Holding Wall Street Accountable
http://thedianerehmshow.org/shows/2011-11-30/holding-wall-street-accountable
A federal judge in New York has rejected a proposed settlement between the SEC and Citigroup. The SEC claimed Citigroup knowingly misrepresented the value of mortgage backed securities in the run-up to the 2008 financial meltdown. In the settlement Citigroup would have been forced to pay a fine but would not have been required to admit to any wrongdoing. The ruling raises the stakes for both parties, and for many others who continue to wonder why so few of the players alleged to have had a hand in the 2008 near collapse of the U.S. financial system have paid a price: Ongoing efforts to hold Wall Street accountable.
Guests
Michael Greenberger
director, Center for Health and Homeland Security at the University of Maryland; former senior regulator, Commodities Futures Trading Commission.
Peter Wallison
Arthur F. Burns fellow in financial policy studies at the American Enterprise Institute; served as general counsel of the U.S. Treasury department in the Reagan Administration
Gretchen Morgenson
Pulitzer Prize-winning business reporter and columnist for The New York Times; co-author of the book, “Reckless Endangerment”
Harvey Pitt
former chair, SEC
Kalorama Partners, LLC
Comments
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YES! Somebody in the third branch of government finally calls bs on these deals and refuses to rubber stamp them sight unseen! Let's hear the details, let's know exactly what CitiGroup did, let's understand this dark power that the banks keep exercising for the price of a huge but hardly crippling fine periodically.
Bringing all these sordid practices out into the light of day will permit Congress to see exactly how to regulate to eliminate these kinds of shady practices that suck money out of customers deliberately kept in the dark. Banks SHOULD admit liability and have that admission used against them in other lawsuits. To keep sheltering them from this significant, preventive liability just lets them off the hook to keep right on doing what they were doing and just pay a few fines every few decades when the fallout on consumers of their manipulative practices becomes just a tad too obvious.
Tell us. Educate us. Give us the tools to be individual attorney's generals in our ability to sue to pry more and more of these schemes out of the dark and into the harsh light of day. Give us the tools to protect our investments. Give us the tools to hold those who reinvest our precious funds 30 to 80 times over without sharing the profits with the ACTUAL fund owners to at least hold them responsible for keeping our money intact rather than at such extreme risk.
It would be a beginning at least.
Someone steals food for their family and they go to jail. In America, a corporation and it leaders can steal billions and get a slap on the wrist, pay a fine and never have to even admit guilt. The leaders get hundreds of millions in salary, plus bonuses, and get to ride off to their 6 mansions in their private jet.
This is called American Justice.
I will believe in America again when I see these corporate thieves get what they deserve. This is what the Occupy people are angry about. For you conservatives out there, this is what happens when you protect rich people to the point where they are unaccountable. Our nation is like a pendulum and at this point it has swung too far to the right. It’s time to bring it back!
I think I heard Ms. Mc Paper say on the PBS Newshour that said federal judge in the SEC/CitiBank settlement case rejected the resolution because if it went through the Government could then fine any innocent bank without cause or proof. Teece claims just the opposite: The fine was rejected because the judge suspected it not large enough to deter the same behavior in the future. It was certainly not large enough to help most of those defrauded. I say the issue is that the Big Banks refuse to admit their crimes because a wave of suits would be unleashed. Maybe Judge Rakoff is a good guy who wants banks to fess up and take their medicine. If American Airlines can go down so can these fraud mills. Break 'em up! Nationalize 'em! And send the Oligarchs to prison! But the SEC and the Justice Dept. do nothing, and the courts are mostly bought. So let's take all our money out and let the billionaires trade script.
"When federal judge Jed Rakoff tossed out a proposed settlement between the Securities and Exchange Commission and banking giant Citigroup on Monday, he signaled to both the SEC and the nation's largest financial institutions that the two parties can no longer snuggle up together in cozy settlements that enable misbehaving banks to pay a fine for their bad deeds without ever requiring the institutions to admit wrongdoing."
http://www.huffingtonpost.com/2011/11/29/citigroup-settlement-sec-judge-...
