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Merrill Lynch Lawyer Told Eliot Spitzer: “Be Careful, We Have Powerful Friends”

Posted by Larry Doyle on April 18, 2011 8:29 AM |

Is the need to repair the health of our financial system SO GREAT, that we should be willing to allow the basic rights of individuals and the laws of our land to be trampled and violated in the process? In my opinion, this very question is central to the rage that burns in so many hearts across our great land.

Bailing out banks may be anathema to those who love and cherish capitalism BUT not pursuing justice and real accountability for the transgressions of those individuals and those institutions central to our crisis is sickening. I believe it is inherently un-American to allow these transgressions to pass without proper prosecution. Which transgressions?
The question of fraud in the mortgage origination and securitization business. The question of violating property rights in the handling of auction-rate securities and other credit situations (e.g. Chrysler creditors). The question of abusing the basic rights of homeowners in the mortgage foreclosure process.

Specifically due to the abuses within the foreclosure process, I recently questioned, Did Wall Street Violate the Racketeering Act?

Is there any doubt that the financial services industry has become ever more brazen in its pursuit of profit and opportunity because it knows its’ backside is covered by those in Washington? I have no doubt. When will Washington break with Wall Street and truly represent the people’s interests? When will the senior leadership on Wall Street (Goldman’s Lloyd Blankfein, JP Morgan’s Jamie Dimon, Citi’s Vikram Pandit, Bank of America’s Brian Moynihan, Morgan Stanley’s James Gorman) display real leadership and acknowledge that the questionable actions and transgressions are not merely about the impact on this quarter’s earnings but go to who we are as a nation? Basic principles of fairness and integrity are cornerstones of the American foundation.

I wish I could say I was optimistic that senior leadership on Wall Street and in Washington actually ‘get this’ and appreciate the pain and anguish embodied by so many in our nation today. I really do not think they do ‘get it.’ If they did, they would aggressively take on their own and expose the destructive nature of the Wall Street-Washington relationship. It would be a cold day in hell before that happens.

Then who will make the case? Will Attorney General Eric Holder? None other than former New York Governor Eliot Spitzer said the other day that Holder should resign if he does not pursue a case against Goldman Sachs specifically. Let’s not be mistaken, though, a case against Goldman Sachs based upon a report recently released by Senator Carl Levin (D-MI) could easily serve as a benchmark to pursue charges against virtually every bank on Wall Street.

Will Holder pursue this case as Spitzer recommends or will some of Wall Street’s friends in Washington once again intervene under the guise that restoring the health of the industry is actually more important than the pursuit of justice? Let’s take a quick listen to a brief 2-minute clip highlighting Spitzer and Rolling Stone’s Matt Taibbi with CNN’s Anderson Cooper.

“Be Careful, We Have Powerful Friends”

I do believe that at some point in our future when we are paying an even steeper price than we are currently experiencing that we—the nation, Wall Street, and Washington—will ask ourselves how did we ever let these transgressions go unaccounted.

In fact, I believe that S&P’s placing the United States credit rating on negative watch just this morning is an offshoot of the entire crumbling of our financial integrity embedded within the incestuous Wall Street-Washington relationship.

Navigate accordingly.

Larry Doyle

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I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

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