Headline June 29, 2014

"' ! DEATH ! TO THE BIG BANKS ?! *"'


The stark truth and the very simple argument is that : "If companies cannot be sent to the penitentiary-
They can face death penalty.

Why the hell not?!  And all this is   -if anything, some brilliant work from Floyd Norris.

Under the law   -including a provision of the  Dodd-Frank financial overhaul law adopted in  2010   -Jefferies would have automatically been barred from the underwriting private offerings 

Of securities under S.E.C registrations that allow companies to issue securities without making disclosures that would otherwise be required.

On the same day, March 12, a lawyer for Jefferies sent a letter to the commissioner asking for waivers. Failing to grant them,  the lawyer said, would:

''Have an adverse effect on third parties."

And who were those  innocent   third parties?  They were companies ''that were retained, or may retain in the future,"  Jefferies to underwrite such deals'

If that is enough to justify a waiver from the rules,  it is hard to imagine an investment bank  that is not eligible for one. There was no claim that any clients or potential clients would be unable to find other underwriters.

On March 12,  an S.E.C.  official granted one waiver to Jefferies. The full commission voted to grant another.

Until last month,  no one involved in the waiver machine had ever complained publicly about it.

Then Kara Stein,  an S.E.C. commissioner appointed last year, issued a stinging objection to a waiver her colleagues granted to the Royal Bank of Scotland.

The bank had signed a  prosecution agreement and had paid a $100 million fine after bank after bank officials were accused of conspiring to fix the London inter bank offered rate, or Libor.

Ms Stein noted that some banks had received waiver after waiver. ~One large financial firm alone, in a 10-year period, has received over  22 different waivers,'' she said:

''Often making the argument that it has a  ''strong record of compliance with federal securities laws.''

She did not name the firm,  but other officials identified it as JPMorgan Chase.    
If, or when, Credit Suisse  and  BNP enter guilt pleas,  -you can bet that the S.E.C. will swing into action with    waivers.

Which brings us back to the original question.  Does it matter that these will be criminal,    not civil,   punishments?

Maybe it does,  even if the fines are no larger than they would have been in a civil case. A criminal record might hurt if either bank gets into trouble again. Some customers might react-

By moving business to institutions that are not convicted felons.

And there is the fact the banks have tried hard to avoid having to make criminal pleas.

They apparently think it matters

With respectful dedication to the Students, Professors and Teachers of the world- See Ya all on !WOW!  -the World Students Society Computers-Internet-Wireless:

"' Knowledge By Acquaintance "'

Good night and God bless!

SAM Daily Times - The Voice of the Voiceless


Post a Comment

Grace A Comment!