Posted on 11/07/2014 11:02:15 AM PST by Lorianne
Fleischmann is the central witness in one of the biggest cases of white-collar crime in American history, possessing secrets that JPMorgan Chase CEO Jamie Dimon late last year paid $9 billion (not $13 billion as regularly reported – more on that later) to keep the public from hearing.
Back in 2006, as a deal manager at the gigantic bank, Fleischmann first witnessed, then tried to stop, what she describes as "massive criminal securities fraud" in the bank's mortgage operations.
Six years after the crisis that cratered the global economy, it's not exactly news that the country's biggest banks stole on a grand scale. That's why the more important part of Fleischmann's story is in the pains Chase and the Justice Department took to silence her.
She was blocked at every turn: by asleep-on-the-job regulators like the Securities and Exchange Commission, by a court system that allowed Chase to use its billions to bury her evidence, and, finally, by officials like outgoing Attorney General Eric Holder, the chief architect of the crazily elaborate government policy of surrender, secrecy and cover-up. "Every time I had a chance to talk, something always got in the way," Fleischmann says.
This past year she watched as Holder's Justice Department struck a series of historic settlement deals with Chase, Citigroup and Bank of America. The root bargain in these deals was cash for secrecy. The banks paid big fines, without trials or even judges – only secret negotiations that typically ended with the public shown nothing but vague, quasi-official papers called "statements of facts," which were conveniently devoid of anything like actual facts.
(Excerpt) Read more at rollingstone.com ...
We mostly don’t want to hear about idiots borrowing money that they couldn’t pay back.
Let me ask you this. If you haven’t been taken to court and forced to do this, and yet you have seen other banks or lending institutions taken to court, are you necessarily an evil player if you pursue business according to the court’s demand in other jurisdictions?
To you and I, yes. But by the letter of the law, these were not evil players. According to the law they simply played the game the courts demanded ‘some companies’ play.
While I respect you for not participating in this sort of business, how can I trash a company that did when the courts ruled against companies that refused to?
I could say it was evil, and be right as could be. None the less, this is what the courts had deemed ‘must comply’.
In essence, you were lucky not to have been taken to court and forced to have to give out some of these loans.
Isn’t that true?
So are you saying it was fraud but fraud on such a big scale that we should just ignore it? I’m just trying to be clear on what you just posted.
I’m saying that if the courts ruled against these institutions and forced them to make these loans, I’m having a hard time jumping on board the prosecution gravy train.
The regulators were there every step of the way. Why aren’t they being investigated? They signed off. The courts signed off. Congress signed off.
If a banker clearly committed a criminal act, then fine. I’m not here to defend criminality. I just don’t think this whole crisis was created by criminal acts. I don’t consider complying with the edicts of courts or the demands of Congress to be a criminal act.
” how can I trash a company that did when the courts ruled against companies that refused to?”
They were only required to write a small percentage of sub-prime. Not 50% or 80%. And they were writing loans they knew would go into foreclosure soon .
” None the less, this is what the courts had deemed ‘must comply’.”
Again, only 5%, not 50-80% sub prime. But you are right that the left wing Democrats concocted, and forced this on the banks. Bush tried to stop it, then embraced it. Another reason to despise Bush.
“In essence, you were lucky not to have been taken to court and forced to have to give out some of these loans.”
I was a broker, not a direct lender, so I was not under a federal bank charter.
OK but what about what happened to the loans after they were made? The loan originators in most cases didn’t hang onto them.
Okay, and those are good points.
I hate to beat a dead horse, but it seems you are saying the banks were required to only loan out up to 5% of their loans as sub-prime.
What the courts forgot, and Congress forgot, and the Leftists forgot, is that if you demand up to 5%, you’ve just ruled that 100% is okay by law. These loans were deemed reasoned, and they didn’t set an upper level limit. To do so would reveal that those loans were bad loans to begin with. That’s something the courts refused to accept. Congress refused to accept it also.
So the fact is, and I’m not trying to be argumentative here, these entities opened the barn door wide to anyone who wanted to peruse sub-prime mortgages up to whatever amount they wanted.
The courts had ruled the loans to be justified. Now they want to say they weren’t? Hmmmm...
Okay, they sold the paper. Isn’t that an option with loans?
I believe I have read this was a new ‘animal’ but was it? Do banks and lending institutions sell paper to other institutions on a regular basis?
Perhaps it’s the paper bundled to Wall Street that caused the most problems. I can’t honestly imagine the banking and lending industry being able to bundle and sell this paper to Wall Street firms without some government agency having to sign off on it.
If they could, that’s amazing.
” OK but what about what happened to the loans after they were made? The loan originators in most cases didn’t hang onto them.”
They didn’t hang onto ANY of them. If they “warehoused” the loans, they would have gone under. They sold these worthless mortgages to Wall Street, who then securitized them, and sold them to unsuspecting pension funds, and big investors (insurance companies) . The regulators looked the other way, so they were complicit in all of this.
