The Slap on the Wrist Financial and Corporate Crime Fines

corporate alliance pledgeHave you ever noticed that large corporations can get away with pretty much anything? Over and over again a major scandal breaks and in the end the fines are pennies on the dollar for the profits gained by these nefarious financial activities.

Banks can launder money with impunity and the consequences are a small fine in comparison to the profits made. No matter how egregious there are no criminal chargers or revoking of the bank's charter.

The British bank Standard Chartered said on Thursday that it expected to pay $330 million to settle claims by United States government agencies that it had moved hundreds of billions of dollars on behalf of Iran.

At first glance the record $1.9 billion HSBC fine for laundering Mexican drug cartel money looks like a solid. Yet buried in the fine print, HSBC avoids charges via deferred prosecution.

The HSBC deal, which is expected to be filed on Tuesday in the Eastern District of New York, includes a deferred prosecution agreement with the Manhattan district attorney’s office and the Justice Department. The deferred prosecution agreement, a notch below a criminal indictment, requires the bank to forfeit more than $1.2 billion and pay about $650 million in fines, according to the officials briefed on the matter. The case, officials say, will claim violations of the Bank Secrecy Act and Trading with the Enemy Act.

As part of the deal, one of the officials briefed on the matter said, HSBC must also strengthen its internal controls and stay out of trouble for the next five years. If the bank again runs afoul of the federal rules, the Justice Department can resume its case and file a criminal indictment.

Even the record breaking BP fine is considered a slap on the wrist and generated outrage that BP should be barred much longer from federal contracts.

This settlement is pathetic. The $4 billion penalty is equivalent to just a fifth of the company’s 2011 profits. The point of the criminal justice system is twofold: to punish and to deter. This does neither. It is a weak-tea punishment that provides zero deterrence to BP or other companies. Consider that after the 2005 Texas refinery explosion that killed 15 people, BP pleaded guilty to a criminal charge and paid a fine. Now, after a 2010 event that killed 11 people, BP is again pleading guilty and paying a fine. Zero deterrence. Although the government is right to pursue manslaughter charges against two individuals BP employees, the settlement is inadequate to address BP’s repeated criminal conduct. The government must impose more meaningful sanctions.

Over and over we hear threats of civil lawsuits, yet these seem to be tied up in litigation and the courts.

The nation’s largest banks are facing a fresh torrent of lawsuits asserting that they sold shoddy mortgage securities that imploded during the financial crisis, potentially adding significantly to the tens of billions of dollars the banks have already paid to settle other cases.

Regulators, prosecutors, investors and insurers have filed dozens of new claims against Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and others, related to more than $1 trillion worth of securities backed by residential mortgages.

Estimates of potential costs from these cases vary widely, but some in the banking industry fear they could reach $300 billion if the institutions lose all of the litigation.

Most amusing is the claim that if corporate criminals pay up, magically that will slow the economic recovery. Therefore we should just let them get away with it. Clearly that logic is false, considering the state of the economy. Just the other day, Citigroup laid off 11,000, all the while paying their executives outrageous sums.

There has been no real criminal prosecutions for the large banks, none. Too big to fail is much more than systemic risk, it's also reducing the power of these institutions, so maybe, someday, we can have even the smallest amount of actual justice.

The libor scandal fines haven't been tallied up yet, with UBS fine estimates being $466 million.

Switzerland’s biggest lender, is close to agreements with U.S. and U.K. regulators to pay more than 290 million pounds ($466 million) in fines over allegations traders tried to rig global interest rates.

Last week JPMorgan Chase and Credit Suisse paid fines for subprime backed derivatives.

Under the agreement, J.P. Morgan will pay $296.9 million and Credit Suisse $120 million to the SEC, which will distribute the money to investors who were harmed. In statements, both banks said they were "pleased" to have the settlements complete. Neither company admitted or denied the allegations.

Not only do we have fines that are more pay to play fee for the actual profits made, but we also have news the SEC is ignoring whistleblower tips of further violations:

Two days ago, we said it was time to fire the SEC’s chief of enforcement Robert Khuzami, who has not provided the tough policing warranted by the biggest financial crisis in the agency’s history. Our call was based on compelling evidence of failure. Specifically, a year and a half after Dodd Frank created a $450 million whistleblower fund, which Khuzami confirmed had produced hundreds of high quality leads, the agency had taken only one referral far enough to merit a payout, that of a measley $50,000.

