Tag: Bank of America

Still Bailing Out the Banks

Cross posted from The Stars Hollow Gazette

Nearly a year ago Rolling Stone contributing editor, Matt Taibbi wrote about how the Bank of America had defrauded everyone yet the US government kept bailing it out. They got a slap on the wrist and a paltry $$137 million fine for bilking needy schools and cities all the while plotting to rig global interest rates. In that same article from March 29th, 2012, Matt noted that BoA was still failing, yet they were still being bailed out. Why? The government’s excuse then and still is that they are too big to fail and too big too jail.

This was not fixed by Dodd-Frank and the promise to investigate the mortgage fraud and hold the banks accountable for bringing down the housing market and the economy along with it never materialize.

On Saturday in her New York Times article Gretchen Morgenson revealed that, we, the American taxpayer, are still bailing out Bank of America in secret deals :

That the New York Fed would shower favors on a big financial institution may not surprise. It has long shielded large banks from assertive regulation and increased capital requirements.

Still, last week’s details of the undisclosed settlement between the New York Fed and Bank of America are remarkable. Not only do the filings show the New York Fed helping to thwart another institution’s fraud case against the bank, they also reveal that the New York Fed agreed to give away what may be billions of dollars in potential legal claims.

Here’s the skinny: Late last Wednesday, the New York Fed said in a court filing that in July it had released Bank of America from all legal claims arising from losses in some mortgage-backed securities the Fed received when the government bailed out the American International Group in 2008. One surprise in the filing, which was part of a case brought by A.I.G., was that the New York Fed let Bank of America off the hook even as A.I.G. was seeking to recover $7 billion in losses on those very mortgage securities.

It gets better.

What did the New York Fed get from Bank of America in this settlement? Some $43 million, it seems, from a small dispute the New York Fed had with the bank on two of the mortgage securities. At the same time, and for no compensation, it released Bank of America from all other legal claims.

[…] To anyone interested in holding banks accountable for mortgage improprieties, the Fed’s actions are bewildering. If the Fed intended that Maiden Lane II own the right to sue Bank of America for fraud, why didn’t it pursue such a potentially rich claim on behalf of taxpayers? The Fed made $2.8 billion on the Maiden Lane II deal, but the recovery from Bank of America could have been much greater. Why did it instead release Bank of America from these liabilities and supply declarations that seem to support the bank in its case against A.I.G.?

The New York Fed would not discuss this matter, citing the litigation. But taxpayers, who might have benefited had the New York Fed brought fraud claims, deserve answers to these questions.

[…] A New York Fed spokesman said it supported the settlement because it would generate significant value without potentially high litigation costs.

Let’s recap: For zero compensation, the New York Fed released Bank of America from what may be sizable legal claims, knowing that A.I.G. was trying to recover on those claims.

If they’re too big to fail, to big to jail then these banks should be too big to exist.

The Failures of the SEC & Continued Protection of the Big Banks

Cross posted from The Stars Hollow Gazette

Nothing surprising about the revelation in today’s New York Times that the SEC has failed to get tough with the big banks but it does highlight how Occupy Wall St. has change this conversation in the traditional media that is now taking a more critical look at what is wrong with the economy and why. Despite all the whining from the agency that it doesn’t have the resources or the tools, when in fact it does but has refused to use them against the biggest and repeat offenders. The SEC has repeatedly granted waivers to the laws and regulations that stop fraud:

JPMorganChase, for example, has settled six fraud cases in the last 13 years, including one with a $228 million settlement last summer, but it has obtained at least 22 waivers, in part by arguing that it has “a strong record of compliance with securities laws.” Bank of America and Merrill Lynch, which merged in 2009, have settled 15 fraud cases and received at least 39 waivers.

Only about a dozen companies – Dell, General Electric and United Rentals among them – have felt the full force of the law after issuing misleading information about their businesses. Citigroup was the only major Wall Street bank among them. In 11 years, it settled six fraud cases and received 25 waivers before it lost most of its privileges in 2010.

The SEC also does keep an organized data base of the waivers it granted, so in its investigation the NYT’s had do some digging but found some very telling facts about the SEC’s failures to protect investors while protecting the big banks from lawsuits and prosecution:

JPMorganChase is among the big Wall Street firms that have been granted multiple waivers with nearly every settlement of S.E.C. fraud charges. Last July, it agreed to pay $228 million to settle civil and criminal charges that it cheated cities and towns by rigging bids with other Wall Street firms to invest the money raised by several municipalities for capital projects.

JPMorgan received three waivers related to that case for privileges that it otherwise would have lost. But the S.E.C. said the company’s fraudulent actions didn’t involve misleading investors about JPMorgan’s business. [..]

