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The Great Real Estate Swindle All things related to the housing debacle including sub-prime lending practices, foreclosure fraud, MERS, REMICS and banking and political malfeasance.

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Old 07-12-2016, 06:40 AM   #1
Sonny
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Default Too Big to Jail, Obama and the Banksters have a good relationship

“Too Big to Jail: Inside the Obama Justice Department’s Decision Not to Hold Wall Street Accountable”

by Wolf Richter • July 11, 2016

A galling read by the US House of Representatives.

The US House of Representatives today released the results of its three-year investigation – hampered along the way by the Department of Justice and the Department of the Treasury – into why HSBC and its executives weren’t prosecuted.

Empirical evidence has told us for years that in the US a bank and its executives cannot be prosecuted if the bank is big enough. We’ve come to call this type of bank “Too Big to Jail.”

Empirical evidence has also told us that a bank can do essentially whatever it wants to, given that, if caught, it may have to pay a fine that then becomes just part of the cost of doing business. Wall Street doesn’t care about fines. They’re “extraordinary items” that banks and analysts systematically exclude from their “ex-items” per-share earnings.

Fines matter under GAAP reporting. But they don’t matter in the rosy picture that Wall Street paints of the banks. And so they don’t matter.

But now comes the House Financial Services Committee and offers evidence beyond our “empirical evidence”: a 288-page report, “Too Big to Jail: Inside the Obama Justice Department’s Decision Not to Hold Wall Street Accountable.” And below is the Committee’s galling summary. Enjoy!

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Old 07-12-2016, 06:53 AM   #2
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Rep Cmte Financial Services

Too Big to Jail: Internal Treasury Documents Reveal Why Justice Department Did Not Prosecute HSBC

Washington, Jul 11, 2016 -

The House Financial Services Committee on Monday

released a staff report of its investigation into the U.S. Department of Justice’s decision not to prosecute HSBC or any of its executives or employees for serious violations of U.S. anti-money laundering laws and related offenses.

The Committee initiated its investigation in March 2013. The Department of Justice (DOJ) and the Department of the Treasury failed to comply with the Committee’s requests to obtain relevant documents, necessitating the issuance of subpoenas to both agencies.

Approximately three years after its initial inquiries, the Committee finally obtained copies of internal Treasury records showing that DOJ has not been forthright with Congress or the American people concerning its decision to decline to prosecute HSBC.

These documents show that:
  • Senior DOJ leadership, including then-Attorney General Eric Holder, overruled an internal recommendation by DOJ’s Asset Forfeiture and Money Laundering Section to prosecute HSBC because of DOJ leadership’s concern that prosecuting the bank would have serious adverse consequences on the financial system.
  • Notwithstanding Attorney General Holder’s personal demand that HSBC agree to DOJ’s “take-it-or-leave-it” deferred prosecution agreement deal by November 14, 2012, HSBC appears to have successfully negotiated with DOJ for significant alterations to the deferred prosecution agreement’s terms in the weeks following the Attorney General’s deadline.
  • DOJ and federal financial regulators were rushing at what one Treasury official described as “alarming speed” to complete their investigations and enforcement actions involving HSBC in order to beat the New York Department of Financial Services.
  • In its haste to complete its enforcement action against HSBC, DOJ transmitted settlement numbers to HSBC before consulting with Treasury’s Office of Foreign Asset Control to ensure that the settlement amount accurately reflected the full degree of HSBC’s sanctions violations.
  • The involvement of the United Kingdom’s Financial Services Authority in the U.S. government’s investigations and enforcement actions relating to HSBC, a British-domiciled institution, appears to have hampered the U.S. government’s investigations and influenced DOJ’s decision not to prosecute HSBC.
  • Attorney General Holder misled Congress concerning DOJ’s reasons for not bringing a criminal prosecution against HSBC.
  • DOJ to date has failed to produce any records pertaining to its prosecutorial decision making with respect to HSBC or any large financial institution, notwithstanding the Committee’s multiple requests for this information and a congressional subpoena requiring Attorney General Lynch to timely produce these records to the Committee.
  • Attorney General Lynch and Secretary Lew remain in default on their legal obligation to produce the subpoenaed records to the Committee.
  • DOJ’s and Treasury’s longstanding efforts to impede the Committee’s investigation may constitute contempt and obstruction of Congress.

The Committee is releasing this report to shed light on whether DOJ is making prosecutorial decisions based on the size of financial institutions and DOJ’s belief that such prosecutions could negatively impact the economy.
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Old 07-12-2016, 12:57 PM   #3
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Between (a) the vast amounts of cash that the big banks pour into political campaigns, (b) having a lot more legal firepower than the feds, (c) the revolving door between big law firms and Justice (see item (b)), and (d) a regulatory system (and regulators) tailor made for the big banks, what other result would we expect?

IMHO, there needs to be a federal statute which shifts the burden of proof and imputes wrongdoing by corporations to their leadership. Unless we do that, these guys will never change. We also need a Constitutional amendment to undo the carnage created by Citizens United while we are at it. A lot of conservatives are unaware that Citizens United also applies to union contributions.
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