The SEC gives enforcement statistics, but when one tallies them all up in comparison to the profits made, the message is clear, financial crime and fraud pays.

Not to be outdone with puny punishment, the CFTC fined Goldman Sachs a measly $1.5 million for a rogue $8.5 billion hidden trade position.

One CFTC commissioner, Bart Chilton dissented on this fine and called it a slap on the wrist.

The Commodity Exchange Act provides the Agency with authority to prosecute violations “of any provision of this Act or of the rules [. . .],” and to request CMPs “for each such violation.” 7 U.S.C. Section 9(c). These penalties should be calculated so that they are more than a “slap on the wrist” or a "cost of doing business." Given that Goldman failed diligently to supervise the activities of the Trader approximately 60 times, and that, under the maximum penalty levels in effect at the time of these failures ($130,000 per violation), the starting point for assessing the CMP in this matter should be $7.8 million (60 x $130,000). I do not believe the $1.5 million CMP in this settlement is anywhere close to an amount representing a sufficient penalty or deterrent.

The Commission should have clear authority to levy meaningful CMPs. In that vein, I have called on Congress to provide unambiguous statutory authority to permit broad discretion in the interpretation of “each such violation,” and also to significantly increase our maximum penalty levels. Specifically, we need the unequivocal authority to assess penalties appropriate to timing and conduct—for every single statutory or regulatory violation, on a per second, per hour, or per day basis, as may be apposite to each individual prosecution. Additionally, our statute should be amended to increase maximum penalty levels to $250,000 per violation as to individuals and $1 million as to entities. In instances of market manipulation, the maximum penalty levels for individuals should be $1,000,000 per violation and increased to $10,000,000 for entities.

Furthermore, I believe the Commission should amend its current policy statements relating to imposition of CMPs. First, we should specifically include as an assessment factor the risk that the illegal conduct poses to any person, group of persons, or to market integrity generally. Violations that threaten significant risk of harm to customers or markets should be subjected to higher CMPs. Consequently, a failure to supervise diligently should incur much more significant penalties when such failure jeopardizes customer money or the financial health of an important institution. Second, the Commission should modify its policies to clarify what “each such violation” means. In the case of Commission Regulation 166.3, the Commission should clarify that each instance in which prohibited activity took place constitutes a separate violation.

Instead of putting the breaks on high frequency trading, we have a new study which shows the bias against the little guy by HFT.

High-speed traders, “make as much as $5.05 each time they go up against small traders buying and selling one of the most widely used financial contracts” for S&P 500 futures.

In spite of the nuermous problems with high frequency trading, getting the practice stopped is still nowhere with regulators:

The agency has not endorsed Mr. Kirilenko’s findings, which are still being reviewed by peers, and they are already encountering some resistance from academics. But Bart Chilton, one of five C.F.T.C. commissioners, said on Monday that “what the study shows is that high-frequency traders are really the new middleman in exchange trading, and they’re taking some of the cream off the top.”

Mr. Kirilenko’s work stands in contrast to several statements from government officials who have expressed uncertainty about whether high-speed traders are earning profits at the expense of ordinary investors.

In spite of these events there are actually less accounting fraud enforcement by the SEC and they claim it's because there isn't any:

The SEC’s 2012 whistleblower program statistics show that the most common complaints are for corporate disclosures and financial fraud, 18.2% percent, even though we know now that it’s the eleventh straight year of fewer enforcement cases filed for accounting fraud and disclosure violations. Whistleblowers are reporting that accounting and disclosure fraud is still occurring and probably happening more than any other financial crime.

With penalties and fines being almost a kickback for corporate crime, the dismantling of financial reform continues. Now the U.S. Treasury exempted foreign exchange swaps from regulation. Foreign-exchange swaps and forwards are a subset of the $4 trillion derivatives trades in foreign exchanges and now there is no oversight.

