Tag Archives: accounting control fraud

Goldman Sachs Proof that God hates its Customers

Posted on January 26, 2013 by Devin Smith | 9 comments

The chief executive of Goldman Sachs, which has attracted widespread media attention over the size of its staff bonuses, says he believes banks serve a social purpose and are “doing God’s work.”

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9 Comments

Posted in William K. Black

Tagged accounting control fraud, banksters, crony capitalism, goldman sachs, serial abuses, vampire squid

Goldman Sachs: Doing “God’s Work” by inflicting the Wages of Sin Globally

Posted on January 26, 2013 by Devin Smith | 8 comments

By William K. Black

The central point that I want to stress as a white-collar criminologist and effective financial regulator is that Goldman Sachs is not a singular “rotten apple” in a healthy bushel of banks. Goldman Sachs is the norm for systemically dangerous institutions (SDIs) (the so-called “too big to fail” banks). Impunity from the laws, crony capitalism that degrades democracy, and massive national subsidies produce exceptionally criminogenic environments. Those environments are so perverse that they produce epidemics of “control fraud.” Control fraud occurs when the persons who control a seemingly legitimate entity use it as a “weapon” to defraud. In finance, accounting is the “weapon of choice.” It is important to remember, however, that other forms of control fraud maim and kill thousands.

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8 Comments

Posted in William K. Black

Tagged accounting control fraud, banskters, criminogenic environment, crony capitalism, goldman sachs

The OCC’s Tragic Response to the Frontline expose: The Untouchables

Posted on January 26, 2013 by Devin Smith | 7 comments

By William K. Black

On January 25, 2013, I made this comment on Frontline’s web site discussing its documentary: “The Untouchables” and an accompanying (January 22, 2013) article by Jason Breslow entitled: Were Bankers Jailed In Past Financial Crises?

I addressed two statements in that article. The first statement reads:

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7 Comments

Posted in William K. Black

Tagged accounting control fraud, criminogenic environment, The Untouchables

Why the World Economic Forum and Goldman Sachs are Capitalism’s Worst Enemies

Posted on January 26, 2013 by Devin Smith | 9 comments

By William K. Black

It is fitting that Goldman Sachs is the recipient of this year’s “Public Eye” designation, but it is even more fitting that it is being announced during the World Economic Forum (WEF) at Davos. Goldman Sachs exemplifies the travesty that WEF has created. It is not the worst of the worst. It is representative of the financial world of systemically dangerous institutions (SDIs) that are spreading crony capitalism through the West. The SDIs are the so-called “too big to fail (or prosecute)” banks.

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9 Comments

Posted in William K. Black

Tagged accounting control fraud, banksters, criminogenic environment, crony capitalism, Davos, goldman sachs, WEF, World Economic Forum

Why did Obama and Cameron save a Criminal Enterprise like HSBC?

Posted on December 13, 2012 by Devin Smith | 4 comments

By William K. Black

Why is HSBC still in operation? On the same day (December 10, 2012) that the Obama administration leaked the story of the HSBC settlement a story ran in the New York Times that was full of self-praise by the Obama and Cameron (U.K.) governments for their “cooperative approach” to cracking down on systemically dangerous institutions (SDIs). SDIs are treated as “too big to fail” because they pose a global systemic risk when they fail. The HSBC settlement puts the lie to the Obama/Cameron crack-down on the SDIs for it revealed a disgrace – Obama and Cameron treat the SDIs as too big to prosecute. Indeed, HSBC demonstrates that the SDIs’ senior officers are treated by Obama and Cameron as too elite to prosecute. The propaganda meme of the NYT story – that the SDIs would never again be given special favors due to reforms being adopted by Obama and Cameron – lasted four hours before it was destroyed by the disgraceful reality of the Obama and Cameron governments’ refusal to prosecute HSBC and its officers for their tens of thousands of felonies.

