Wall Street's Massive Rap Sheet

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Wall Street's Massive Rap Sheet

Post  ExoticWhiteMan on Mon Nov 24, 2008 12:56 pm

http://www.marketwatch.com/news/story/Citi-soars-after-US-steps/story.aspx?guid={15A026EC-CEA0-4C82-92EC-199B794F0968}#comments

I've been reading MW comments for awhile, but this one is the most extensive and offers the most blatant proof of banks being run by a bunch of greedy bastards. The article is a sign that the government is starting to take people's demands seriously, and actually regulate how taxpayer money is handed out. This one comment, though, shows big banking for what it is: an atrociously immoral scam operation. These corporations were fined, but most of the fines were a drop in the bucket for them, small enough to be brushed aside as operating costs. The executives of these banks weren't punished and still walk free to enjoy their lavish bounty. The amount of corruption and robbery warrants jailing these people, but what does the government do? They REWARD them! With trillions of dollars in loans and a massive bailout!

Ranting aside, here is the comment, with a long list of crimes committed by familiar names:


CommonMan 13 hours ago

+51 Votes (52 Up / 1 Dn)

So the lesson is to always build a company that threatens to take the economy down with it if it fails. If you do so, you can take enormous risks, make enough money to retire for a lifetime in a year or two and leave the taxpayers to foot the bill. Nice job if you can get it.

We should all be training our sons and daughters to be money-pushers I guess is the moral of the story.

Is there no shame in the financial industry? There certainly is no prison for all the fraud committed by them. Who are the type of people we are bailing out? Here is a partial list of atrocities from these companies.

* On April 28, 2003, every major US investment bank, including Merrill Lynch, Goldman Sachs, Morgan Stanley, Citigroup, Credit Suisse First Boston, Lehman Brothers Holdings, J.P. Morgan Chase, UBS Warburg, and U.S. Bancorp Piper Jaffray, were found to have aided and abetted efforts to defraud investors. The firms were fined a total of $1.4 billion by the SEC, triggering the creation of a Global Research Analyst Settlement Fund.

* In May, 2003, the SEC disclosed that several “brokerage firms paid rivals that agreed to publish positive reports on companies whose shares..they issued to the public. This practice made it appear that a throng of believers were recommending these companies' shares.” This was false. “From 1999 through 2001, for example, one firm paid about $2.7 million to approximately 25 other investment banks for these so-called research guarantees, regulators said. Nevertheless, the same firm boasted in its annual report to shareholders that it had come through investigations of analyst conflicts of interest with its ‘reputation for integrity’ maintained.”

* On September 4, 2003, a major investment bank, Goldman Sachs, admitted that it had violated anti-fraud laws. Specifically, the firm misused material, nonpublic information that the US Treasury would suspend issuance of the 30-year bond. The firm agreed to “pay over $9.3 million in penalties.” On April 28, 2003, the same firm was found to have “issued research reports that were not based on principles of fair dealing and good faith .. contained exaggerated or unwarranted claims.. and/or contained opinions for which there were no reasonable bases.” The firm was fined $110 million dollars, for a total of $119.3 million dollars in fines in six months.

* On November 4, 2004, the Securities and Exchange Commission “filed a settled civil action in the United States District Court for the District of Columbia against Wachovia Corporation (Wachovia) for violations of proxy disclosure and other reporting requirements in connection with the 2001 merger between First Union Corporation (First Union) and Old Wachovia Corporation (Old Wachovia). Under the settlement, Wachovia must pay a $37 million penalty and is to be enjoined from future violations of the federal securities laws.”

* On November 30, 2004, the Securities and Exchange Commission announced “the filing..of charges against American International Group, Inc. (AIG) arising out of AIG’s offer and sale of an earnings management product.” The company “agreed to pay a total of $126 million, consisting of a penalty of $80 million, and disgorgement and prejudgment interest of $46 million.”

* On January 25, 2005, “the Securities and Exchange Commission announced the filing in federal district court of separate settled civil injunctive actions against Morgan Stanley & Co. Incorporated (Morgan Stanley) and Goldman, Sachs & Co. (Goldman Sachs) relating to the firms' allocations of stock to institutional customers in initial public offerings (IPOs) underwritten by the firms during 1999 and 2000.”

* On March 23, 2005, the Securities and Exchange Commission (Commission) “announced that it instituted and simultaneously settled an enforcement action against Citigroup Global Markets, Inc. (CGMI) for failing to provide customers with important information relating to their purchases of mutual fund shares.”