The Commodity Markets Council, a lobbying group for energy and agriculture companies and derivatives exchanges, said in a June 2011 letter that the exemption could undermine the regulatory overhaul. The council “believes exempting foreign exchange forwards and swaps at this time from the clearing and trading requirements of Dodd-Frank could increase systemic risk at a time when regulators around the globe are trying to reduce it,” according to the letter, which was submitted in response to Treasury’s proposed exemption.

We're told there is a plan to deal with too big to fail, yet actual implementation of that plan, even capital requirements seemingly never happen and it is also questionable the below tackles contagion and systemic risk. One of the excuses to not criminally prosecute these large corporations is the claim they are too systemically important. Being so large is a major reason these firms can get away with anything.

Shareholders should expect to be wiped out and unsecured bondholders “can expect that their claims would be written down to reflect any losses that shareholders cannot cover”, which did not happen when the US and UK had to prop up their international banks in the 2008 crisis.

Senior management would be removed, but critical business functions would continue and healthy operating subsidiaries, both foreign and domestic, would be allowed to keep operating, limiting the damage to the broader economy, the regulators write.

The intervention would occur at the top-tier holding company level of the international banks. By addressing the problem at the top of international banks, the strategy document says it avoids “separate territorial and entity-focused insolvency proceedings” as happened in the Lehman Brothers bankruptcy.

The document states that since big US and UK banks do not currently hold sufficient debt and equity at the top of their group holding structures, regulators will need to take steps to address that.

Then there is speculation on who will be Obama's pick for new SEC chair. The dream guy for the job is Neil Barofsky. Who wants to bet he hasn't a prayer's chance due to his outspoken watchdog diligence. Here's an interview with Barofsky, where the opening paragraphs make clear what's at stake if we don't get a incorruptible top financial cop.

The stakes are high. In the 1930s, the SEC cleaned up a stock market that had gone out of control, rigged by insiders and ultimately wrecking the economy. During this most recent financial crisis, the SEC operated as Barofsky put it, as a “backwater.” SEC Chairman Chris Cox was known as a passive regulator who did not understand the markets. Whistle-blower Harry Markopoulos later embarrassed the SEC by revealing he had tried to tell them about Bernie Madoff’s $20 billion-plus fraud for eight years, to no avail. Obama appointee Mary Schapiro has done marginally better, but the SEC has still been battered in the courts and in Congress. And Schapiro recently lost a high-profile fight to regulate money market funds, which were a key part of the highly vulnerable shadow banking system.

Most significantly, the SEC has no high-profile court wins against key players in the financial crisis. The SEC charged Goldman Sachs in 2010 with defrauding its customers in the mortgage-backed securities market, the centerpiece of the crisis. But it later settled with the company, not forcing Goldman to admit or deny wrongdoing. In fact, settling with corporations without forcing them to admit wrongdoing is policy at the SEC, under former Deutsche Bank executive turned SEC Chief of Enforcement Robert Khuzami. This policy is so ingrained that when Judge Jed Rakoff invalidated a settlement between the SEC and Citigroup on selling toxic mortgage bonds and ordered a trial, Khuzami fought bitterly to have the judge overruled.

What's astounding is how la de da these latest events are to the press and even the public. People are numb at this point on financial reform. Notice the topic didn't even come up in election 2012.



Crime literally pays - must be big corporation and lobby though

Rules of the game - incorporate along with a few other people, conduct some legitimate business (although that doesn't have to generate profits, or even a majority of your business activities), break as many laws as you want, or to avoid any problems, write the laws yourself and have your paid-for-politicians adopt them directly, and reap those profits. If you don't generate profits, loot the company before you destroy it. You are a "job creator," after all, and that comes with privileges. Lobby and fund raise for international charities. In fact, name a charity after yourself or your corporation - no need to check your ego at the door, you are godlike, it's time to let everyone else know it. People with charities don't get in trouble with the law, how many CEOs and key donors are ever arrested or locked up in a real prison? If you get in trouble ever, despite lobbying Congress, your local, county, and state politicians, international groups such as the IMF, EU, World Bank, UN, etc., lobby the DOJ and your politicians harder.

