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HomeLibor Scandal Update: UBS GUILTY of FRAUD!!!
Posted by Larry Doyle on December 19th, 2012 6:54 AM |
GUILTY!!
Why would anybody want to do business with an institution that systematically participated in a widespread fraud over a period of years? I guess that very statement could likely be said of many global banks in regard to the scandal encompassing the manipulation of Libor.
Today, though, the scarlet letter is applied to the Union Bank of Switzerland as it pleads guilty to fraud in the manipulation of Libor and other benchmark interest rates. This bucket shop has agreed to pay a $1.5 billion fine. (more…)
Barack and Mitt: America’s Unfinished Business
Posted by Larry Doyle on September 6th, 2012 1:08 PM |
Should we even have to remind them?
Do the crowds on both sides of the political aisle think Americans are this naive? Well, actually, on that note, the pols from both sides are right. Many Americans remain exceptionally naive regarding far too many issues, financial and otherwise.
The media is clearly of little help in exposing the ugly underside of the Wall Street – Washington conspiracy. That said, many Americans are now far savvier than they were a few short years ago when it comes to appreciating the rackets being run by BOTH political parties, their cronies on Wall Street, and the puppets ensconced within too many of our regulators. (more…)
Did Hawaii Purchase ARS from FINRA through Citi?
Posted by Larry Doyle on March 4th, 2010 7:29 AM |
The auction-rate securities market did not instantaneously freeze in early 2008. The fact is, the ARS market started to fail in mid-2007 on the heels of a variety of market segments repricing given the liquidity issues on Wall Street. Recall that mortgage hedge funds at Bear Stearns cratered in spring 2007. At that point, Wall Street was becoming much more risk averse while shepherding the use of its own capital and balance sheets. During this point in time, the ARS market started to fail and ultimately totally froze in early 2008.
Evidence is rampant that Wall Street worked feverishly from mid-2007 until early 2008 to offload auction-rate securities anywhere and everywhere without informing investors of the failing nature of the market. (more…)
Madoff Investors Suing SIPC
Posted by Larry Doyle on February 24th, 2010 2:39 PM |
You can rest assured that the powers that be on Wall Street would just as soon have the Madoff saga over. The Madoff scam perpetrated on investors is an ugly reminder of the non-existent financial regulatory system during the better part of the last twenty years.
I also believe many in Washington also might like to see the Madoff saga quietly pass by. The failures of the SEC, FINRA, and SIPC in this greatest of scams are an ugly reminder of the Wall Street-Washington incest.
Well, while many of the incestuous partners would like to turn the page, there remains a lot of filth that still needs to be cleaned up and a lot of individuals and institutions that need to be held to account. (more…)
Mortgage Fraud Deserves Jail Time
Posted by Larry Doyle on November 3rd, 2009 10:34 AM |
Fraudulent actions must have consequences.
How is it that with trillions in financial losses and a variety of financial frauds readily apparent, very few individuals have been held accountable? FL, a loyal reader of Sense on Cents, has banged this drum repeatedly.
Why hasn’t this fraud been more aggressively combated? The influence of the banking lobby, primarily over the federal regulatory oversight of the financial industry.
What a shame. Are there some new sheriffs, those being state attorneys general, getting ready to ride into this mess? It would appear they are. I immediately thought of our friend FL upon reading The New York Times report, States Are Pondering Fraud Suits Against Banks.
The banking industry at large has worked in concert with its lobbyists and trade associations to keep regulators and law enforcement at bay. At the federal level, the banks have largely been successful. That success begs the question as to how deeply embedded the lobbyists are in the regulatory community. (more…)
Real-Time Information Is “Everything” on Wall Street
Posted by Larry Doyle on October 7th, 2009 3:45 PM |
One of the overriding reasons why I left First Boston in 1990 to join Bear Stearns was Bear’s advanced real-time risk management system. This system allowed me the ability to more proactively manage my trading risk. In the process, I was able to take more risk in the pursuit of greater profit. I became familiar with Bear’s system during the recruiting and interviewing process and was flabbergasted to realize how far behind First Boston was in its capabilities.
Real-time risk management and real-time data processing are critically important for thorough and proper oversight of any financial enterprise. A regulator will be lost in an attempt to maintain market oversight without the proper systems and access to real-time data.
Having heard and read of the systems deficiencies at both the SEC and FINRA, I am concerned at how far behind the curve these regulators are right now and how long it will take for them to recover.
While pondering this topic, I read in Securities Industry News that the SEC is looking to capture real-time data on derivatives transactions. This commentary, SEC Wants to Gather Real-Time Data on Swaps, addresses the exact topic I broached on July 17th in writing, “Can We ‘TRACE’ JP Morgan’s Business?” I wrote:
There is little to no transparency in the world of customized derivatives and as a result the bid-ask spreads are very wide. Cha-ching, cha-ching. Jamie (Dimon) and his friends on Wall Street are working extremely hard to keep it this way.
In their defense, it is likely not functionally feasible to move many customized derivatives to an exchange. What should regulators compel them to do? JP Morgan and every other financial firm on Wall Street should have to report every derivatives transaction to a system known as TRACE, which stands for Trade Reporting and Compliance Engine. This system currently only covers transactions within the cash markets and not derivatives. What does that mean for investors? No transparency and price discovery for investors in the customized derivatives space. As such, Jamie and friends can keep those bid-ask spreads nice and wide and ring up huge profits in the process.
Securities Industry News writes:
The Securities and Exchange Commission told Congress today to grant regulators “direct access to real-time data” on credit default swaps (CDS) and other derivatives.
The request comes, the agency said, because the lack of such information hampered its efforts to investigate potential fraud and market manipulation in the over-the-counter (OTC) derivatives markets during last fall’s financial crisis.
The SEC’s enforcement actions in investigating market manipulation in OTC derivatives “were seriously complicated by the lack of a mechanism for promptly obtaining critical information – who traded, how much, and when – that is complete and accurate,” said Henry Hu, the director of the SEC’s new division of risk, strategy and financial innovation, in written testimony to the House Financial Services Committee.
Hu testified that “data on securities-related OTC derivative transactions were not readily available, and needed to be reconstructed manually.” He asked Congress to expand the SEC’s inspection authority over trade data repositories and clearinghouses for derivatives.
The comments represented a rebuke to industry efforts aimed thus far at making more information on CDS and other OTC derivatives data more readily available.
What do we learn here? Information is EVERYTHING!! Wall Street is fighting tooth and nail to protect its golden goose within the derivatives space by hoarding this information.
Why is the SEC even asking for the information? If anybody in Washington truly had a set of cojones, they would merely TELL Wall Street how it is going to work going forward . . . take the information, and fulfill their responsibility to protect the public interest.
LD
