Tag Archives: sec

For Banks the Party Never Stopped

indexHouston        Seven years after the wheels started coming off the bank’s mad money train, it seems clear that settlements for mortgage abuse, which is euphemism for fraud, Dodd-Frank legislation, and what should have been the awesome weight of having collapsed the US and world economy and upended the lives of millions, have essentially been water off a duck’s back for the banking industry and Wall Street.

Let’s just tick off a few recent cases in point.

  • The City of Los Angeles, yes, not the Justice Department, SEC, or Federal Reserve, sued Wells Fargo for pressuring employees in its retail bank with sales quotas to fraudulently enroll people in new customer accounts without their approval.  Plain and simple, shake and bake, no permission needed.
  • Two big banks rather than settling for some hand slaps and big fines, Nomura, a Japanese bank, and the Royal Bank of Scotland, both presumably figuring their home country customers probably didn’t give much of a flip about whether or not they had packaged bad mortgages in the USA, went to trial claiming the dog-ate-their-homework, the economy did it, not them.  The judge found against these miscreants and essentially said their behavior was disgusting.
  • And of course there is the whole cabal of banks that engaged in price fixing and chicanery to fudge the LIBOR rate for interbank and corporate lending including HSBC, JP Morgan Chase, Citi, and a rogues’ gallery of the biggest banks in the world.  Their fines are in the billions, and reportedly they are going to finally have to actually plead guilty as institutions.

Many have argued that part of the problem was the legal double standard that found law enforcement playing paddy cake with the criminal enterprise that banking has become rather than prosecuting them aggressively from the top down.  If anything was administered more than simple detention, it was from the bottom-up.  The bigger the guy at the top of the bank, the bigger and more obscene the paycheck continued to be.

More proof that bad behavior and thuggery is the norm in banking is emerging in a new study as well.   According to the Andrew Ross Sorkin at The New York Times,

“...about a third of the people who said they made more than $500,000 annually contend that they ‘have witnessed or have firsthand knowledge of wrongdoing in the workplace.’  Just as bad:  ‘Nearly one in five respondents feel financial service professionals must sometimes engage in unethical or illegal activity to be successful in the current financial environment.’”

Such statements take your breath away.  Not only has it not gotten better, it may have gotten worse!   And, the President wonders why Senator Elizabeth Warren is willing to go to the wall on a trade bill that had hardly interested her until she noticed the language leading her to believe that it would allow even more transnational banking criminality?

There oughta be a law, but there probably are plenty of them, just no one seems to care, and the party goes on, and we all pay for it.


The Beermats – A Workers Song


Ending the NLRB’s “Non-Admissions” Policy

no-path-to-justiceToronto   In long established practice when unions prove conclusively that companies have broken the National Labor Relations Act and unjustly discriminated against a worker for union activity through discipline or termination, and there is a settlement, the company signs a “non-admissions” statement, saying that they are not admitting guilt even though they are promising not to do evil in the future or are reinstating the worker to her job.  Having experienced this scores of times, it is often a hollow victory, since the company within days will be maintaining to workers that in essence they had their fingers crossed and were really innocent but settled just to save money and get the union off their backs.

In response to the fact that federal judges have been increasingly critical of the Securities Exchange Commission policy of letting big companies off with this kind of hand slap, the new Chair of the SEC, Mary Jo White, seems to finally be backing away from non-admissions.  According to reports of a memo to enforcement staff of the SEC:

In a departure from long-established practice, the recently confirmed chairwoman of the Securities and Exchange Commission, Mary Jo White, said this week that defendants would no longer be allowed to settle some cases while “neither admitting nor denying” wrongdoing. “In the interest of public accountability, you need admissions” in some cases, Ms. White told me. “Defendants are going to have to own up to their conduct on the public record,” she said. “This will help with deterrence, and it’s a matter of strengthening our hand in terms of enforcement.”

Seems like common sense doesn’t it?   Why shouldn’t this kind of policy shift for exactly the same reasons be true in other federal enforcement agencies, like the NLRB for workers’ rights?  God knows we need more public accountability and companies that are discriminating against the rights of workers under the law should have to “own up to their conduct” in those situations as well.

The flood tide of lawyers overwhelming governmental bureaucracies has had the effect of too often drowning out the rights and entitlements of citizens, whether workers or investors or whatever, simply because big companies can always threaten to stall, obfuscate, and run up the costs for everyone with their “justice delayed is justice denied” standard operating procedures.  The NLRB, the EEOC, the SEC, and a host of others need to start suiting up for citizen and workers’ rights and making sure that when the big boys do wrong they are required to fess up, rather than whitewash the matter and return the next day to “business as usual.”  The non-admissions clause in settlements should become a distant, painful memory, not an ever present part of government action and play-pretend enforcement agencies.