You know who will miss this Unit when the government shuts down?

The banksters, that’s who.
Nowhere else can they can get such sweetheart deals.

Negligence is an inadvertent failure to meet some duty or obligation owed to another. It assumes a lack of intent or knowledge.

Wachovia was responsible for knowing the law that applied to a business it intentionally engaged in, including the requirement that it disclose “unreasonable mark-ups”. It had a duty to develop and use procedures that would ensure it complied with such laws.

If Wachovia “knew” about the unreasonable mark-ups, but did not disclose them to these customers, then it either acted recklessly or with intent. Neither of those is negligent conduct.

Reckless disregard is bad enough; it assumes a willful failure to inform itself, or a willful failure to have or police procedures that would ensure it complied with its obligations to its customers and, therefore, its shareholders. Reckless disregard usually attracts stronger penalties than negligence: meaningful fines, fines that would deter such conduct in future, plus restitution to the customer.

Intentional, willful, knowing misconduct is more egregious. It attracts punitive damages or criminal liability or both, in addition to the costs of restitution. Mere fines beyond the cost of restitution are fundamentally inadequate to deter intentional conduct. Individual actors need to be removed from the business, by firing or prison.

I’m quite sure the bank’s lawyers knew those distinctions. I’m pretty sure even Obama’s SEC – gutted by Bush and intentionally not much renovated by Obama – knew about them too. Which makes this sort of judgment curious. It’s almost as if the SEC were being reckless with the law, if not flagrantly and knowingly misapplying it for favored violators.

Yep once again nothing to see just more business as usual.

That’s a nice description of the legal issues.

It is clear that this was intentional. Specific human beings did this, and they knew exactly what they were doing. They did it as part of their efforts to save Wachovia. In the Longshore 3 matter, it is clear that some human beings deliberately didn’t carry out their duties. There is no evidence that there was any investigation to see whether it happened in other cases.

Why anyone would do business with these people is a mystery to me.

Thank you for reporting on this, masaccio.

I learned about Wach-over-us the hard way back in the market crash of the late 1980s.
What gall to go around gouging tribal governments. And one can surely drive a wagon train through the gap in Wells Fargo(ne)’s credibility and integrity. Same for the (in)Securities (of) Exchange Commission who’s riding shot gun for them.

So that settlement order, by not naming names, provides no assurance that the next Wells Fargo deal won’t be handled by the same people whose “negligence” cost the bank several million dollars – and amounted to fraud on customers, who had to spend considerable sums to obtain restitution.

How exactly does that give a boost to the confidence fairy that’s supposed to carry us from this Depression to the sunlit uplands of recovery? Is the SEC clapping its hands or ringing a bell for Clarence, or is the gong I hear the tolling of the Nine Tailors for another lost facet of the rule of law?

The only ray of sunshine that I can report about this is that at the Balloon Fiesta this past October in Albuquerque, Wells Fargo couldn’t get it up.

That’s right, their huge stagecoach, all full of hot air, just lay on the ground swollen.

Oh, where are my manners?

masaccio

Was it panting, too? LOL

I think fines are tax deductible as well.

It is interesting what experiences a person can remember when masaccio informs us of further evidence of the dirty dealings of our financial sector.

Punitive damages would not be deductible. I imagine that’s why they weren’t imposed. It would set such a daring precedent.

I didn’t know Wells Fargo’s corporate color was blue.

Speaking of Wells Fargo, I moved my investment account from them today. It wasn’t because of their egregious violations of security and banking law, they were robbing me blind. They made the huge mistake of sending me the evaluation of my investments, and I actually took the time to read it. They are taxing me at a higher rate than the government. I don’t begrudge the fees for my financial advisor, who is fantastic, and one of the 50 best in America — but the nickle-and-diming on every withdrawal we make just drives me crazy. It’s a monopoly. I’m out of there as of this morning.

Thanx for your report masaccio.
Too big to regulate becomes too big to fail becomes too big to regulate ad infinitum. Government can’t pay enough to keep SEC regulators around long enough to see what’s going on and before they get offered a better salary inside the banks or as a lobbyist.
Whoever controls the information controls the boundaries of what can and can’t be done. Lawyers figure out what is permissible, analysts figure out what can be worked around, PR firms explain how it can be sold and also provide scripts for damage control if the lid comes off and lobbyists are paid to make the ‘laws’ more flexible.
PR firms have dozens of names for organizations to be used that they can pull up as ‘independent analysts’ for tv and radio if this month’s ‘sound policy’ wonk gets called out for being tainted by more known lobbying groups and everyone says, “Oh, is that all?’ and go back to some other tragedy due to negligence.
Winner circle gets harder to enter. Oligarchs win. again.

In the early 80s, I worked for a group of doctors who invested half of their pension and profit sharing plans in a trust with a major bank.

When the annual report came out, it was enormous, hundreds of pages. However there was an exact listing of all of the assets at the end of the year.

I took that section and matched it with prices reported in the Wall Street Journal on the last day of the year and the first trading day of the new year.

The assets were over valued by over 100 percent.

When I contacted the bank, they pointed out a note in tiny letters in a previous report that said they would now value the assets on the purchase price.

I took a lawyer and an accountant to a meeting with the heads of the trust department. All the lawyer and CPA were to do was to answer “yes” if I asked them a question. No elaboration, no longer comments. Strictly “yes.”

I went through the relevant law in the state in regard to financial reporting and accounting assumptions. I pointed out that the trust violated every single one of those laws. I asked the lawyer, he said, “yes.” I asked the CPA, he said, “yes.”

I gave the bank a choice. They could pay the full reported value on the reports to my doctors with interest at prime plus 2 percent or they could have a class action lawsuit on their hands within a week. I asked the lawyer if he could draw up the action the next day, he said, “yes.”

They paid the end of the year balance reported but not the interest. I called and said that the action had been drawn up and that if I did not have a cashiers check in hand within two days, there would be a class action lawsuit.

They paid.

They screwed everyone else in the trust, but I got my people’s money out.

Blackmail? Sure.

I had a very expensive tax lawyer check out that my actions were legal. Immoral, unethical and several other things, but legal.

I think that he contacted all of his clients and told them to get out of the trust and how.