-to-fail banks to unlock shareholder value and prevent another financial crisis.

“There is finally a growing recognition among a wide range of market analysts, financial market participants and policy makers that the repeal of Glass-Steagall was a mistake,” said Thomas Hoenig, a Federal Deposit Insurance Corp. board member and former head of the Kansas City Federal Reserve. “It’s time now to restrict banks to core services.”

House Bill

Rep. Brad Miller, a Democrat from North Carolina, has introduced legislation that would cap the size of the biggest banks.

“There are very credible establishment voices now saying we really gain little if anything from the size and complexity of these banks,” Miller said in an interview. He said he doesn’t hold out much hope the Republican-controlled House of Representatives will take up his bill, meaning any breakup would be up to shareholders taking the initiative.

[G8trGr8t]

Originally Posted by orangeblueorangeblue

That isn't fraud. Nobody bought these without knowing the risk. This is like buying a lottery ticket and crying "fraud" when you don't win.

No crime, nobody to blame/charge/imprison.

I can tell you that we were seeking a $350M loan to do a major development in the carribean. We had multiple opportunities to "buy in" to a bundle of good paper to dilute our high risk loan. The people bundling the paper knew the risk of our loan and wanted anywhere between 8 and 12 points up front to bundle it in.

Each bundle of loans could withstand a certain dilution and still get highly rated, the bigger the dilution, the higher the points charged. With the size of our loan, it took a large bundle to withstand that amount of dilution so most of our offers were over 10 points. That was $35M that a bank executive was going to pocket for approving our loan and slipping it into the bundle.

Since my client refused to pay up front fees and wanted payment post closing and added to loan amount, we never closed the deal. The corruption was systemic and a lot of people had their hand out knowing they were committing fraud. The ratings agencies were the worst and failed in their duty to rate the paper properly. The whole system where the bundler hired the rating agency is bassackwards. Like the mob hiring the judge.

[orangeblueorangeblue]

Originally Posted by G8trGr8t

laundering billions for drug cartels

An actual crime!

Now if you can tell me who was specifically responsible for that action ...

Originally Posted by G8trGr8t

I can tell you that we were seeking a $350M loan to do a major development in the carribean. We had multiple opportunities to "buy in" to a bundle of good paper to dilute our high risk loan. The people bundling the paper knew the risk of our loan and wanted anywhere between 8 and 12 points up front to bundle it in.

Each bundle of loans could withstand a certain dilution and still get highly rated, the bigger the dilution, the higher the points charged. With the size of our loan, it took a large bundle to withstand that amount of dilution so most of our offers were over 10 points. That was $35M that a bank executive was going to pocket for approving our loan and slipping it into the bundle.

Since my client refused to pay up front fees and wanted payment post closing and added to loan amount, we never closed the deal. The corruption was systemic and a lot of people had their hand out knowing they were committing fraud. The ratings agencies were the worst and failed in their duty to rate the paper properly. The whole system where the bundler hired the rating agency is bassackwards. Like the mob hiring the judge.

I don't understand the "fraud" here.

[vertigo0923]

Originally Posted by 108

reinstating Glass-Steagall would break them down

yeah. revoke gramm-leach-bliley and replace with glass-steagall. PLEASE.

[Row6]

Originally Posted by orangeblueorangeblue

A. This isn't necessarily fraud. People legally sell junk all the time.

B. Assuming it is fraud - and bear in mind I doubt strongly it is for a number of reasons - who are you going to charge with it? Who did it?

OK, but what you are saying is that the details of any potential case are what matter, not some general principle that we can apply from a distance and assume justice has been done. It is not unimaginable that fraud can be proven in any of the thousands of transactions involving poisoned bonds and that specific individuals can be proven to have knowingly violated the assumed trust between broker and buyer. If it can, then up the ladder is whether by clear directive managers on high can be proven to have known or even encouraged such behavior. IOW, it's like any potential fraud case and not by definition some unique and untouchable situation.

[orangeblueorangeblue]

I never said it was unique nor untouchable and neither did Holder. The size, structure and inherent distribution of blame makes it very difficult to charge a single person with a single crime.

This isn't just in a corporation (although it's specifically structured financially and politically to mitigate liability), but in any enormous structure.

But back to the pitchforks and the cries to jail someone. This is all emotion. Even where there is an actual crime (think the money laundering, not wrecking our economy), it's nearly impossible to charge a single cog in the machine with the full breadth of a crime - and it would be ridiculous to arbitrarily pin the entire thing on one person.

[Row6]

Originally Posted by orangeblueorangeblue

I never said it was unique nor untouchable and neither did Holder. The size, structure and inherent distribution of blame makes it very difficult to charge a single person with a single crime.

This isn't just in a corporation (although it's specifically structured financially and politically to mitigate liability), but in any enormous structure.

But back to the pitchforks and the cries to jail someone. This is all emotion. Even where there is an actual crime (think the money laundering, not wrecking our economy), it's nearly impossible to charge a single cog in the machine with the full breadth of a crime - and it would be ridiculous to arbitrarily pin the entire thing on one person.

We disagree. The randomness of prosecution - except for things like murder, where the full force of the state is usually employed, only a minority of most crimes are ever successfully pursued - is not an excuse for prosecuting no one. It may be tough to bring these cases, but how about trying a little harder before washing your hands. The effect on the nation - and without exaggeration, the world - was pretty damn serious and at least more so than someone writing bad checks or shoplifting. I fail to see how by definition - as you seemed to be saying earlier though not so facetiously, and if not I apologize for misunderstanding you - there can be no crime, and anyway, no one saw them do it.

[orangeblueorangeblue]

Originally Posted by Row6

is not an excuse for prosecuting no one.

Again: for whom and what crime?

If you can't answer that, it absolutely *is* an excuse.

It may be tough to bring these cases, but how about trying a little harder before washing your hands.

Since you're privy to all of the investigatory details, maybe you can tell me where they should look to find more information.

The effect on the nation - and without exaggeration, the world - was pretty damn serious

Does not make it a crime.

I fail to see how by definition - as you seemed to be saying earlier though not so facetiously, and if not I apologize for misunderstanding you - there can be no crime, and anyway, no one saw them do it.

Find this crime in a lawbook for me. Find the crime that says an industry that pivots on betting is culpable when risky bets go wrong and have a cascading effect on a nation's economy and we'll talk. Until then it's just hot air. It's just emotion.

[108]

Originally Posted by orangeblueorangeblue

That isn't fraud. Nobody bought these without knowing the risk. This is like buying a lottery ticket and crying "fraud" when you don't win.

No crime, nobody to blame/charge/imprison.

People knew the usual risk that comes with a Triple A rating

[orangeblueorangeblue]

Originally Posted by 108

People knew the usual risk that comes with a Triple A rating

No, everyone knows the inherent risk in buying and selling volatile investments. The degree of volatility or the expectation therein does not make it fraud.