Tag Archives: banksters

Andrew Ross Sorkin Unmasks as Leading Occupy Wall Street’s (Three Star Restaurants)

By William K. Black

Andrew Ross Sorkin (ARS), long believed to be the sycophants’ sycophant who composes his odes to elite bank CEOs from his perch at the New York Times and CNBC has unmasked himself in a video entitled “Two Myths and One Reality.”

“If there’s one question that I get just about more than any other, ‘So why didn’t anybody go to jail, and did nobody try?’ And there’s an answer to that too.

A lot of people had an incentive to try to find a way to bring not justice, but to put people away.  Prosecutors, law enforcement, journalists; it would have been a better story.  But for the last five years we’ve tried, all of us have tried, to find that criminal element.”

ARS revealed in his video that he has posed as the modern-day leader of the League of the Scarlet Pimpernel, the undercover group of English aristocrats, led by an English baronet (“one to command, and nineteen to obey”) who saved French aristocrats from the Great Terror.  The twist is that ARS’ League is composed of financial journalists who pose as sycophants and that the modern-day French aristocrats are the elite bankers whose misconduct caused the Great Recession.  The purpose of ARS’ deception was to lure the elite bankers into admitting their misconduct so that they could be held accountable rather than aiding French aristocrats’ efforts to escape accountability.  ARS was the anti-Scarlet Pimpernel, the aristocrat posing as the friend of the aristocrats in order to “find that criminal element.”

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Why do Conservatives Oppose Prosecuting Elite Corporate Frauds?

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

There are at least four principles that virtually all conservatives purport to support – except when the potential defendant is socially elite.  I have written previously about two of these principles on several occasions – the need for accountability and “broken windows” theory that calls for the prosecutors to make the prosecution of even minor street crimes a high priority if they have, even indirectly, a material effect on the community.

The third principle is that it is vital to punish in order to deter crime.  Gary Becker, the very conservative Nobel laureate in economics, emphasized this point (again, in the context of street crime).  Under Becker’s theory of crime our current practices of allowing elite banksters to become wealthy through leading the “sure thing” of accounting control fraud with immunity from the criminal laws will predictably lead to new, larger epidemics of fraud that will continue to cause our recurrent, intensifying financial crises.  It is rare, however, to find a prominent conservative who is demanding a priority effort to prosecute the elite bank officers who ran those frauds.  I know of no conservative member of Congress publicly making that demand today.  Senator Chuck Grassley has previously criticized the Obama administration’s failure to prosecute elite bankers.

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Not with a Bang but a Whimper – the SEC Enforcement Team’s Propaganda Campaign

By William K. Black

The New York Times has one of those “inside” stories that unintentionally demonstrate the collapse of justice and financial reporting.  This genre involves the media reporting gravely (and uncritically) the administration’s claims that its failure to prosecute any elite for the largest and most destructive financial frauds in history actually demonstrates the exceptional ethical rectitude of the non-prosecutors and non-enforcers.  Journalists, unlike alchemists, can transmute dross into gold.  In the NYT’s account a pathetic failure of competence, integrity, and courage at the SEC is reimagined as a fantastic triumph of vigor and ethics on the part of the SEC enforcement attorney who refused to seek to hold Lehman’s senior officers accountable for their violations but otherwise became the scourge of elite frauds.  In the end, he is promoted for his dedication to “justice” and is now the anti-enforcement leader of the SEC’s enforcement group.

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Creating Effective Regulation is the Imperative Issue at the Federal Reserve

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

The only positive aspect of the public contest to pick a successor for Ben Bernanke that the White House has inexplicably sparked is that economists are acknowledging that the next head of the Fed must act to create (not “restore”) effective regulation by the agency.  It is long past time to have a serious discussion about the collapse of regulation by the Fed.  In this column I make the first of what will become four points.  First, the consequences of the Fed’s regulatory collapse have proven catastrophic for our Nation.  Second, the Fed’s supervisory structure inherently creates a conflict of interest identical to the one that existed in the Savings and Loan (S&L) debacle until Congress and the President decided the conflict was intolerable and eliminated it in 1989.  Third, the supervisory culture of the Fed ensures recurrent supervisory failure – and the Fed’s economists are largely responsible for these failures.  Fourth, the Fed’s economists’ dogmas and ignorance of fraud mechanisms have combined to create to create intensely criminogenic environments.  The Fed does not simply fail to prevent the epidemics  of control fraud that cause our recurrent, intensifying financial crises – its policies are so perverse that they aid the fraud epidemics.