Despite six securities fraud settlements in 13 years, JPMorgan rarely if ever lost any special privileges. It has been awarded at least 22 waivers since 2003, with most of its S.E.C. settlements generating two or more. In seeking the reprieves, lawyers for JPMorgan stated in letters to the S.E.C. that it should grant a waiver because the company has “a strong record of compliance with the securities laws.”

JPMorgan isn’t the only big bank that has received a pass on fraud from the SEC, Bank of America has been a recipient of favored status:

In 2009, the S.E.C. was negotiating with Bank of America over charges that it had failed to disclose to shareholders that billions of dollars in bonuses were being paid to Merrill Lynch executives just as Bank of America was bailing out the firm.

Because the S.E.C. charges involved fraudulent statements by both Bank of America and Merrill Lynch about their financial status, the merged company was in danger of losing its special privileges for both offerings and forecasts. [..]

It settled the case by agreeing to a $150 million payment. The S.E.C., however, decided not to charge the bank with fraud, which could have endangered the bank’s special status. Instead, the S.E.C. charged Bank of America with violating disclosure rules for shareholder materials and proxies, and Bank of America kept its privileges.

It took years before the SEC finally took action against Citigroup for its violations of rules and regulations but in 2010. That only happened because Citibank blatantly lied to its investors about the amount of risk it was carrying on its balance sheets. In its disclosure the bank stated that it was only holding $13 billion in risks when in reality it was $50 billion. It settled the case for $75 million but because of the falsification of its financial statement it lost the ability to insulate itself from lawsuits over mistaken predictions about its business and had to wait weeks for the SEC’s approvals to make itself eligible to sell stocks, bonds and other securities to the public. Prior to those sanctions Citibank had settled six fraud cases and received 25 waivers. Meanwhile JPMorgan, Gold Sachs and others have avoided sanctions and continue their fraudulent practices.

Yves Smith at naked capitalism in pointing out the significance of this article makes this observation:

What the article does not make quite clear is the SEC rationale for this double standard. I’d hazard that it’s that big financial players are often in the market raising funds, and restricting their access is, well, just a bit too mean since they are money junkies. Just look how hard it was for Citi when it fell out of the SEC’s most favored nations status and lost its ability to use so-called “shelf registrations” to sell stock and bonds:

   And the companies continue to use rules that let them instantly raise money publicly, without waiting weeks for government approvals. Without the waivers, the companies could not move as quickly as rivals that had not settled fraud charges to sell stocks or bonds when market conditions were most favorable.

OMG, if you break the law, you might be put at a competitive disadvantage! Can’t have that, now can we?

She concludes:

[..] As we have said, one of basic rules of regulating is to make sure the regulated know you are not cowed by them. When I was a young person working on Wall Street, investment banks were afraid of the SEC. By contrast, this article reveals, as many have suspected, that regulators have plenty of tools to bring banks to heel. They choose not to use them.

The SEC does have a defense of sorts, which is (as we have recounted) that Congress has cut off funding when it merely tried to be tough in defending retail investors from abuses under Arthur Levitt in the 1990s. The passivity of the SEC is a symptom of elite corruption. A reform-minded President could choose to cross swords with Congress and defend the agency against harassment for tough minded enforcement. But that would be in a parallel universe where the banks were not in charge.

It was the Occupy Wall St. movement and a handful of state attorneys general who have changed the conversation from protecting the 1% to investigating them and looking at their practices and the agencies that regulate them with a more critical eye.

FDIC Objects to BoA Bailout & Files Suit

Cross posted from The Stars Hollow Gazette

Well, well, this is getting juicy. The FDIC has filed a lawsuit objecting to the $8.5 billion bail out of the Bank of America:

The FDIC, the receiver for failed banks, owns securities covered by the settlement and said it doesn’t have enough information to evaluate the accord, according to a filing yesterday in federal court in Manhattan.

Under the agreement, Bank of America would pay $8.5 billion to resolve claims from investors in Countrywide Financial Corp. mortgage bonds. The settlement was negotiated with a group of institutional investors, including BlackRock Inc. (BLK) and Pacific Investment Management Co. LLC, and would apply to investors outside that group.

Bank of New York Mellon Corp. (BK), the trustee for the mortgage-securitization trusts covered by the agreement, has asked a New York state judge to approve the settlement in November. An investor group is trying to move the case to federal court, which Bank of New York opposes.

Investors that would be bound by the settlement, including American International Group Inc., have criticized the deal and Bank of New York’s role representing investors in the mortgage bonds. New York Attorney General Eric Schneiderman and Delaware Attorney General Beau Biden have sought to intervene in the case and asked the court to reject it.