Make sure your corporation's big law firm has a habit of hiring federal prosecutors and regulators and that federal prosecutors and regulators hire from those same law firms. Regular revolving door hiring policies ensure everyone gets along and no real enforcement, prosecution, or changes happen. Troublemakers aren't hired by the feds, and people that ask questions are exactly that. Adversarial justice and litigation is for the 99%, not the plutocratic big dogs in the boardrooms. Hire one or two feds on your staff directly and the illusion is even better. If they dare make waves (and who would if they want that big paycheck), show them the door. Opensecrets shows the lobbying that our govt. accepts. Who knew law enforcement agencies like the DOJ could actually be lobbied? Funny, everyday citizens surely aren't gaining access to the AG's office and meetings rooms. The DOJ and others will step in and claim federal preemption and supremacy over other agencies even though that's incorrect and states can prosecute criminal matters even when the Feds choose to or not to (still waiting for the NY AG to prosecute Corzine or anyone that had a victim he stole from live in their county or state - guess we'll keep waiting).

If you get called in for a hearing, make sure your PR and lobbying team has hundreds of secret meetings before you ever step into a chamber. Donate to their friends and families and give them sweet jobs in your corporation or in a friend's corporation. And when you appear, blame everything on underlings and claim "you forgot" and "mistakes were made by other people, changes will be made, but it's not the fault of the company or top people." Make sure you appear repeatedly on TV and radio to plead your case to people on your payroll. Repeat "job creator" and "uncertainty" 100+ times per media appearance and how the threat of facing law enforcement or regulatory enforcement might prevent you from building a new vacation home, and that might not create 100 here or in Tahiti. Wear your flag lapel pins at all times. After all, how can a bank CEO raise money for Iran or drug cartels or make $40 million + for doing exactly that if he's wearing a flag lapel pin and his interviewer is also wearing a flag lapel pin? People that wear flag lapel pins would never launder money for people that build IEDs or blow up buildings or cars or launch missiles against allies or run an entire country based on meth production, right? If they ask tough questions (i.e., questions off script), fire them and their producers for hiring people with a modicum of integrity. Continue collecting massive loot while paying fines less than 1% of the ill-gotten wealth. Never fear incarceration or forfeiture or a raised voice. Rinse and repeat.

**This is good for all crimes involving large corporations (in funds, not necessarily in number of legitimate business activities or number of employees). If you are a small Mom-and-Pop corporation incorporated solely to conduct legitimate business and avoid personal liability, forget this advice, you're screwed. Individuals, break the law, you're screwed. However, big enough and corrupt enough (sorry, "lobby" enough) the world is your oyster. Commit fraud on a massive scale in securities, banking, housing, or any other sector your heart desires across towns, counties, states, and nations, forge documents and bribe or intimidate witnesses, help arm criminals and rogue nations and launder their money, bribe here and overseas, destroy environments, break wage and labor laws, directly endanger the lives of those you employ (or your subcontractors' subs employ), skimp on safety, loot corporate $ at the expense of shareholders, eavesdrop on people to make more loot, hinder investigations, etc. You get the message. Now go rape and pillage big kleptocrats, we paid for it and pay for it every day the rule of law is shown for the farce it is.

Standard Charter pays $327 million slap on the wrist

When this article was published the deal wasn't officially announced, now it is.

Standard Chartered Plc (STAN), Britain’s second-largest bank by market value, agreed to pay $327 million of fines, in line with the bank’s forecast, after regulators alleged it violated U.S. sanctions with Iran.

After paying a $340 million settlement in August to New York’s Department of Financial Services, the London-based company told investors on Dec. 6 it expected to pay about $330 million on Dec. 6 to resolve other investigations.

The bank will pay $100 million to the Federal Reserve and $227 million to the U.S. Department of Justice and the District Attorney for New York County. The settlement includes a $132 million fine to the Treasury Department’s Office of Foreign Assets Control, according to a statement from the Federal Reserve today.

Just outrageous considering their numerous violations and repeated violations.