The government caused the housing crisis (mostly democrats), next to nothing will come from this witch hunt. The joke is on the occupy movement.
This conversation always frustrates me.
"Having spent billions of dollars bailing out businesses that made bad loans and put themselves in a position to fail, what can we do now to make sure that Goldman Sachs, JP Morgan, etc, etc are held accountable for their actions?"
Washington had the opportunity in 2007 to let the free market work, and instead opted to spend billions of dollars making sure that these businesses would *not* reap the financial whirlwind they had sown. Any politician talking about holding them accountable now is essentially talking about how to hold the bank robber accountable after they've personally driven the getaway car. Capitol Hill's actions speak to what their priorities are far more than this kind of posturing.
Drug sales, illecit sex- maybe(hopefully?- jealous?),
and no taxes being paid- so necessary to spend additional money for troops to move in and clear the riff-raff out. Similar policies in England have saved- er- 180 million EXTRA cuts needed to make up for previous effects of savings cuts to society(thats the people- mostly). So far. Like father - er- mother(Queen today), like sons and daughters faithfully following that path(*payback for them following US into Iraq?)?
Only heard part of news on passing car radios this am so unsure which VA's were raided... sounded like our nation's original Capitol- Philadelphia)where our fathers were also made empty promises. And in CA- but those veterans all nuts, fruits and flakes anyway, so do not matter nationally(as only 1/8 of US).
NPR, whose broadcasts kindest, LOADED with semantics, weighted negatively to ridicule US. Cannot imagine what FOX did with story. Already ill so no desire to feel more nauseous by trying to hear that... ruins the aim... and digestion.
Americans never used to get the government they paid for... but with additional costs and security measures home and abroad... with or without needed domestic mathemeticians(but no veterans- they take oaths seriously) to plumb depths of consumers on-line metrics for greater returns via higher individual pricing per slit- er- 'gift'(just like flying)...
WILL get the government and economy Americans deserve for once. And with need for four soldiers per useless noncooperating worthless veteran(like homeless in general- over represented at OCCUPY) to arrest or 'relocated'(are the Soylent Green Industries facilities full already?).
The 'active' self-emolition of returning veterans locally- not reported. Number of home invasions, break-ins, and gunfire NOT eminating from base... INCREASING- and barely reported(wild feral dogpacks from abandoned pets too). Requiring troopers to remove medals for TSP on repatriating 'home'- necessary evil for America; The patriots necessarily being a security risk(no doubt). Wait. Luckily most destroy only themselves and immediate families.
More likely threat after family, savings and job gone though; The new homegrown terrorist threat come home. Though a few more eligible for domestic employment providing security for hollow daze shopping- of course~!. And giving a chance to work though the PTSD at relocation parties... Congress does care AND has the 'Soylent' plan. Rest easy sheeple.
No doubt most unable to comprehend the messages above. Easy, sheeple, lay back and relax... as here IT comes. Do not fight back... makes the Soylent processors uncomfortable. Cannot have that in our legally purchased America. Fifteen minutes of free speech up at library- next OCCUPYier/ USer please.
Facebook blocks access to account- requires phone.
No phone- no money for targeting ads- so useless user.
No problem- after life time service becoming used to being called useless.
Gave US idea of running for office- under the American Pirate Party of course. They actually have non Soylent Green plans for the future.
How are the banks responsible when the wall street casino was legislated with the repeal of Glass-Steagall.
Americans hear our leaders repeat that "no one is above the law" over and over again. Yet we have not witnessed one individual involved with the sub prime mortgage debacle held accountable. Not one prosecution.
Professor William Black spoke at the Occupy LA teach in several weeks ago. He was the head litigator during the Savings and Loan scandal. He stated that they made 10,000 criminal referrals and over 1000 were prosecuted. Where is the Dept of Justice on this?
Go google LA Occupy teach in/William Black/you tube.
Hope the Diane Rehm show has him on to discuss the lack of accountablity
Obama Administration Has Many Ties to Big Banks--And Protesters Occupying Wall Street Know It
The president has been left behind by a fast-growing movement that considers the Democratic Party closer to the banks than to the 99 percent.
