Masters of the Universe category archive

Cuomo sues the some of the three-card monte dealers on Wall Street, in this case, Ernst and Young for helping Lehman hide its debt.

Bloomberg:

“This practice was a house-of-cards business model designed to hide billions in liabilities in the years before Lehman collapsed,” Cuomo said today in one of his last cases as attorney general. “Just as troubling, a global accounting firm, tasked with auditing Lehman’s financial statements, helped hide this crucial information from the investing public.”

The state seeks to recover more than $150 million in fees collected by Ernst & Young for work performed for Lehman from 2001 to 2008, plus investor damages and equitable relief, Cuomo said.

See “Flies, Dropping Like”:

Community National Bank, Lino Lakes, Minnesota

First Southern Bank, Batesville, Arkansas

United Americas Bank, National Association, Atlanta, Georgia

Appalachian Community Bank, F.S.B., McCaysville, Georgia

Chestatee State Bank, Dawsonville, Georgia

The Bank of Miami, National Association, Miami, Florida

And the FDIC hasn’t gotten to the west coast yet.

Feels like someone’s hand.

Glomarization reports.

Is free checking on the way out? McClatchy reports:

A lengthy recession, an extended period of low interest rates, new and costly regulations, and the effect of two years of bank and credit union failures mean the idea of free banking services such as free checking likely is going the way of the free toaster.

The loss of free checking means that unlike in the recent past, more customers will have to maintain minimum balances, agree to write only so many checks a month, or receive their monthly statements electronically to avoiding paying monthly fees on their checking accounts.

If I recall correctly, when I got my first checking account, it came with a $.10 per check fee. Later on, I moved to a bank with an “average minimum balance” account.

I don’t particularly like fees, but I’d rather see them than the kind of under-handed games that banks were playing to run up overdraft and other penalty fees.

I would much rather knowingly pay for a service I’m using than have my pocket picked.

Irish bonus babies:

“The relevant staff were individually called to an unexpected meetings with senior managements on 29 January, 2009 – two months before they would normally have been informed of their bonuses.

“They were told that the bonus for 2008 was being brought forward and would be paid out on 25 February – two months before the normal date.

“The staff were explicitly told that the meeting they were then having constituted a verbal contract which was legally binding.

“In other words, senior managers at the bank created a legal obligation to pay the bonuses in AIB as it was effectively being nationalised. Staff were told to keep all of this to themselves.”

Follow the link for more Wasserman.

The “underwater housing price” problem is coming under control:

The number of U.S. homes worth less than the debt owed on them dropped in the third quarter, largely because of mounting foreclosures rather than a rise in property values, according to CoreLogic Inc.

About 10.8 million homes, or 22.5 percent of those with mortgages, were “underwater” as of Sept. 30, the Santa Ana, California-based real estate information company said in a report today. That was down from 11 million, or 23 percent, at the end of June, the third straight quarterly decline.

In other news, brisk trading in homeless shelter futures.

From the New York Times:

On the third Wednesday of every month, the nine members of an elite Wall Street society gather in Midtown Manhattan.

(snip)

In theory, this group exists to safeguard the integrity of the multitrillion-dollar market. In practice, it also defends the dominance of the big banks.

In other recent discoveries, water is wet and salt is salty.

A little time out to recognize the two pilars of fiscal integrity that vanished over night. These banks are now blanks:

Earthstar Bank, Southampton, Pennsylvania

Paramount Bank, Farmington Hills, Michigan

They were too small to be bailed.

Details here.

Heh.

Michael W Kraus, of the University of California, San Francisco, is one of a number of social psychologists who have recently been busy demonstrating that lower socioeconomic status (SES) is intricately linked to all sorts of prosocial behaviours. Everything else equal, the less wealth, education and employment status we have, the more charitable, generous, trusting and helpful we appear to become. In interactions with strangers, poorer people are more likely to use polite, attentive, respectful gestures. Most recently, in a paper just published in the prestigious journal Psychological Science, Kraus et al report that lower SES subjects show significantly greater empathy than their richer, better educated counterparts. He argues that this tendency to empathise may at least partly explain the other observations of prosocial behaviour.

McClatchy:

Bank of America has agreed to a sweeping $137 million settlement with state and federal authorities to resolve its role in an alleged bid-rigging scheme that has been under investigation since 2006.

The settlement is the end result of a February 2007 leniency agreement the Charlotte bank reached with the Department of Justice, which spared it from criminal investigation in return for its cooperation. Bank of America is paying restitution but no fines, as authorities continue to investigate other major financial institutions.

In this week’s Le Show, Harry Shearer interview an economist, author of the Naked Capitalism blog, on how the mortgage mess turned into the foreclosure based economy and why banks’ flawed titles to properties is more than a few paperwork errors.

It was, instead, part of the M. O. of the banksters.

Listen to the show, but not while you’re eating.

The right hand is blaming the left hand, but looks as if both hands were in the pot. Your American business community: a pillow of integrity.

The U.S. Commodity Futures Trading Commission has referred forged comment letters it received on a proposed derivatives trading rule to the Justice Department, CFTC chairman Gary Gensler said today.

A Boston-based public relations firm, the Dewey Square Group, confirmed yesterday that it had been hired to send comment letters to regulators on behalf of a client it wouldn’t identify. The firm said it didn’t know that the letters were fraudulent and blamed a subcontractor, Little Rock, Arkansas- based Goggans Inc.

The letters were sent over the signatures of real businesses, who denied sending them.

This case seems to involve a clash between the Computer Fraud and Abuse Act and lawyer-client privilege.

The FDIC claims that the documents were illegally removed from the premises of the banks in question; the lawyers claim they ain’t talking. My intense study of Law and Order reruns leads me to think that, if the documents should not have been removed from the premises of the business in the first place, privilege does not apply.

I certainly know where my sympathies lie.

The FDIC seeks the return of files and records that officers and directors at the five financial institutions copied and gave to private lawyers before their banks collapsed, according to documents in two cases filed in federal court in Atlanta.

The FDIC is also preparing to file negligence and fraud suits against executives of failed banks. The FDIC board has authorized civil suits against more than 80 officers and directors of failed banks, while the bank regulator and the FBI are cooperating on about 50 cases of possible criminal violations involving former and current bank employees and customers.

While I was enjoying my hydrocodone last night, the FDIC honored more of our financial community for their integrity and diligence by shutting down their financial instituations.

You can bank no more on these clowns:

First Banking Center, Burlington, Wisconsion

Allegiance Bank of North America, Bala Cynwyd, Pennsylvania

Gulf State Community Bank, Carrabelle, Florida

Aside:

I used to live just a couple of miles from Bala Cynwd just off Montgomery Ave. and I know how to pronounce the town’s name.

This week’s crew of ex-banks is starting to assemble:

Darby Bank & Trust Co., Vidalia, Georgia

Tifton Banking Company, Tifton, Georgia

If it’s not one not-bank, it’s another:

Copper Star Bank, Scottsdale, Arizona