Relevant and even prescient commentary on news, politics and the economy.

Finally, prosecutions…

From Huffington Post comes this example of prosecutions of fraud and malfeasance (well, tongue in cheek if the pain was less, but 22 trillion IS a lot of money):

The bank fired Richard Eggers from his job of seven years as a customer service representative after the company found out about a decades-old run-in with the law, the Des Moines Register reports. In 1963 Eggers got caught putting a cardboard cut-out of a dime in a washing machine at a laundromat.

Eggers’ firing is one of thousands now occurring due to stricter guidelines on bank and mortgage lender employees that went into effect last year. The new rules are meant to gut the institutions of workers convicted of various types of fraud, but the casualties have largely been low-level workers like Eggers, according to ABC5 News.

“We don’t have discretion to grant exceptions in situations like this,” Angela Kaipust, a spokeswoman for Wells Fargo told the television station. “Once we find out someone has a criminal history of dishonesty or breach of trust we can no longer employ them.”
In a similar case, Wells Fargo fired Yolanda Quesada in May after a background check turned over a shoplifting charge from 1972.

Also see:

Seven and one half things  Some more commentary

GAO report on financial crisis costs   22 trillion?

Tags: , Comments (8) | |

But then again…

I can’t help but compare Yves Smith’s appraisal of SEC performance and either party’s political attitude to the previous post by Peter Henning:

If you merely looked at the SEC’s record on enforcement, you’d conclude that it suffered from a Keystone Kops-like inability to get out of its own way. The question remains whether that outcome is the result of unmotivated leadership (ex in the safe realm of insider trading cases) and long-term budget starvation leading to serious skills atrophy, or whether the SEC really, truly, is so deeply intellectually captured by the financial services industry that it thinks industry members don’t engage in fraud, they only make “mistakes”?

It’s sure looking like the latter. We’ve railed repeatedly on the refusal of the SEC to use an obvious tool, Sarbanes Oxley, to pursue not only the massive failings of these firms to install adequate risk controls during the crisis, but also to go after obvious recent cases, namely, the JP Morgan CIO losses and the MF Global collapse.

Further confirmation comes today in the form of investor abuse and repudiation of Dodd Frank requirements that the SEC hopes to slip next week when hopefully no one will notice.

Tags: , , Comments (1) | |

Populist rehetoric for the election campaign

Via The Dailey Beast is a link to Lehman Brother’s e-mails and documents and an unanswered question for investors and the public

With the Occupy protesters resuming battle stations, and Mitt Romney in place as the presumptive Republican nominee, President Obama has begun to fashion his campaign as a crusade for the 99 percent–a fight against, as one Obama ad puts it, “a guy who had a Swiss bank account.”


Casting Romney as a plutocrat will be easy enough. But the president’s claim as avenging populist may prove trickier, given his own deeply complicated, even conflicted, relationship with Big Finance.

“There hasn’t been any serious investigation of any of the large financial entities by the Justice Department, which includes the FBI,” says William Black, an associate professor of economics and law at the University of Missouri, Kansas City, who, as a government regulator in the 1980s, helped clean up the S&L mess. Black, who is a Democrat, notes that the feds dealt with the S&L crisis with harsh justice, bringing more than a thousand prosecutions, and securing a 90 percent conviction rate. The difference between the government’s response to the two crises, Black says, is a matter of will, and priorities. “You need heads on the pike,” he says. “The first President Bush’s orders were to get the most prominent, nastiest frauds, and put their heads on pikes as a demonstration that there’s a new sheriff in town.”

Tags: , , Comments (8) | |