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Fraud*
According to the Collins English Dictionary 10th Edition fraud can be defined as: "deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage".[1] In the broadest sense, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation. Defrauding people or entities of money or valuables is a common purpose of fraud, but there have also been fraudulent "discoveries", e.g. in science, to gain prestige rather than immediate monetary gain
*As defined in Wikipedia

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Saturday, May 12, 2012

Goldman Sachs: Nonpareil Lobbyist

Matt Taibbi of RollingStone has looked at the process of creating the rules and regulations that will accomplish the reform of the financial system, reform made necessary by the financial meltdown of 2008.  He describes the attempts to defeat meaningful reform under five steps.

The steps that Matt described are listed below and followed with one observation by us:

"Step 1:  Strangle It in the Womb"
Obama never intended to pursue prosecutions of those who the committed fraud and helped bring down the  financial system.

"Step 2:  Sue, Sue, Sue"
When regulators seemed poised to pursue and prosecute the fraudulent activities of the banks, they were sometimes sued for such things as "cost-benefit analysis" before implementing the new rules.

"Step 3:  If You Can't Win, Stall"
The rules for regulating the financial system are often delayed; for example, the CFTC was supposed to implement rules on position limits by January17, 2011.  A new date was set for September 2011, but in 2012, the CFTC was in court facing a lawsuit designed to kill the bill.  (Gary Gensler is a former Goldman Sachs guy.)

"Step 4:  Bully the Regulators"
Through control of funding from Congress, the regulators have to work with threats to their budget where cuts would make their work more difficult to carry out. 

"Step 5:  Pass a Gazillion Loopholes"
Republicans have passed numerous individual laws that are designed to undercut the regulations of the CFTC and the SEC.  It is as though the lobbyists are making the new rules to suit their own specifications.

The pursuit of a completely unregulated market system continues to evolve with the complicity of the White House and the Congress to the detriment of the community of citizens. 
How Wall Street Killed Financial Reform
It's bad enough that the banks strangled the Dodd-Frank law.  Even worse is the way they did it--with a big assist from Congress and the White House
By Matt Taibbi - RollingStone
. . . .

STEP 3: IF YOU CAN'T WIN, STALL

You might think otherwise, but it doesn't naturally follow that because a law has been passed by Congress and signed by the president, said law actually has to be implemented. With Dodd-Frank, the SEC took a brilliant approach to submarining one of its own regulations. The agency was supposed to begin enforcing the new proxy access rule by late 2010. Instead, in October 2010, it granted speculators a last-minute stay – essentially giving the Chamber of Commerce time to prepare its lawsuit to permanently kill the rule.

Position limits are another example. Dodd-Frank ordered the CFTC to begin enforcing the new rule no later than January 17th, 2011. But January 17th came and went, and – no position limits! Gary Gensler, the head of the CFTC and a former executive of Goldman Sachs, then announced that he hoped to implement the rule by September 2011. But September came and went, and soon it was 2012, and before you knew it, the CFTC, like the SEC, was in court, facing a lawsuit that would permanently kill the rule.

Even the president got into the stalling game. . . .
Read the whole article here



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