The Nevada Attorney General Catherine Cortez Masto has further upped the ante:

The attorney general of Nevada is accusing Bank of America of repeatedly violating a broad loan modification agreement it struck with state officials in October 2008 and is seeking to rip up the deal so that the state can proceed with a suit against the bank over allegations of deceptive lending, marketing and loan servicing practices.

In a complaint filed Tuesday in United States District Court in Reno, Catherine Cortez Masto, the Nevada attorney general, asked a judge for permission to end Nevada’s participation in the settlement agreement. This would allow her to sue the bank over what the complaint says were dubious practices uncovered by her office in an investigation that began in 2009.

In her filing, Ms. Masto contends that Bank of America raised interest rates on troubled borrowers when modifying their loans even though the bank had promised in the settlement to lower them. The bank also failed to provide loan modifications to qualified homeowners as required under the deal, improperly proceeded with foreclosures even as borrowers’ modification requests were pending and failed to meet the settlement’s 60-day requirement on granting new loan terms, instead allowing months and in some cases more than a year to go by with no resolution, the filing says.

The complaint says such practices violated an agreement Bank of America reached in the fall of 2008 with several states and later, in 2009, with Nevada, to settle lawsuits that accused its Countrywide unit of predatory lending. As the credit crisis grew, the settlement was heralded as a victory by state offices eager to help keep troubled borrowers in their homes and reduce their costs. Bank of America set aside $8.4 billion in the deal and agreed to help 400,000 troubled borrowers with loan modifications and other financial relief, such as lowering interest rates on mortgages.

I’ll bet you this has Obama and the remaining AG’s panties in a twist, since, according to rumors they were looking to settle this by Labor Day.

Here’s the link to the FDIC’s brief:

FDIC Objection to Bank of America Mortgage Settlement

US is Tax Free for B of A

Reprint from US UNCUT Daily Kos Site:

On Friday, the San Francisco branch of US Uncut temporarily took over the San Francisco branch of Bank of America.

This is what happened:

<

Now we want you to do the same thing, with or without musical accompaniment – and we’re going to tell you how.

As the video says, the government claims we’re broke, and is slashing  necessities for working and retired Americans. Meanwhile, corporate tax  cheats like Bank of America and GE rake in billions in profit – and pay  back zero in taxes.

Something’s wrong here – and tomorrow, on Tax Day 2011, Americans are going to stand as one and point it out.

We currently have over 100 actions planned for tomorrow. Click here to find your local US Uncut action. Not seeing one nearby that works for you? Then start your own – it’s SUPER easy.

Tomorrow, let’s show the powers that be that Americans are seriously  opposed to cutting schools, firefighters, police, healthcare, job  creation…and seriously in favor of corporations actually paying their  taxes.

Thank you,

The US Uncut Team

P.S. You can learn more here about how the San Francisco action was planned and carried out.

Originally posted to US Uncut on Sun Apr 17, 2011 at 11:12 AM PDT.

Next Democratic Seat to be Opened in Congress

By now it should be no surprise to anyone who pulls the levers in Washington DC. The big banks. Yet some have still not got the memo …

Message to Democratic Congresspersons … check your in box.

Meet Rep. Brad Miller from North Carolina’s 13th District.

What heinous atrocity has Rep. Miller committed?

Rep. Brad Miller is raising questions about Bank of America’s settlement with the government over soured mortgage-backed securities, asking whether the government got the best deal for taxpayers.

[..]In the letter to the Federal Housing Finance Agency, or FHFA, Miller and the others question whether the $3.3 billion settlement represents “the real liability” that Fannie and Freddie bear “as a result of the misrepresentations and breaches of warranty” by the two banks. “Specifically, we request information on how the FHFA determined that the combined $3.3 billion settlement represented the best possible recovery of funds available to taxpayers,” the letter said. In addition to Miller, it was signed by Rep. Keith Ellison of Minnesota, Rep. Stephen Lynch of Massachusetts and Rep. Maxine Waters of California.

The majority of the settlement payment stems from investor put backs by bad deals from the Countrywide balance sheet. Following me? At the height of the economic meltdown Countrywide was purchased by BofA. Bank of America is based in North Carolina.

Unless Rep. Miller didn’t get the memo he should immediately call Illinois Governor Rod Blagojevich and ask what happened to his career career after taking on BofA.

A Leaker Inside WikiLeaks?

The United States diplomatic cables leak (also known as Cablegate) began on 28 November 2010 when WikiLeaks – an international new media non-profit organisation that publishes submissions of private, secret and classified media from anonymous news sources and news leaks – started to publish classified documents of detailed correspondence between the U.S. State Department and its diplomatic missions around the world, releasing further documents every day.

