UBS Fined $1.5 Billion, Pleads Guilty to Fraud Charge in Libor Case

By: Wednesday December 19, 2012 2:40 pm

The Financial Times points out today that Tim Geithner, while heading the NY Fed, knew all about the Libor fraud at the major banks, and that traders were manipulating the rate purely to make money for themselves on various deals. This is a stronger charge than the idea that banks manipulated the rate for reasons of financial health, and Geithner knew it was happening. But he did nothing. As per usual.

 

Mortgage Backed Securities Lawsuits Still Proliferate

By: Tuesday December 18, 2012 2:01 pm

While we wait for more settlements in the Libor case, banks continue to face exposure for their fraudulent mortgage conduct dating back to the housing bubble. Two more major lawsuits emerged yesterday.

Republicans and Democrats Speak Out Against “Too Big to Jail” HSBC Case

By: Monday December 17, 2012 9:05 am

Where is Patrick Leahy on this? He has made no public statement on the HSBC case, despite being the co-author of the Fraud Enforcement and Recovery Act, which was supposed to deliver funds toward prosecuting fraudulent big bank activity (it never actually did). Grassley, a co-author, has spoken out. Why not Leahy?

Felix Salmon’s Unpersuasive Argument to Hold HSBC and Its Executives Harmless

By: Friday December 14, 2012 9:25 am

You don’t have to be a big fan of the drug war to suggest that extending a helping hand to murderous gangs is probably not activity an allegedly reputable bank should be involved in.

First Libor Arrests Net Three Former Low-Level Traders

By: Wednesday December 12, 2012 12:05 pm

Maybe at some point, banks will face prosecution or at least fines in the Libor case. Everyone expects UBS, the Royal Bank of Scotland and several others to face some sort of sanction. But we’ve been hearing about imminent charges for months now, with nothing to show for it. Banks have individually terminated people they claim are responsible for the rate-rigging, but that internal discipline has been the only kind on offer.

Justice: Wells Fargo Still Liable for FHA Abuse, Despite Foreclosure Fraud Settlement

By: Monday December 3, 2012 2:52 pm

Late last week, the Justice Department issued a filing that attempts to reinforce the release limitations set by the foreclosure fraud settlement, stopping Wells Fargo from reimagining the deal as a broader release of liability on various mortgage claims. However, a judge will have to make the final decision.

The US sued Wells Fargo in late October over issuing insurance claims on FHA loans while knowing that the loans did not meet underwriting requirements set by the agency. Wells charged in court that these specific charges were covered under the foreclosure fraud settlement. I actually thought Wells made a fairly compelling case on that front, but the DoJ disagrees.

Morgan Stanley Trader Investigated for Manipulation

By: Monday December 3, 2012 11:02 am

Maybe Glenn Hadden getting banned from trading will somehow create the long-absent deterrent for financial fraud. But actually putting him in jail would go a bit further.

With Unclear Successor at SEC, a Look at the Agency’s Recent Failures

By: Thursday November 29, 2012 10:56 am

Mary Miller, a Treasury Department official seen as the expected pick for the next head of the SEC, dropped out of contention yesterday, leaving an unclear path forward. Elisse Walter, who was designated as the new chair, replacing the departing Mary Schapiro, is seen as a stopgap pick. But her elevation to the top slot means that the SEC is one member down on its commission, with a 2-2 split between Democrats and Republicans. This will likely stall out almost all its important initiatives in the coming months until a new commissioner gets nominated and confirmed, and unless the Administration wants to give credence to the theory that they want to tie the bureaucratic hands of a key financial regulator, they need to nominate someone soon.

Speculation has focused not on a career prosecutor or someone with a record of tough oversight of the financial industry, but Sallie Krawcheck, “a longtime Wall Street executive” from Bank of America, and Robert Khuzami, the current head of enforcement.

On Economy, Justice, Obama Housing Plan Fell Well Short

By: Monday November 26, 2012 11:15 am

Geithner’s protestations about employing the “best feasible solutions” are really disingenuous. Unless by “feasible” he means the “solutions which hold banks the most harmless.” The truth is that Geithner wanted to protect banks and their bondholders at all costs, and that didn’t match with delivering debt relief to borrowers. Period.

Mary Schapiro Steps Down as SEC Chief

By: Monday November 26, 2012 10:26 am

Schapiro’s replacement matters. Simon Johnson kicked this off a few days ago, juxtaposing the bona fides of Treasury Department under secretary for domestic finance Mary Miller (a former mutual fund executive) against former Special Inspector General for TARP Neil Barofsky. There’s no question than an experienced prosecutor like Barofsky would change the SEC’s culture, but there’s almost no chance he will ever hold another job in Washington, as he was specifically told by Herb Allison right at the beginning of his book Bailout.

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