The Wall Street Bank Conspiracy: "The whole investment process was rigged"

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Wow.

Years of collusion, massive taxpayer rip-off... another day, another scandalpalooza, another reason to be astounded that the GOP still insists on siding with Wall Street:

The secret conversation was part of a conspiracy stretching across the U.S. by Wall Street banks in the $2.8 trillion municipal bond market. [...]

West Virginia was just one stop in a nationwide conspiracy in which financial advisers to municipalities colluded with Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co., Lehman Brothers Holdings Inc., Wachovia Corp. and 11 other banks.

They rigged bids on auctions for so-called guaranteed investment contracts, known as GICs, according to a Justice Department list that was filed in U.S. District Court in Manhattan on March 24 and then put under seal. Those contracts hold tens of billions of taxpayer money.

This little escapade affected states from California to Pennsylvania. There were more than 200 deals, 160 state agencies, local governments and non- profits.

The whole investment process was rigged across the board,” said Charlie Anderson, who retired in 2007 as head of field operations for the Internal Revenue Service’s tax-exempt bond division. “It was so commonplace that people talked about it on the phones of their employers and ignored the fact that they were being recorded.”

My jaw has dropped, my eyes are popping out of my head.  A major conspiracy became so commonplace that those involved were desensitized. Think about that. It's reminiscent of the  occasions when crimes are committed in the streets as passers-by ignore them without stopping to help and continue to go about their business.

This is a long, substantive article, so please go read the whole thing. The scope is mind-boggling:

Court records in the broadest-ever criminal investigation of public finance shed new light on how Wall Street’s biggest banks were cheating cities and towns during the same decade in which they were setting the stage for a global economic collapse.

As the banks were steering the world’s financial system to the brink of catastrophe by loading more than $1 trillion of subprime mortgage loans into opaque debt investments, they were also duping public officials across the U.S.

16 other companies-- 16-- have been cited but not charged:

Eighteen employees at 16 other companies, including units of General Electric Co., UBS AG and FSA, then a unit of Brussels lender Dexia SA, are also cited as co-conspirators by the Justice Department, according to the list under seal. None have been charged in the case.

None have been charged. There have been immunity offers, of course. And there will be hell to pay if the punditiots ever stop talking about beauty pageants and start explaining the details of how America got screwed, and yet "none have been charged."

H/t: Livecut

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  • http://thetoddblog.com/ Todd Curl

    A very thorough and disheartening example of corporate crime run a muck -- pertaining to the entire Bloomberg article. Being the "radical" that I am, I feel it necessary to address some related issues of federal complacency that the article left out. For one, the SEC and FDIC have turned a blind eye to this behavior for years. The deregulation of Wall Street/Banking Industry started by Reagan, then taken to the next level by Clinton and continued with Bush and now Obama, has in essence, made these crimes of this industry the rule, rather than the exception.

    Perhaps prosecution, such as the Enron case, will be forthcoming; but I am quite cynical any real punishment or change will come considering that the institutions involved make up a conglomerate of interests that control much of our nation's wealth -- much of the world's wealth to that end. The SEC knew what was going on for years, though, as always, they decided to turn a blind eye to their industry compatriots (and former employers for that matter).

    I'm sure some fines will be levied against some of the conspirators, but actual change is doubtful in my mind as that would involve a complete overhaul of the agencies that are supposed to be keeping watch for the interests of the public. Perhaps if Obama didn't load up these agencies with the same corporate insiders as all other administrations before him, I might have less cynicism. Honestly, this is just another day in the criminal enterprise known as Banking. Also, these are just the crimes that were blatant enough to make national "mainstream" news and are just a drop in the bucket to the crimes and conspiracies yet to be uncovered.

  • mahialoha

    funny thing, this is pretty much what I was thinking yesterday. financial institutions lost their sense of fair play, honesty, integrity et al all along the road paved with gold. Consumers were so used to hearing "no" when they wanted credit that of course they pounced on the loose-y goose-y loans when they were offered. Now that the financial industry is as leaky as the Titanic and about as sea-worthy, those at the helm continue to practice their same dastardly activities, and lying lying lying ... It is not about whether they are believed or not, it is that they continue to wield the influence that mountains of money can buy in Washington.

  • Huda

    The decline of the free market is a joy ride for the rich and politically connected.

    I would like to share an article with your audience, hopefully to shed light in an incident that shocked me and needs to be exposed more. Anyone who live in the State should contact the appropriate authority in the article:

    MIlwaukee Offers up Mentally Ill Women As Sexual Bait to Soothe Violent Male Inmates-Candidate for Governor Supports!
    http://www.whataboutourdaughters.com/2010/05/mi...