SHOCKING DEALS BEHIND BANKSTER FINES = REAL REASON NO PRISON TIME
Banks settle charges for violating rules, regulations, and laws but they NEVER reveal how much money is really being paid or where it’s going…or the kinds of settlements reached = Tax deductible fines + “Credits” for fines they never pay…or how insurance covers some of it…
Shockingly = Massive Penalties Are either Quieted or never see the light of day = “confidential” as regulators agree with bank lawyers that their clients are exposed to “reputational risk” from wrongdoings typically “neither admit nor deny,” could impact the health of the bank. = “Systemic risk” = Public’s will NEVER trust THEM again and folks will withdraw money from law-breaking banks = GOV agrees to Avoid having to bail out remaining depositors if banks eventually fail.
FACT: Federal Deposit Insurance Corp. Improvement Act of 1991 mandates settlements be made public
But FDIC ignores this when it fined Deutsche Bank $54 million for packaging and selling bad mortgage-backed securities to a failed bank = No one heard about it. = LA Times, “The deal might have made big headlines, given that the bad loans contributed to the largest payout in FDIC history, $13 billion.” = Deal cut with the bank’s lawyers to keep it quiet violating FDIC REQUIREMENTS.
But FDIC ignores law in 2013 for Wells Fargo according to the Financial Times = Wells “allegedly misleading disclosures on mortgage securities” it sold to Fannie Mae and Freddie Mac.
Real Reason No One Goes to Jail = A FORM OF BLACKMAIL = YOU HURT MY REPUTATION AND THE MIDDLE CLASS HAS TO BAIL ME OUT! = Too-big-to-fail = TOO BIG TO STOP FRAUD!
Banks only face civil charges for their CRIMES and pay “A COST-OF-DOING-BUSINESS” fines = USUALLY A SLAP ON THE WRIST of 1% to 2% of their BENEFITS FROM THEIR CRIMES!
BANKS AND EXECUTIVES = ARE NEVER assigned criminal prosecutions of any banks or banker EXECUTIVES. = Too-big-to-jail = TOO BIG TO STOP FRAUD!
NO GOV Agencies bringing civil actions against BIG BANKS can pursue them criminally = EXTREME Egregious cases are sent to the Department of Justice. = BUT DOJ DOES NOTHING = LANNY BREUER + HOLDER = Covington & Burling LAW FIRM REVOLVING DOORS = PROTECTS BIGGEST BANKS!
LANNY said in 2012 speech to NYC BAR Association = “To be clear, the decision of whether to indict a corporation, defer prosecution, or decline altogether is not one that I, or anyone in the Criminal Division, take lightly. We are frequently on the receiving end of presentations from defense counsel, CEOs, and economists who argue that the collateral consequences of an indictment would be devastating for their client. In my conference room, over the years, I have heard sober predictions that a company or bank might fail if we indict, that innocent employees could lose their jobs, that entire industries may be affected, and even that global markets will feel the effects.”
Lanny returned to Covington & Burling for $4 Million/Year for a JOB WELL DONE for their clients BIGGEST ON WALL STREET.
BANKS and Banksters caught breaking laws = slap on the wrist + get gifts of Deferred Prosecution Agreements (DPAs) and Non-Prosecution Agreements (NPAs). = Alternative to indictments = “achieved official acceptance” in place of a criminal conviction and sentence. = Corporate misconduct greeted with MEANINGLESS – PROMISING TO OBEY THE LAW + COOPERATE WITH GOV + PROMISE TO FOLLOW RIGOROUS COMPLIANCE MEASURES + PAY A “COST-OF-DOING-BUSINESS” FINE!
Where does the Fine Money Land? = SEC + CFTC + FHFA + FREC regulators overseeing the Lords of the Banking Underworld negotiate settlement fines with bank’s FRAUD LAWYERS = Negotiate their deferred prosecution = DPAs and NPAs confidentiality + demand “neither admit nor deny” allegations + fines!
SEC NOW requires “admissions of misconduct” = Harbinger Capital Partners + JPM
As Lawyers negotiate how much they will pay, they are negotiating who they will pay it to + What they pay in cash + WHO THEY PAY + Other restitution + Credit for costs to help the harmed + PROMISES not to commit the same violations again.
WHO THE BANKS PAY = Banks HATE paying the federal government = NO Deductions or write-offs = GOOD FEDS wants monies paid to reduce the deficit.
WHO THE BANKS PAY = Pay “get out of jail” money because they are guilty of violations and crimes = State attorneys general get money for their state + SEC extracts fines in a Fair Fund = Returned all money to victims + Leftover goes to Treasury. Regulatory agencies get $ZERO to fund the agencies. = GOP CUTS AGENCIES’ FUNDING TO PROTECT THEIR BRIBING CRIMINALS! SENATOR WARREN’S CFTC SUFFERS GOP HOUSE STRANGULATION = GOP agriculture committees MEMBERS raise money for their political campaigns.
WHO THE BANKS PAY = JPM agreed to fine of $13 Billion for mortgage-related FRAUD =
- = $4 Billion already paid to Fannie and Freddie
- + $3 Billion to States
- + $4 Billion in “credits” = Facilities to aid aggrieved homeowners = NO CASH
- + $2 Billion to DOJ
- = $7 Billion write-off for JPM = IRS NEVER challenges big banks write-offs
- + Force borrowers to continue to be JPM clients
- = Negotiations that the public never hears about.
$25 Billion Penalty settlement with 5 largest mortgage services: BofA + JPM + Wells + Citigroup + Ally Financial (GMAC) = 60% of the nation’s mortgages.
- = $17 Billion to a series of national homeowner relief effort = principal reduction
- = $3 Billion to underwater mortgage refinancing program
- + $5 Billion to states and federal government
- + Homeowners = Protections = new mortgage loan servicing + foreclosure rules
States can prosecute securitization claims as well as criminal cases.
Borrowers and investors = Can Sue regardless of agreement.
= Good deal for the banks because they get to write off all the “credits” they get for setting up these homeowner relief facilities + write off principal they “forgive.”
= HOMEOWNERS PAY TAX ON ANY AMOUNT FORGIVEN!
Homeowner making $40,000 in 2014 + Gets $100,000 mortgage reduction = Taxable income on $140,000 = Homeowners suffer FOR BANK FRAUD
Big banks who have to pay = DON’T = Insurance = FDIC will impose a fine on insurance to cover civil money penalties.
BANKS AND BANKSTERS = GETTING away with murder – well, almost = never-ending ringing cash registers. = That’s how the settlements games are rigged.
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