* On April 12, 2005, the Securities and Exchange Commission “instituted and simultaneously settled an enforcement action against the New York Stock Exchange, Inc., finding that the NYSE, over the course of nearly four years, failed to police specialists, who engaged in widespread and unlawful proprietary trading on the floor of the NYSE.” As part of the settlement, the “NYSE agreed to an undertaking of $20 million to fund regulatory audits of the NYSE's regulatory program every two years through the year 2011.” On that same date, the Commission “instituted administrative and cease-and-desist proceedings against 20 former New York Stock Exchange specialists for fraudulent and other improper trading practices.”

* On May 31, 2005, the Securities and Exchange Commission “announced settled fraud charges against two subsidiaries of Citigroup, Inc. relating to the creation and operation of an affiliated transfer agent that has served the Smith Barney family of mutual funds since 1999. Under the settlement, the respondents are ordered to pay $208 million in disgorgement and penalties and to comply with substantial remedial measures, including an undertaking to put out for competitive bidding certain contracts for transfer agency services for the mutual funds.”

* On February 2, 2006, the Securities and Exchange Commission “announced that it filed an enforcement action against five former senior executives of General Re Corporation (Gen Re) and American International Group, Inc. (AIG) for helping AIG mislead investors through the use of fraudulent reinsurance transactions.”

* On February 9, 2006, the Commission announced “the filing and settlement of charges that American International Group, Inc. (AIG) committed securities fraud. The settlement is part of a global resolution of federal and state actions under which AIG will pay in excess of $1.6 billion to resolve claims related to improper accounting, bid rigging and practices involving workers’ compensation funds.”

* On March 16, 2006, the Securities and Exchange Commission “announced a settled enforcement action against Bear, Stearns & Co., Inc. (BS&Co.) and Bear, Stearns Securities Corp. (BSSC) (collectively, Bear Stearns), charging Bear Stearns with securities fraud for facilitating unlawful late trading and deceptive market timing of mutual funds by its customers and customers of its introducing brokers. The Commission issued an Order finding that from 1999 through September 2003, Bear Stearns provided technology, advice and deceptive devices that enabled its market timing customers and introducing brokers to late trade and to evade detection by mutual funds. Pursuant to the Order, Bear Stearns will pay $250 million, consisting of $160 million in disgorgement and a $90 million penalty.”

* On April 11, 2006, the Securities and Exchange Commission announced “charges against individuals involved in widespread and brazen international schemes of serial insider trading that yielded at least $6.7 million of illicit gains. The schemes were orchestrated by..a research analyst in the Fixed Income division of Goldman Sachs, and a former employee of Goldman Sachs.”

* Sept 10, 2008, Lehman Brothers Holdings Inc. and Merrill Lynch & Co. are among Wall Street firms that concocted derivatives and stock-loan deals to help offshore hedge funds dodge hundreds of millions of dollars in U.S. taxes, according to a U.S. Senate committee investigation. Ongoing investigation.

* June 24, 1999, Lehman Brothers, one of the nation's largest investment banks, was censured and fined $100,000 as part of a settlement of regulatory charges that included an accusation that it failed to comply with market rules intended to insure that public investors get a fair share of hot initial public offerings. In addition to the offering problems, regulators also cited the firm for violations of rules governing short sales -- which are sales of borrowed stock by investors who hope to profit on a subsequent decline in the price -- and on disclosure of sales charges to mutual fund purchasers.

* 23 May 2006 Lehman Brothers was fined $400,000 by NYSE Regulation for submitting inaccurate monthly reports on the company's short-interest positions. Lehman misreported its short-interest position in a number of stocks for more than three years, according to the regulator.

* October 7 2007, NYSE Regulation fined 14 of its member firms a total of $10.4 million in fines for failing to deliver trade confirmations to their clients and other violations. Citigroup Global Markets received the heaviest fine of $2.25 million for failing to deliver trade confirmation documents in more than a million consumer transactions. Lehman Brothers and DeutscheBank were each fined $1.25 million.

* November 2, 2005 Lehman Brothers Inc. of New York was fined $500,000 and censured by the New York Stock Exchange for failing to supervise a profitable trading strategy that potentially harmed its customers. On Dec. 11, 2002, Lehman Brothers effected transactions for the sale of more than 2 million shares of the stock of Quest Diagnostics Inc. of Lyndhurst, N.J., that were disruptive and caused the stock's price to fall excessively, the NYSE said in a release this morning.
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