Five major newspapers around the world have been publishing articles based on the leaks, by agreement with Wikileaks. The publication of the U.S. embassy cables is the third in a series of U.S. classified document “mega-leaks” distributed by WikiLeaks in 2010, following the Afghan War documents leak in July, and the Iraq War documents leak in October. The contents of the cables describe international affairs from 300 embassies dated from 1966-2010, containing diplomatic analysis of world leaders, an assessment of host countries, and a discussion about international and domestic issues.



The first 220 of the 251,287 documents were published on 28 November
, with simultaneous press coverage from El PaĆ­s (Spain), Le Monde (France), Der Spiegel (Germany), The Guardian (United Kingdom), and The New York Times (United States). Over 130,000 of the documents are unclassified, some 100,000 are labeled “confidential”, about 15,000 documents have the higher classification “secret”, and none are classified as “top secret” on the classification scale. As of 16 December 2010, 1,532 individual cables had been released. WikiLeaks plans to release all the cables in phases over several months at a pace of about 80 cables per day. (wikipedia – For the contents of released cables, see Contents of the United States diplomatic cables leak.)

Now, the Norwegian newspaper Aftenposten appears in a short article December 21 to be saying that it has obtained access, absent any agreement with WikiLeaks, to all of the 251,287 “CableGate” documents, and will begin publishing all of them over the coming weeks and months.

Aftenposten publishes only in Norwegian, however a Google English translation of the article reads as follows:

Website Wikileaks has published thousands of secret stamped documents. The latest leak is comprised of documents from the U.S. Foreign Service. Aftenposten has no clauses have access to all the 250,000 documents from the last leak.

[…]

The next days, weeks and months we will go through the massive material, and continuously publish news stories both online and paper.

To make our review more efficient, we would like tips from our readers.

Is there anything you wonder where you think the answer may lie in the messages that have been leaked to Wikileaks?

Tip us on wikileaks@aftenposten.no

Hat Tip to LodinLepp at DailyKos.

I can almost hear  the sounds of desk drawers being hurriedly emptied and running footsteps in the halls of the U.S. State Department, from here…

Australia’s Herald Sun confirms the story today, stating:

Video from K Street Protest

cross-posted from Sum of Change

Yesterday, despite the persistant rain, thousands of people showed up on K Street in Washington, DC to protest the actions and lobbying efforts of big banks and to demand economic justice. The Washington Post is comparing the anger to what we have seen at Teaparty protests.

–Mark Freeman, foreclosure victim and SEIU member

Senate Saves Too Big To Fail, Orders Another Iceberg

Yippee !  Wall Street is saved !

Senator Sherrod Brown’s (D OH)  amendment 3733 on the Financial Stability Act bill, to break up the Big 6 Banks into smaller ones that couldn’t take down the entire nation’s economy if they failed, itself did not pass the vote in the Senate this evening, failing by a spectacular 61 noes to 33 yeas, with 6 senators too timid to approach the subject.

http://www.senate.gov/legislat…

Not all bought and paid for yet:

YEAs — 33 votes

Begich (D-AK)

Bingaman (D-NM)

Boxer (D-CA)

Brown (D-OH)

Burris (D-IL)

Cantwell (D-WA)

Cardin (D-MD)

Casey (D-PA)

Coburn (R-OK)***** Republican

Dorgan (D-ND)

Durbin (D-IL)

Ensign (R-NV)

Feingold (D-WI)

Franken (D-MN)

Harkin (D-IA)

Kaufman (D-DE)

Leahy (D-VT)

Levin (D-MI)

Lincoln (D-AR)

Merkley (D-OR)

Mikulski (D-MD)

Murray (D-WA)

Pryor (D-AR)

Reid (D-NV)

Rockefeller (D-WV)

Sanders (I-VT)

Shelby (R-AL)*****   Republican

Specter (D-PA)*****  ex Republican

Stabenow (D-MI)

Udall (D-NM)

Webb (D-VA)

Whitehouse (D-RI)

Wyden (D-OR)

_______________________ end of people who don’t like Great Depressions and financial chaos

___________   Begin list of Senators who liked that Citizens United Ruling by the Supreme Court:

NAYs — 61

Akaka (D-HI)

Alexander (R-TN)

Barrasso (R-WY)

Baucus (D-MT)  a small, cold, scenic state of tiny population,  which votes with Utah.  wtf.

Bayh (D-IN)  does you wife get more insura/pharma stock options for this ?

