Sunday, 11 December 2011

Bankers Made Off, Politicians Cream Off, Businesses Rake Off. Quis Custodiet Ipsos Custodes?

When banks, governments, organisations and individuals veer to psychopathic, Machiavellian misanthropic behaviours, who exists to protect the 99% from the antisocial rampages of the 1%?

The magnificently named Jed Rakoff is one such man.
Rakoff is the New York District Judge who has thrown out of court the ludicrous accommodation between Citigroup (an over-sized too-big-to-fail bank) and the Securities and Exchange Commission (SEC), the regulatory body.
Citigroup and the SEC had reached an out-of-court arrangement of $285 million settlement over a range of criminalities by the bank with the usual proviso that the financial organisation refuses to accept any responsibility for the crimes in lieu of the hush money/ plea bargain.

This is not justice as nothing prevents Citigroup from behaving in exactly the same manner again and the behind-closed-doors agreement disarms disgruntled investors ripped off by the bank.

And ripped off they were...
... Citigroup established a fund that was deliberately designed to fail, in the style of Goldman Sachs.
Citigroup persuaded clients to invest in this fund while the internal traders at the bank were taking on this mug money for profit.
Investors lost not far short of a billion dollars while Citigroup pocketed $160 million (meaning that the fine, in reality, was just $125 million).
This places Citigroup in violation of the provisions of the 1933 Securities Act.

But Rakoff claims further that the bank undertook deliberate deception and fraud which opens the route to civil litigation.
As The Economist states: "The absence of the [civil litigation] charge in the Citi complaint makes some wonder if the scope of charges is inversely proportional to the size of defendant."

And the SEC are sharing a king-sized double with the politicians in Congress too.
Members of the House have recently been exposed by CBS of trading on inside information for proprietary gain.
Such politicians have been shown to outperform the market by fully 12%!

The Economist: "It is remarkable, though, that congressmen's investments have been so laxly supervised... They are able to trade freely, even if they find out before anyone else about regulations or events that could affect specific industries or the stockmarket as a whole."

Of course, we cannot expect that the SEC should do its job as it is directly funded by Congress and any decent SEC analyst is head-hunted by the very financial institutions that are being forensically evaluated.

Still the doublespeak criminalities of the abusers are the most revealing.
Spencer Bachus is the House Financial Service Committee chairperson.
CBS accused Bachus of benefitting from financial inside information.
And the Bachus response: "It is absolutely essential that we do restore the public's trust."

William Burroughs: "To speak is to lie/ to live is to collaborate."

Corinne Maier: "Chief executives should be guillotined to the sound of 'La Carmagnole'."