From Inner City Press "HSBC Watch":
December 7, 1999 -- Mid-week flash (full weekly report of 12/6, below)
On December 6, the five Federal Reserve Board Governors voted unanimously to adopt a 37-page order approving HSBC’s take over of Republic New York Corporation. The order contains not a word of the December 3 murder of Republic founder and 29% owner, Edmond Safra. As to the ongoing Princeton notes scandal, the Fed cursorily states, in a footnote, that it “has considered... confidential and supervisory information regarding the charges of securities fraud filed against the owner and founder of Princeton Global Management Limited, a customer of Republic New York Securities Corporation... Neither RNYC or RNYSC has been charged with wrongdoing by any government authority in connection with this matter... the Board has taken account of plans by HSBC to address potential effects that might result from the Princeton matter. The Board is coordinating its review of this matter with the functional regulators of RNYSC and other appropriate law enforcement authorities.” Order, n.20.
For the Fed, the self-proclaimed umbrella regulator, to take such a hands-off approach is more than a little surprising. Republic has been sued for over $100 million by Amada, one of the Japanese company which bought the Princeton notes. While the Fed refers to the “functional regulators of RNYSC,” the Fed just spent months pushing its position in Congress that it should be granted wider regulatory turf.
The Fed’s treatment of Community Reinvestment Act and fair lending matters is similar. Another major issue in the proceeding, the Fed confines to a footnote: “One commenter maintained that the purchase by Republic Bank of mortgage-backed securities issued by Delta [Funding Corporation], which recently reached a settlement with New York State authorities regarding its lending practices, suggests that Republic Bank lacks fair lending compliance safeguards and might constitute a discriminatory lending practice. Republic Bank purchases MBSs issued by Delta on 10 occasions between July 1997 and June 1999. The Board has reviewed Republic Bank’s standards for investing in MBSs and has found nothing to suggest that its decision to invest in particular MBSs are based on any prohibited criteria. Moreover, RNYC has indicated that it was not involved in originating the underlying loans that were securitized. The Board has forwarded a copy of all comments on Delta to the Department of Justice, [HUD] and the [FTC], which have responsibility for reviewing compliance with the fair lending laws by nonbanking companies.” Order, n.44.
The Fed uses an absurdly narrow interpretation of the fair lending laws -- whether Republic intentionally applied discriminatory criteria to buying MBSs. The Fed ignores a decision on just this issue by another Federal regulator, the OTS, on Lehman Brothers’ activities with Delta. And while the Fed tries to tip its hat to a recent GAO study that criticized the Fed’s refusal to coordinate with HUD and the FTC on fair lending, the referral is too limited: the allegations are about Republic Bank, not only Delta.
As to HSBC, the Fed admits (again, in a footnote) that “HSBC’s mortgage originations in LMI and minority census tracts and to African-American and Hispanic applications, as a percentage of its total mortgage lending, are lower relative to the aggregate and relative to the demographics of the markets in which HSBC operates.” Order, n.35. The Fed bumbles on to say that this does not indicate discrimination, because raw lending numbers do not include credit histories. But both HSBC’s actual loans made to, and the applications it receives from, protected classes are below industry aggregates -- credit histories and denial rates have nothing to do with it.
Moments before the Fed announced its approval, the Fed faxed ICP a one page “memo to files,” stating that “[b]etween September 1, 1999, and November 1, 1999, I and other members of the Board staff spoke on various occasions by telephone with representatives of HSBC... HSBC’s counsel inquired on occasion as to what, if any, written information the System might require with respect to allegations of fraud involving Princeton.... HSBC was required to provide information concerning the nature and extent of any potential liability... as well as a discussion of the steps to be taken by HSBC to avoid a recurrence of this situation.”
The Fed’s own Ex Parte rules state that the “System” is not to communicate with either side to a disputed issue without the other side present. While the Fed tries to get around this by memorializing such ex parte contact, to withhold the memo until the date of the Board’s vote is contrary to the Fed’s own rules.
And. . .
The New York Post (Dec. 4) reported that Mr. Safra was only in Monaco to hold meetings with HSBC’s John Bond.
Martin Armstrong denies wrongdoing, and an examination of his treatment shows judicial caprice and vindictiveness. Presiding judge appointed his own former clerk to seize Armstrong's assets in their entirety, leaving him to defend himself from a jail cell, writing the most eloquent briefs in pencil on pad, having been denied the barest essentials of clerical equipment--let alone the documents he needs for his defense.
Said judge has ruled out of pique, denying appeals and withholding a contempt citation which I stipulate is without merit.
The Martin Armstrong Defense Fund provides significant archived information.
Armstrong seems another scapegoat of the Republic octopus, held an incredible 35 months, while Republic Securities paid 600 million--a prima facia admission of its guilt, yet quite content to let blame be deflected to its neutralized scapegoat.
Stephen Toth, former manager of Monaco Republic, now held on one more extorted false confession, deniable culprit for missing funds in that hallowed institution.
Now Lily entertains Prince Charles from her palatial London digs, having profited handsomely from the sale of Edmond's Republic to Sir John Bond of HSBC headquartered in London--said sale approved Monday December 6, 1999, the first business day following Edmond's convenient death.
Nothing stops the inquiry like the death of the only witness to the facts.
To Monaco:
Your 'Grace',.....where is your 'grace'?
Merry CHRISTmas?
Three Years.....(Rm # 101).....Three Years!........Enough is enough!
Bump for Ted Maher to be freely and graciously returned in health and safety to his loving family and country.
......In Jesus' Precious Name, Amen.
Merry Christmas?