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4 Comments

Posted in William K. Black

Tagged accounting control fraud, banksters, HSBC, too big to fail, too big to prosecute

Ecuador: Bank Spreads, Taxes, Executive Compensation and Growth

Posted on November 26, 2012 by Devin Smith | 5 comments

By William K. Black
(Cross Posted at Benzinga.com)

One of the distinctive features of banking in scores of developing nations is the very large spreads between the rate of interest they pay their depositors and the rate they charge borrowers. Academics have frequently focused on the exceptionally high spreads in Latin America in articles published over the last three decades. Economic theory predicts that these spreads should impose a major drag on development. The high interest rates charged to lenders should lead to very large “hurdle rates” for prospective borrowers’ projects. The two obvious implications of high hurdle rates, sometimes discussed in the literature, are that fewer worthwhile investments will be made by prospective entrepreneurs and more of the loans in Latin America are likely to go to high risk borrowers. High risk investments should be, if financial markets are efficient, more likely to produce higher returns exceeding the hurdle rate. The standard neo-classical economic assumption is that financial markets are efficient.

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5 Comments

Posted in William K. Black

Tagged accounting control fraud, banksters, criminogenic environment, ecuador

The City of London continues to drive the criminogenic regulatory race to the bottom

Posted on October 22, 2012 by Devin Smith | 25 comments

By William K. Black
(Cross posted at Benzinga.com)

Two years ago, I wrote an article entitled “The Bank of England Sows the Seeds of the Next UK Crisis.”

I was not vain enough to believe that the British establishment would listen to my critique. The books authored recently by Jeff Connaughton, Neil Barofsky, and Sheila Bair have made clear that the dominant strategy of the Bush and Obama administrations has been providing aid and comfort to the banksters who drove the crisis rather than holding them accountable for their crimes. The Brits are following the same dominant strategy.

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25 Comments

Posted in William K. Black

Tagged accounting control fraud, bank regulation, banksters, Control Fraud, criminogenic

The Best Way to Rob a Bank is still to Own One: a Postscript

Posted on October 8, 2012 by Devin Smith | 4 comments

By William K. Black

The central questions for a theorist are whether his theory showed strong explanatory power and to what extent it proved useful in diverse settings. A distinguished economist, Dr. Jayati Ghosh, has addressed those questions in an article in which she was explaining to Indian readers that a large fraud, Satyam, was not the product of unique defects in Indian regulation.

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4 Comments

Posted in William K. Black

Tagged accounting control fraud, banksters, Control Fraud, Financial crisis, gresham's dynamic

American weirdness seeks to intervene in Honduras

Posted on October 8, 2012 by Devin Smith | 16 comments

By William K. Black

Michael Strong is an American businessman who is a devotee of the Austrian school of economics. Austrians view democratic governance as so inherently illegitimate that they claim that virtually any governmental program irretrievably consigns us to the “Road to Serfdom.” Strong has decided to save Hondurans from their government. He wants his corporation to buy a Honduran city named Puerto Castilla and turn it into his first global “model city.” The Honduran government holds power through a coup that removed that forced out Manuel Zelaya, the democratically-elected President. The coup occurred during the Obama administration and returned the oligarchs to power. The administration criticized the coup but recognized the (eventual) newly elected President Profirio Lobo. The constitutional chamber of Honduras’ Supreme Court (which provided a fig leaf of respectability for the coup) rule 4-to-1 that it was unconstitutional to create privately run cities. (The decision is expected to be appealed to the full Supreme Court.)

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16 Comments

Posted in William K. Black

Tagged accounting control fraud, Control Fraud, libertarian, privately run cities

JPMorgan targeted for role in financial crisis

Posted on October 3, 2012 by Devin Smith | 4 comments

JPMorgan Chase & Co. has become the first target of the task force that the Justice Department created this year to hold big Wall Street banks accountable for their role in the financial crisis. NEP’s William Black provides input regarding these first steps taken by regulators to prosecute in an article at the LA Times. You can read the LA Times article here.

The Globe and Mail has also published an article on the prosecution of JPMorgan Chase & Co with input from William Black. You can read the Globe and Mail article here.