In so many ways, the republicans and democrats are very much the same.
"Throw Them All Out"
Dear Diane,
What if "Louie the Bookie" placed bets on a Central Park horse that draws a carriage to win the Kentucky Derby? His "employers" would close down his "operation". Yet, Wall Street Brokers, with $1,500 suits, used Junk Bonds, called them AAA Bonds, to place bets and put municipalities throughout this country at risk. And Government officials wonder why people are gathering to express their outrage?
Bankers once were the community pillars; the engineers who steered this country's enterprises to successes. Now, bankers glorify themselves when their bets fleeced Americans and eviscerated whole communities.
The Centers for Disease Control tracks down and isolates toxic and infectious substances; Wall Street breeds and spreads toxic substances it calls assets.
It's time we clean up Wall Street and make America's economy healthy and vibrant, again.
The "Occupiers" are saying "Let Americans -- businesses, communities and families exhibit their resourcefulness -- and not be shut out and fleeced, with a bleak future institutionalized by the Wall Street Barons."
Thank you
During the LA Occupy Wall Street teach in Professor William Black stated that during the Savings and Loan scandal there were 10,000 criminal referrals and over 1000 prosecutions. He also stated that these banking institutions have not only created means to block holding them accountable but means to block deeper investigations into their fraudulant activities.
How would any of your guest explain the lack of criminal referrals and prosecutions in the latest banking scandal?
Hope the Diane Rehm show has Professor William Black on to discuss this lack of accountability
How can it possibly be in the public interest for the accountable individuals, not to face criminal charges in addition to personal civil liability?
This is the opinion of the SEC?
The more things changed, the more they've stayed the same.
The relationships are still nauseatingly incestuous.
Mr. Pitt is an embarrassment and exactly what is wrong with the SEC, here he is, still shilling shamelessly for Wall Street. I would be ashamed. Citi has been shown over and over to act in a mendacious fashion toward it's investors, clients, and partners. This is exactly what is wrong with the SEC, and our government in general... don't pay attention to what they say, simply look at their actions. In each and every instance, they act in service of the banks, financial elite, and Wall Street. If there is any contrary evidence, please post it.
We have complete regulatory capture. They talk about a class-war... I say it already happened and "we the people" lost.
So Citi Group wants an out of court settlement because it "prefers not to be subjected to a trial". How nice to be a white collar criminal.
If you hold up a bank with a gun you get put away for years. If you're a bank and you hold up your clients with a pen or a few strokes of a keyboard, you walk.
It is so funny to listen to Peter wallison and harvey pitt blame Government and not balaming the crooks on wall street Pitt was on the watch during the rape of America and Wallison is the stooge of the 1%
10:36- Peter Wallison earns another lollipop from Daddy Koch.
10:37-Michael Greenberger slaps it from Peter's hands.
See how some informed people can comment in advance and be right on?
Gretchen just said that there were 839 prosecutions during the Savings and Loan debacle. Professor William Black who was deeply involved with exposing the S and L fraud recently stated that after the Savings and Loan debacle banking institutions developed means to block prosecutions of banking fraudsters and have developed means to block deeper investigations into their activities?
Can your guest discuss this?
It does not make sense that there has not been one individual held accountable during this most recent banking fraud debacle.
Can you please have Professor William Black on your program
Do banks write-off foreclosed homes?
Do they pay taxes on the foreclosed homes? If they don't they should.
We pay taxes to buy the houses although we don't really own them until they are paid off.
Also why not tax stock exchanges, 1% per sale. We pat taxes when we buy anything else. FDR charged a penny a share. The real reason more money is not invested in job making enterprise is that it's to easy to invest in the stock market.
Larry, Cincinnati
This is small change to Citibank's investment banking division. They will fire some employees then give big bonuses to their investment banking staff and top CEO's. As someone whose husband was 'downsized' from Merrill Lynch to boost quarterly profits so the highest paid staff could receive their big bonuses.