The biggest crook was Goldman Sachs, who sold billions of worthless paper to big companies, and then SHORTED the stocks of the very companies they has sold the worthless paper to. They should have gone to jail, but GS gave millions to Obama, so Holder never touched them.
BTW, I couldn’t agree more when it comes to Bush. If he couldn’t prevail, he at least could have made such a massive racket about it, so that when this did hit the fan, the Democrats would have been caught red-handed.
Instead ‘Conservatism’ took a direct hit, as if this was a problem causes by Conservatives.
IMO, this more than anything else resulted in Obama becoming president.
There are a lot of dead bankers now.
http://www.nachumlist.com/deadpool.htm
Also, there’s the case of the Sr. Exec at CNBC, whose children and nanny were killed the very day the story broke about the $13 T missing from the US Treasury and the suit on getting it back.
Seems to me that certain people are working to cover up their tracks. Some of those in the US Congress and 0bama Administration.
The story that struck me the most when the bank crash hit was about the man in Britain who stepped off a railroad station area into an oncoming train.
See post 30.
” Instead ‘Conservatism’ took a direct hit, as if this was a problem causes by Conservatives.
IMO, this more than anything else resulted in Obama becoming president.”
It sure did.
Exactly. But what do people like doughty one think of this is what I’m asking. Should we just pretend it all didn’t happen just so we can say we are “pro-business”?
OK so are you saying that if the government “signed off on it” that it should all now just be ignored? We shouldn’t look at things too closely now?
” But what do people like doughty one think of this is what I’m asking. Should we just pretend it all didn’t happen just so we can say we are “pro-business”?”
Doughty One isn’t saying that. To be fair, I know more about this than just about anyone here, because it was my profession. By the way, half of these big bankers are Democrats. Goldman Sachs even more than 50%.I am 100% pro business, and 95% of D.C. Democrats, try to destroy business.
Your Goldman Sachs comments are reasoned. Another-words I can follow your logic trail. Goldman Sachs did what you said. Here’s were I come up with a different interpretation, perhaps more accurately ‘conclusion’.
If Congress an the Courts come up with legislation and force lending institutions to give out bad loans, it is their responsibility to make sure corrective measures are put in place to confront the worst of the ‘side-effects’. Neither did.
As you mentioned, banks and lending institutions had to move that bad paper or go under. Wall Street entities who participated in this market, were merely facilitating the disbursal of this bad paper. Congress and the courts were responsible for the existence of it. The regulators were responsible for reviewing and approving or objecting to business practices.
If a business climate is set up to create this mess, it is the business community that is tasked with dissipating the risk at each level.
You state that Goldman Sachs was the biggest crook, but what else did folks expect? Someone was going to buy that paper, move it along, and reap profits from it.
As for Goldman Sachs buying the stock of companies short who purchased the bundled paper, it was entirely legal for them to do so.
There is probably a clause in the securities industry that states a person cannot knowingly sell a harmful product, but the federal government itself had ruled that the creation of the paper was reasoned in the first place.
If the federal government has signed off on the creation of the paper, then it’s a very hard sell for me to think manipulating that paper should be viewed as a criminal act.
This was the Left’s concept of trickle down from start to finish.
Then when it played out, everyone was guilty but them. Isn’t that true in any Leftist enterprise.
Now, didn’t we all know this was a terrible idea? Yes we did. We objected. The lending industry objected. Congress and the courts over-ruled us.
Sorry, I’m not buying into the demonetization of Goldman Sachs. I’m not saying this as a put-down to anyone either.
This is a messy situation. I just don’t like seeing Congress and the courts trash others for what it instigated. And that’s exactly what took place here. There was a fraud alright. Congress and the courts perpetrated it on the lending industry and their down-stream business partners.
If someone wants to prosecute, for once I’d like to see the idiot who caused all this go to jail.
It isn’t Goldman Sachs IMO. I may be wrong as I can be, but I’m tired of seeing malfeasance at top levels of government and the courts get shifted off onto others over and over.
I know, but not a word about those who just outright steal it. To me something is wrong with a system where as a a guy that robs a liqueur store for a $100.00 serves more time than a banker who steal $1,000,000.00, but I am beginning to think that’s just a few of feel that way anymore.
Not really. As I asked later on though, what really caused this, and who is really at fault?
Were industry insiders the real culprits for complying with the government and courts demands?
I’ll defer to comments I already made rather than repeat.
I do think there is anger to be had here, but man am I sick of watching the government feign abhorrence, when they know darn well where this problem originated from.
IMO, the industry that complies with all government rules before the melt-down, is not the cause of the problem.
The rules were the problem, and we all know who created them.
Barney Frank (head of the banking committee), other Leftists, the courts... Even Republicans for not objecting loudly...
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