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The New York Times is Wowed that Obama’s Six Rubinites Support Larry Summers

By William K. Black

The Obama administration, for reasons that pass all understanding, has been running a campaign of leaks disparaging one of Obama’s few senior female appointees, Janet Yellen.  Her high crimes include not being a protégée Bob Rubin and doing exceptionally well in economic forecasting.  Rubin wants the job of Fed Chair to go to his top protégée, Larry Summers.  Yellen, as Vice Chair of the Fed stands in the way of Rubin’s ambitions.  (Rubin is too toxic to take the Chair directly.)  The administration has been leaking primarily to the New York TimesBinyamin ApplebaumHis latest article contains this remarkable statement, without analysis.

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Larry Summers’ Take on Efficient Markets and Regulators: Brilliance v. Idiots

By William K. Black
(cross posted from Benzinga.com)

Perhaps the only useful thing to come out of the Obama administration’s inept contest between Larry Summers and Janet Yellen as Ben Bernanke’s successor is the purported agreement among economists and other policy makers that the Fed Chair should make the introduction of effective regulation and supervision by the Federal Reserve a top priority.  It would be even better if this agreement were real and would be sustained.  Regulation and supervision have never risen above tertiary concerns at the Fed and every institutional pressure will push the new Fed Chair to ignore supervision.  

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Assad Reveals He’s a Bank CEO: Obama Ends Threats, Bails Out Syria & Grants Immunity

By William K. Black

I do not think the twin epidemics of mortgage loan origination fraud (appraisal and “liar’s” loans) and the various epidemics of post-origination fraud by financial institutions are comparable crimes to the use of chemical weapons.  The President’s job, however, is to deter a wide range of criminal conduct.  The elite fraud epidemics cost over $11 trillion in losses to households alone and 10 million American jobs.  The cost of these fraud epidemics is so vast that deterring future epidemics should be a high priority of every administration.  The refusal of the Obama and Bush administrations to prosecute any elite banker whose actions contributed to the crisis has done the opposite of deterring future fraud epidemics – it has encouraged them.

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Zero Prosecutions of Elite Banksters is too many Prosecutions for the Wall Street Journal

By William K. Black

Unintentional self-parody was the result to a coordinated effort by the systemically dangerous institutions’ (SDIs) press flacks to gin up outrage that the Department of Justice (DOJ) would have the audacity to sue the SDIs’ for their manifold violations of the law.  The Wall Street Journal recalled one of its former opinion page pundits to active duty as a shill for the Street.   George Melloan’s August 25 column warned:

“If dubious prosecutions continue to mount, they could backfire on the regulatory agencies and further diminish sinking public confidence in government. Ask the folks at the IRS.”

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Mueller: I Crippled FBI Effort v. White-Collar Crime, My Successor Will Make it Worse

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

FBI Director Robert Mueller is taking his victory lap as he steps down after 12 years of service.  I have done three articles in a series that explains how the Mortgage Bankers Association (MBA) conned the FBI into adopting the Tea Party’s mythology about the causes of the crisis – virginal banks beset by ultra-sophisticated fraudulent hairdressers.  The MBA created a faux definition of mortgage fraud under which the bank and its senior officers were always the victims instead of the perpetrators.

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NEP’s William Black appears on HuffPost Live

The legal culture of big-time settlements can short-circuit the law, protecting wrongdoers from punishment, trial or even an admission of guilt. That’s just what the government has done for the major banks implicated in sweeping mortgage fraud. Is it too late to rectify the big banks role in the housing and financial crisis? Bill and other panelists speak with Alyona Minkovski on this subject.