The economic downturn of 2008 is a result of reckless behavior of Wall Street, the rating agencies doing the bidding of the companies paying them money to rate their products, deregulation, the FEC being made a partner of the organizations that they were regulating, reducing the agency's budget, & hiring regulators who are not financiers not because of bad mortgages. Hedge funds operators allowed to decide what mortgages would be put into CDO's to insure that the CDO's would fail then legally buying insurance a.k.a Credit Default Swaps in case the CDO's fail. And to top it off, these same top moneymakers received their compensation in the form of payment taxed at 15%.
well, between Peter and Mr Pitt, the legal and administrative minds that make winking and nodding the "way we've always done it" are well represented.
Mr Pitt "didn't quite hear" the host's first question as to whether the SEC has done its job. and then when the question was repeated, repeated what he already had to say about this particular case.
We in the states have grown accustomed to the media being polite when an illustrious guest graciously agrees to listen to questions - their refusal to answer is a a part of the ritual. And Peter's condescending chant of legal irrelevancy and blaming the housing policy is a simplistic insult.
And before you brush this off as irrelevant, it is only as irrelevant as the millions of americans robbed by the "system" and being forced to listen to people like Peter righteously assert that criminal results occurred with no individual criminals necessarily involved.
These are glib and practiced set pieces on both men's parts, and most of the media's failure to decode them is part of the problem.
Can the guests speak about Judge Rakoff's order in relation to the recent whistleblower from the SEC that says the SEC Enforcement Division has had an over 20 year history of destroying evidence? Also, I believe the whistleblower showed in his filings that the SEC has had a revolving door between them and Wall Street, to the effect that the people charged with prosecuting Wall Street are also trying to get jobs from the people they prosecute.
Could it be that Judge Rakoff's order is also questioning the integrity of the SEC in reaching what amounts to a paltry settlement?
Also, Peter made "preponderance of the evidence" sound like "beyond a reasonable doubt" in terms of legal standards. Preponderance is the lowest legal standard, and if the SEC couldn't even make that, there is something severely wrong with the agency.
After the Savings and Loan scandal did Wall Street banking institutions push and pass legislation or any means to block prosecuting them or blocking deeper investigations into their activities? It just does not make sense that 839 individuals were prosecuted and sent to jail during the Savings and Loan scandal and not one person has been held accountable during this most recent banking debacle.
No one believes Peter who was saying that no crimes were committed. Absolutely no one
well, between Peter and Mr Pitt, the legal and administrative minds that make winking and nodding the "way we've always done it" are well represented.
Mr Pitt "didn't quite hear" the host's first question as to whether the SEC has done its job. and then when the question was repeated, repeated what he already had to say about this particular case.
We in the states have grown accustomed to the media being polite when an illustrious guest graciously agrees to listen to questions - their refusal to answer is a a part of the ritual. And Peter's condescending chant of legal irrelevancy and blaming the housing policy is a simplistic insult.
And before you brush this off as irrelevant, it is only as irrelevant as the millions of americans robbed by the "system" and being forced to listen to people like Peter righteously assert that criminal results occurred with no individual criminals necessarily involved.
These are glib and practiced set pieces on both men's parts, and most of the media's failure to decode them is part of the problem.
Peter Wallison is way off base as far as not being able to find the evidence to bring criminal cases against WS perps. Prosecuting just a few to start will cause the perps to come out of the woodwork and provide the evidence, turning on the big perps like rats deserting a ship, providing all the additional evidence needed.
These people have robbed America, and it's the governments fault! Give me a break. They knew what they were doing, they understood where the lines were and just how close you could get to them. Theft in any situation should be a criminal offense. They were only concerned about the fees that they gained during this debacle.
Your guest from the AEI wants a reason why these Wall Streeters aren't being prosecuted other than the fact that they aren't guilty? Really? How about the fact that the regulatory agencies and the Wall Street firms are essentially a revolving door? How about the fact that the Wall Street firms have bought our elected officials through contributions of enormous and now (thanks to Citizens United) legally untold millions or billions in contributions to political campaigns? It strains credulity that your AEI guest, who's foundation is probably largely funded by Wall Street firms and their executives is saying this. I wish this was televised so I could see if he's doing it with a straight face!