I’m not sure what’s happening with government regulators recently….but they seem to “get it”. After 30 years of laissez-faire economics and rational market theory…government regulators have finally decided to get back in the game. The government has a long history at the state and federal level of taking action when companies abuse or violate the law. Over the past few years – Wall Street has gotten out of these investigations with harsh fines…but those fines pale in comparison to the blood drawn on the American taxpayer or the total earnings of the firms that had to pay up.
Wall Street has essentially been a large Mafia crime syndicate operating above the law without impugnity, creating their own set of rules, bribing government officials and law men, hiring police and military for their own private armies, knocking off their rivals with either bad deals or a symbolic tommygun now and again and most importantly – ALWAYS managing to stay out of jail. Wall Street has been Teflon Don; after either pleading the 5th or saying “I’m a legitimate businessman”….they walk out of court with a big shit-eating grin that says “I did it, but they can’t prove it”. That is what America’s financial system has devolved into; although – someone has been eating their Wheaties lately because government agencies are actually doing their fucking jobs (let’s not get ahead of ourselves – I know).
#1 – As we have already shared HERE - the FBI is pursuing the largest insider trading investigation in modern history
#2 – As reported – the 4 Too Big To Fail banks and Ally Financial are going to pay $25 billion to assist homeowners with their underwater mortgages along with various cash payouts etc in return for various mortgage law violations. Source: HERE.
And now #3…wouldn’t ya know that the SEC decided to finally get in the game and do it’s job too. Goldman Sachs, Wells Fargo, JP Morgan Chase and several other banks have been served notice that they are being investigated for violations of mortgage securities fraud. The SEC does not usually do this unless they have something that proves complicity.
The notices show the enforcement staff has concluded that violations occurred, Frenkel said. They’re also the first time during the agency’s investigations that banks will have an opportunity to defend themselves, he said.
The investment bank paid $550 million in 2010 to settle SEC claims that it misled investors on a mortgage-linked investment in 2007. In that case, the company said it made a “mistake” in omitting disclosures.
Wells Fargo, which revealed the SEC’s warning in an annual report, said the government has been examining whether it properly described facts and risks in offering documents.
Source: Business Week
This new find will likely result in more fines and no jail time unlike the FBI investigation…but it would appear that we’re upgrading from security guards to keystone cops. Perhaps with vigilance and an American public that demands good governance and proper funding of financial regulators – we’ll actually have cops on the beat who really make a difference.
