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TOO BIG TO FAIL AND TOO BIG TO FIGHT OR REGULATE

SEE 74051381-Judge-Rakoff-s-Ruling-in-S-E-C-v-Citigroup-Global-Markets

SEE JUDGE BLOCKS CITI SETTLEMENT WITH SEC

SEE LONE JUDGE EXPRESSES FURY AT BANKS AND REGULATORS

SEE NEITHER REASONABLE, NOR FAIR, NOR ADEQUATE, NOR IN THE PUBLIC INTEREST

EDITORIAL COMMENT: Investors lost $700 million in one deal while Citi made $160 million. The loss to investors was intentional, knowing with full appreciation of the consequences. They weren’t acting as an intermediary bank or broker, they were just acting as a common grifter. The proposed settlement was $285 million with no admission of any of the facts supporting the case and no restitution — i.e., giving back the money they stole. Now multiply that deal 25,000 times and you get the full scale of the securitization scam that is ripping apart the economies of this nation and most nations of the world. The amount exceeds the gross national product of several countries combined including our own.

There is no greater threat to our national security than the power wielded by the Banks and what they are willing to do with that power. For many Americans the damage is already done — their lives destroyed by the exact same tactics deployed against “smarter” people who manage institutional investment funds. For the rest, the next waves are coming and those who thought they were immune from the crisis or affected only slightly are in for a rude awakening. The risk rises every day of an unruly explosion of anger unemployed and underemployed population that can’t afford to put a roof over their heads, eat decent food, and get proper medical care.

The answer from the SEC is that the Banks are too big to fight against. The Banks have greater resources. We have a trillion dollar military budget allegedly for national security but we have no money to assure domestic security and tranquility? The answer from the federal reserve is non-interest loans of $7 trillion to the same crooks that started the whole mess and stole the money, property and futures of every American and future generations. The answer from the U.S. Treasury has been direct infusion of money into the same institutions who cheated, lied, and stole money from the taxpayers, investors and homeowners.

In any ordinary case of fraud, restitution is the norm. Then come the penalties, civil and criminal. Let anyone of you do anything remotely similar to what the Banks did and you will end up in jail with most of your assets seized to make good on restitution. Look at Madoff and other cases where receivers and trustees were appointed to decide on how to divide the restitution payments and how to collect up the assets.

Changing the rules as a result of the size of the fraud is the rule of men, not the rule of law. If we are not a nation of laws then we are nothing more than a banana republic with dictators running the country. If the SEC is stating the policy of this country that it won’t enforce the laws against the Banks because they lack the resources to prosecute then the country has surrendered its sovereignty to the Banks. UBA, not USA.

Judge Rakoff is the lone voice in the wilderness of chicken-hearted Judges and lawyers who won’t go for the jugular to save their own country from banksters who have siphoned off the life-blood of the country and are now using our weakened condition against us. Look to history. This can only end up one way — a general strike or uprising of people who force change when they can’t eat anymore and can’t find a place to live. This isn’t a revisit to the Great Depression, it is a coup engineered by the Banks who have taken control of the country, its policies, and its direction.

President Obama needs to come out of his ivory tower and engage the Banks in a fight to the death, with or without the direct help of congress. There are enough laws, rules and regulations to enforce that will take care of the situation. The people know it, understand it and want it. If Obama won’t give the people what they want then he can kiss his second term good-bye.

FROM JUDGE RAKOFF’S ORDER:

“According to the S.E.C.’s Complaint, after Citigroup realized in early 2007 that the market for mortgage backed securities was beginning to weaken,    tigroup created a billion-dollar Fund (known as “Class v Funding IIIU) that allowed it to dump some dubious assets on misinformed investors. This was accomplished by Citigroup’s misrepresenting that the Fund’s assets were attractive investments rigorously selected by an independent investment adviser, whereas in fact    tigroup had arranged to include in the portfolio a substantial percentage of negative    projected assets and had then taken a short position in those very assets it had helped select….

“…Citigroup knew in advance that it would be difficult to sell the Fund if Citigroup disclosed its intention to use it as a vehicle to unload
hand-picked set of negatively projected assets, see Stoker Complaint…

“…this would appear to be tantamount to an allegation of knowing and fraudulent intent (“scienter,” in the lingo of securities law)…

“Finally, in any case like this that touches on the transparency of financial markets whose gyrations have so depressed our economy and debilitated our lives, there is an overriding public interest in knowing the truth. In much of the world, propaganda reigns, and truth is confined to secretive, fearful whispers. Even in our nation, apologists for suppressing or obscuring the truth may always be found. But the S.E.C., of all agencies, has a duty, inherent in its statutory mission, to see that the truth emerges; and if    fails to do so, this Court must not, in the name of deference or convenience, grant judicial enforcement to the agency’s contrivances.”

Editor’s Note: One more thing (although there are many others that could be added here): Why is it so hard for America to accept that the investors were defrauded in the same scheme that sold bogus financial products to homeowners who are now evicted out of their homes. Why are we picking up one end of the stick and not the other. Why are we blaming the victims on one end of the stick and blaming the banks on the other? Where is the case for fraud in the execution, fraud in the inducement, damages and restitution for homeowners?

It is a fair bet that virtually 100% of those who signed mortgage papers had no inkling that they were issuers of paper that would be used as securities, valued as securities and treated as securities and that therefore they would be liable not only as Payors under the so-called notes, but as issuers in a fraudulent securities issuance scheme about which they had neither knowledge nor even access to knowledge.

If you track the 51 cases so far in which the SEC found this type of fraud, you see the same pattern over and over again. By what standard of conduct that will guide us in the future as to our behavior, will we be able to look into the face of homeowners who were tricked into signing papers in loan derivatives that burgeoned from a selection of 4-5 in 1974 to 450 possible loan products in 2003? How can we justify blaming them and expect anything other than chaos in the marketplace as a result?

In a world where victims are “deadbeats” (if they are individuals) and thieves are the center piece in the halls of power, there are no standards that we can depend upon — just the expectation that some small group of people might tell us that what we had we don’t have anymore because they said so. Nothing could undermine confidence in the commercial markets than that — and yet the media, the government and big business and Banks are pursuing exactly that policy with an obvious end result undermining the very structure of our government, our society and our morality. Money has now made its own morality and is the alter at which we now worship above all else. Do we submit?

Tags: bankruptcy, borrower, Citi, countrywide, disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, Goldman, LOAN MODIFICATION, modification, Obama, quiet title, RAKOFF, rescission, RESPA, SEC, securitization, settlement, TILA audit, trustee, WEISBAND
Posted in bubble, Corruption, Eviction, securities fraud |