Elizabeth Warren Asks Regulators Why No Trials on Wall Street

Feb. 15, 2013

Elizabeth Warren had her first meeting with US banking regulators five years after the Wall Street derivatives scandal that trashed the global economy.

Warren pointed out that big banks make billions and pay small amounts in settlements or penalties without any court cases. She made the case that regulators have very little leverage when it comes to taking Wall Street to court as a deterrent that is perfectly within the law. 

Warren has the expertise on financial institutions and asked very basic, simple questions which none of the regulators could clearly answer:

“Tell me a little bit about the last few times you’ve taken the biggest financial institutions on Wall Street all the way to a trial?”. 

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Not a very deep or technical question. Not very hard to answer either.

She simple asked for times and dates of when the greatest country in the world, with the biggest assets, that was responsible for the fraudulent selling of junk derivatives (worthless paper) (unsecured mortgage loans) and phony insurance policies on same by the trillions when did the regulators of privately held banking institutions – ever had to step into a courtroom?

The answers were astounding. Not one regulator could claim they took a Wall Street bank or financial institution to court, let alone win a case.

What did Elizabeth Warren prove? She proved a lot. Warren proved that US regulators are chicken, they shiver in fear in the face of Wall Street team of expert lawyers. Yes, they are experts even more expert than the regulators who are supposedly keeping them honest.

She proved that the US government and their regulators are content to get millions in fines and go home at 5 pm. without getting their hands dirty and thinking they did their job.

Mere fines that are laughed at on Wall Street, because they make billions with these fraudulent schemes and only end up paying petty fines. Twenty or 50 million dollar fines are peanuts to these guys, and they are literally laughing at banking regulators.

But the public is not laughing. Five years ago, millions and millions of Americans retirement funds, investments, pensions, life time savings, education funds, bank accounts and stock investments got wiped out in one day. In one day, Americans lost 38 percent of the nation’s wealth and then those same taxpayers had to bail out the crooks that stole the money with fraudulent schemes.

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The problem is there are no deterrents, and no punishment that would prevent Wall Street from exploding the economy again and again. The proof is the JP Morgan indiscriminate derivative scandal of last year.

A few hours in front of a Congressional Hearing, a fine and Jamie Dimon was back in business as CEO at Morgan. It was not funny to the citizens that paid for the bailout. Bad news for Americans expecting any justice for the failure of regulators to make Wall Street accountable.

For five years now, Americans want and still want justice, they want someone to pay the price they paid, they want these crooks in jail cells. It is no accident that only one man sits in a jail cell, Bernie Madoff got jail time.

The last time any Attorney General took on Wall Street was when Eliot Spitzer took AIG to court and that was in 2005, 8 years ago!! Spitzer took on the biggest bank over fraudulent accounting practices where AIG boosted it’s stock prices. Spitzer also went after abusive trading practices in mutual funds and conflicts of interest. He went after the big fish with a zealous appetite and won most of the time and therein lies the rub. For eight years Wall Street had no one to fear, no one trailing them and nailing them which could account for their free for all orgies.

No court room to face, no shame, and not even a media headline, today CEO’s just send checks to the US Attorney General with a “sorry” note. That is the end of it. No publicity, and hardly any coverage of note is shaming them. Therefore, as

Tom Curry, who heads the OCC -Office of the Comptroller of the Currency, a regulator himself said:

“We do not have to bring people to..uh uh…a trial”
“We have not had to do it in as a practical manner to achieve our supervisory goals”.

Not have to do it?

(Note: The big banks pay the penalties they do not have to admit guilt either admit or deny they broke the law! It is a system of an easy and clean getaway which are normal for any messy legal problems of the Wall Street banks.)

The Hon. Elisse Walter a member of the SEC – Securities and Exchange Commission said this:

“As you know among our remedies are penalties, but the penalties we can get are limited and we have actually asked for additional authority my predecessor did to raise penalties.”
I’ll will have to get back to you with specific information” and again the SEC had not taken anyone to trial.

Elizabeth Warren noted and reminded regulators that you realize that everyday lawmakers take ordinary citizens on very thin ground and taking them to trial in order to make them an example.

True enough when the government goes after ordinary Americans they use the full force of the law, however they are proven to be too soft on the big banks. She also mentioned that Wall Street banks are trading below book value, and that most big corporations trade well above book value.

But many of the Wall Street banks are trading at below book value either because the banks books are honest or large banks are too complex for regulators to manage them. She asked for reassurance that regulators can give to prove these banks are adequately managed.

Some in the media called it “shameless grandstanding” and scolded Warren for being “too hard on regulators”. Too harsh after five years after the biggest fraud on a global financial system and finally someone asked the questions “what has been done?” to enforce and hold Wall Street accountable.

Senator Elizabeth Warren was sent to Washington to kick ass, and today she just got warmed up. We all know very well that as she said Wall Street is:

“I’m really concerned that ‘too big to fail’ has become “too big for trial”.

As hard as lobbyists for Wall Street banks attempted to keep Elizabeth Warren off the banking committee, they failed to do so. These groups also failed to stop her from winning the state of Massachusetts as a Senator, pouring gobs of money into her opponent Scott Brown’s campaign coffers. He lost his senate seat by a big seven points.

The people of America are tired of seeing these CEO’s enjoying the massive wealthy they’ve sucked out of their customers. They are tired of

The Securities and Exchange Commission is weak and everyone knows it, weak and too feeble to take banks to trial.

During the Savings and Loan crisis no one was brought to trial. During the 2008 meltdown, no one was brought to trial and again only a mere slap on the hand at a Congressional Hearing. Too big to Jail.

The books are still cooked, the interest rates are extremely low which is favoring the banks and they are being subsidized by the government.

We need people like Elizabeth Warren, we need people with teeth, guts and honor to get these CEO’s really look at regulations in a whole new light of consequences for their illegal actions.

Let us hope that Elizabeth Warren instills enough fear into these Wall Street CEO’s that they have no delusions about her and have changed their dark ways of criminal activity.

In particular, we all remember that after the meltdown banks mercilessly foreclosed on homeowners throwing them onto the streets, and often made errors in their overzealous actions to repossess homes that were underwater. In many instances the big banks used illegal means to foreclose and without discussion for settlement and or re-organizing loans.

Not one person has lifted the covers on Wall Street and until these banking issues are prevented through vigorous penalties and criminal charges there could be another meltdown in the future.

Elizabeth Warren In Action With The US Banking Regulators

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