Despite Finding Big Problems in Mortgage Industry, Regulators’ Punishment Unclear
Federal regulators say they're going to crack down after finding "critical deficiencies [1]" with how banks and mortgage servicers have been handling struggling homeowners. But it's an open question just what form a punishment will take, with one regulator reportedly pushing lighter penalties than the others.
Both The Wall Street Journal [3] and Huffington Post [4] reported this morning that the OCC wants to go easier on the banks than other regulators, specifically the FDIC. The OCC has proposed "relatively modest fines," reports the Journal.
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It was the OCC that dubya used to block 19 states' attempts to stop predatory mortgage lending, including New York's Spitzer, at the height of Greenspan's irrationally exuberant housing bubble.
Then Wall St, esp AIG's Spitzer-outed Hank Greenberg, with dubya's DoJ complicity, took Spitzer down.
The "Citizen's United" case decision from SCOTUS pretty much solidified the premise that any idiot politician who would dare to try to actually regulate the financial sector in any meaningful way (where meaningful way = accountability for risks taken) would be outspent in his/her next campaign in favor of one who understood his/her proper role vis-a-vis the oligarchs.
The 2012 Prez election will approach $3B.
Obama declining public campaign funding foreshadowed this too, but it's true enough to say Citizens United turned the lobbying/campaign money of corporations and trade unions into enforceable free speech rights and quasi-citizenship, with momentous implications for the role of money in the electoral process.
SEC Prosecutor Says SEC Top Brass Are Corrupt
Prosecutor calls out ins utional corruption.
Bloomberg News reported, on April 8, that a Securities and Exchange Commission prosecuting attorney, James Kidney, said at his recent retirement party on March 27, that his prosecutions of Goldman Sachs and other mega-banks had been squelched by top people at the agency, because they "were more focused on getting high-paying jobs after their government service than on bringing difficult cases." He suggested that SEC officials knew that Wall Street would likely hire them after the SEC at much bigger pay than their government remuneration was, so long as the SEC wouldn't prosecute those megabank executives on any criminal charges for helping to cause the mortgage-backed securities scams and resulting 2008 economic crash.
His "remarks drew applause from the crowd of about 70 people," according to the Bloomberg report. This would indicate that other SEC prosecutors feel similarly squelched by their bosses.
Kidney's speech said that his superiors did not "believe in afflicting the comfortable and powerful."
Referring to the agency's public-relations tactic of defending its prosecution-record by use of what he considered to be misleading statistics, Kidney said, "It's a cancer" at the SEC.
Two recent studies have provided additional depth to Kidney's assertions, by showing that Obama and his Administration had lied when they promised to prosecute Wall Street executives who had cheated outside investors, and deceived homebuyers, when creating and selling mortgage-backed securities for sale to investors throughout the world.
President Obama personally led in this lying.
However, two years later, the Inspector General of the U.S. Department of Justice issued on March 13, 2014 its "Audit of the Department of Justice's Efforts to Address Mortgage Fraud," and reported that Obama's promises to prosecute turned out to be just a lie. DOJ didn't even try; and they lied even about their efforts. The IG found: "DOJ did not uniformly ensure that mortgage fraud was prioritized at a level commensurate with its public statements. For example, the Federal Bureau of Investigation (FBI) Criminal Investigative Division ranked mortgage fraud as the lowest criminal threat in its lowest crime category. Additionally, we found mortgage fraud to be a low priority, or not [even] listed as a priority, for the FBI Field Offices we visited." Not just that, but, "Many Assistant United States Attorneys (AUSA) informed us about underreporting and misclassification of mortgage fraud cases." This was important because, "Capturing such information would allow DOJ to ... better evaluate its performance in targeting high-profile offenders."
Privately, Obama had told Wall Street executives that he would protect them. On March 27, 2009, Obama assembled the top executives of the bailed-out financial firms in a secret meeting at the White House and he assured them that he would cover their backs; he promised "My administration is the only thing between you and the pitchforks". It's not on the White House website; it was leaked out, which is one of the reasons Obama hates leakers. What the DOJ's IG indicated was, in effect, that Obama had kept his secret promise to them.
http://www.alternet.org/news-amp-pol...ss-are-corrupt
How did Wall St repay Obama? they gave to Bishop Gecko 10x what they gave to Obama.
Evergreen
GE slapped on the wrist:
https://thedig.substack.com/p/a-tale...cement-actionsWhen the Luckin Coffee enforcement action was announced a week after GE’s, on December 16, 2020, I tweeted this:
A lot of people liked that take, but one well-known short-seller disagreed and we debated a bit on Twitter. Then he wrote a blog post with this conclusion:
I hope you will stay tuned for more pontificating. Try not to cry if it reminds you of how unfair it all is.The Luckin case was criminal - and all it got was a fine. That was because the malefactors were in China.
GE was probably not even fraud - and they got a fine.
That is because they were American. Nothing more.
Yeah, it is not fair.
But that is the world we are in.
Francine McKenna pontificating just exaggerates that unfairness. But whatever.
One company was charged because it “materially misled investors about how it was generating reported earnings and cash growth as well as its latent risks…violating the antifraud, reporting, disclosure controls, and accounting controls provisions of the securities laws.”
The other company was charged with “defrauding investors by materially misstating the company’s revenue, expenses, and net operating loss in an effort to falsely appear to achieve rapid growth and increased profitability and to meet the company’s earnings estimates…violating the antifraud, reporting, books and records, and internal control provisions of the federal securities laws.”
Can you clearly discern which company is which?
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