Bennet (D-CO)

Bond (R-MO)

Brown (R-MA)

Brownback (R-KS)

Burr (R-NC)

Carper (D-DE)   meh. typical.

Chambliss (R-GA)

Cochran (R-MS)

Collins (R-ME)

Conrad (D-ND)

Corker (R-TN)

Cornyn (R-TX)

Crapo (R-ID)

Dodd (D-CT)  looking for that Golden Parachute……

Enzi (R-WY)

Feinstein (D-CA)  meh.

Gillibrand (D-NY)  really, Kirsten, how could you

Graham (R-SC)

Grassley (R-IA)

Gregg (R-NH)

Hagan (D-NC)

Hatch (R-UT)

Hutchison (R-TX)

Inhofe (R-OK)

Inouye (D-HI)

Isakson (R-GA)

Johanns (R-NE)

Johnson (D-SD)

Kerry (D-MA) meh. first no public option, an excise tax, and now this.   you still suck.

Klobuchar (D-MN)

Kohl (D-WI)

Kyl (R-AZ)

Landrieu (D-LA)  say, how’s the Gulf doing, Ms. Mary of Louisiana?

Lautenberg (D-NJ)

LeMieux (R-FL)

Lieberman (ID-CT)  suing Atty General Holder over the tragic Ft Hood shooting information release, too

McCain (R-AZ)

McCaskill (D-MO) midwestern Blew Dawg who thinks she’s a hot shot financial whiz.  ya huh. not.

McConnell (R-KY)

Menendez (D-NJ)

Murkowski (R-AK)

Nelson (D-FL)

Nelson (D-NE)  at least he’s consistently not on our side

Reed (D-RI)

Risch (R-ID)

Roberts (R-KS)

Schumer (D-NY)  wants to be next Majority Leader after making us all get biometric cards. Swell.

Sessions (R-AL)

Shaheen (D-NH)

Snowe (R-ME)

Tester (D-MT)  meh. These netroots Dems.

Thune (R-SD)

Udall (D-CO)

Voinovich (R-OH)

Warner (D-VA)

Wicker (R-MS)

__________________   chickenhearts

Not Voting – 6  

Bennett (R-UT)

Bunning (R-KY)

Byrd (D-WV)  okay, you’re old and frail.  pass. barely.

DeMint (R-SC)

Lugar (R-IN)

Vitter (R-LA)  you don’t have enough diapers to clean anything up

Utopia 19: A Long Way Home

Come senators, congressmen

Please heed the call

Don’t  stand in the doorway

Don’t block up the hall

For he that gets  hurt

Will be he who has stalled

There’s a battle outside

And it  is ragin’

It’ll soon shake your windows

And rattle your walls

For  the times they are a-changin’.

Bob Dylan, “The Times They Are A-Changin'”



BofA’s Ken Lewis charged with fraud.

File this under change we can believe in.

NEW YORK (CNNMoney.com) — New York Attorney General Andrew Cuomo said Thursday it was bringing civil charges against senior Bank of America executives, including former company CEO Ken Lewis, for their role in the company’s controversial purchase of Merrill Lynch…

…The lawsuit contends that the bank’s management team understated the losses at Merrill in order to get shareholders to approve the deal, then subsequently overstated the firm’s willingness to terminate the merger to regulators weeks later in order to get $20 billion of additional aid from the federal government.

Anyone know why they are not bringing criminal charges?  ‘Cause I’d like to see some people go to jail.  Is it that bringing criminal charges against rich people is gauche?  Or something else?   Oh, wells.  The important thing is that it’s a friggn’ indictment of high-level wrong-doing.

Bank of America: Give Me My Money. Now.

Maybe the Internet is the only way to get the ear of a banking corporation so deaf and so greedy that it cannot hear my screaming and thinks it can do whatever it wants with my money.  Maybe even this diary won’t work to open their ears and pierce their conscience and cause them to release the money.  Maybe Bank of America pwns all of us.  I hope it doesn’t, but I suspect it does.

This diary is about my interaction today with B of A.  And it’s about why my son cannot get my hands on $4,019 of his own money until after 5 pm on December 7.  This diary is being written because, guess what, he needs the $$ before then.  It’s his, isn’t it?  Well, maybe not. Not until after 5 pm on 12/7.

Join me in the drive through.

When Robber Barons meet Muckrakers …

There is a clash of titan forces taking place in the American Economy right now. It’s a tale as old as Greed itself.  

It is the tale of the “Powers that Be” running into the watchful eyes of the “World that Should Be”.

The story involves how corporate Robber Barons avoid the watchful glare of the citizen Muckrakers.  

It is the tale of Deception and Greed vs Honesty and Fairness …

Load more