The feds stepped in on NY authorities to purposely protect banks

No fan of State AGs because most of them just as bad as fed "enforcement/regulation," but the NY AG and banking authorities back in the summer caused all the commotion when they finally couldn't sit idly by while Standard Chartered continued ignoring the rules and laws for almost a decade now regarding money laundering. Of course Wells Fargo and the other banks also love the money laundering - it's a money maker for all concerned. So what happened as this site and others showed this summer? Well, the Treasury, OFAC, FinCEN, DOJ, or whatever other useless agencies just couldn't have terrorism $ laundering banksters being treated like the citizens. Versailles protects its own, even if they are foreign nobility/banksters headquartered in the UK. So they squashed the NY authorities, got pissed at them (instead of banks aiding and abetting our enemies and compromising our security) and protected the banks with a sweetheart deal. Let me ask, if I can make tens of billions and only get fined millions, why shouldn't I break the law? Cost-benefit analysis says go ahead, break the law, make more money than following the law like suckers, and the feds will protect you. Especially when I can use the same money I just made from crime to help protect me - isn't that the very definition of corruption?

Notice how this story isn't covered on front pages anywhere. But CNN has stories on what it means to be "black" (WTF?) in America in 2012, gay marriages, the phone prank in UK/Australia, some football stories, etc. Now, our government and politicians helping business make $ and protecting them as they break laws and endanger us is important and shows how compromised we are by our "leaders" and govt., but you'd never know it by the stories they want us to care about. They have a ready stock of hundreds of stories that will fire up people because they have no real answers, play off emotions, divide people, and can be brought out in 1990 or 2000 or 2050, whenever they are needed to distract from the corporate criminals bankrolling them.

By the way, why do banks and other corporations even bother with the pretense of having compliance departments and general counsels? If you are honest and work there, you'd get fired. No one that cares will make it past computer screening in the first place. And the banks make money by purposely ignoring rules and regulations. So save the salaries, cut the entire compliance and legal staff, and have at it. In fact, get rid of the Treasury OFAC, FinCEN, DOJ (especially organized crime because if big banks aren't "organized crime," nothing is), and every other agency paying $50,000 - millions in the private sector. It's a waste, it's a joke, and we all know it.

"See something, say something" - the govt. doesn't care about anything except helping its corporate sponsors make more money for the people in the boardrooms at the expense of our financial and physical safety and welfare. Now act on that DHS. . .

Get these people to face Iranian made IEDs - then they'll learn

Why do the Fed, NY DA's Office, and DOJ get money. OFAC? Useless. Sounds like a payoff. We won't make our attorneys and investigators work past 3:30, and they can still keep their 4 day work weeks, but you have to pay us this amount. Basically, no one has to do any work and $ changes hands. No lessons learned and life goes on for criminals and phony enforcers.

Here's an idea - everyone involved, whether in the NY DA's Office, OFAC, the Fed, banking authorities in Albany and DC, all get to face Iranian-made IEDs for 1 year for $20,000. How about that? Maybe then they'll give more of a sh*t about fighting terror, if Iran actually is a terror sponsor, shouldn't everyone care just a little bit more? Standard Chartered, CEO, other officers, board, and AML + OFAC departments, everyone goes overseas to see why you really, really should care more about your crimes. HSBC, same thing. Go live in neighborhoods torn apart by narcoterrorism. Go visit widows and orphans of killed public officials and police and live in their houses for 1 year while you can talk about how important it is that fines only be paid for aiding narcoterrorists. OFAC and DOJ officials, enjoy your time in Burma/Myanmar talking to the Karen and other people that suffered slaughter and enslavement at the hands of a national govt. that you helped launder money for. Get down in the trenches, see what you help aid and abet. Be big boys, nothing to fear, because the real world deals with this crap daily and you aren't, and should never be, so far removed that you feel yourselves immune. Aid the crimes, deal with the consequences and victims. NY DA? Seriously? Bankster capital USA and they are chasing Occupy? Congrats, that's really sticking it to people for enjoying their 1st Amendment rights - how proud the DA must be. Well, at least the $ is more openly exchanging hands now from the banks to the enforcers with this settlement. So, with Goldman and JP Morgan and every other bank headquartered in NYC, still waiting for heads to roll. It's not a question of jurisdiction, it's not a question of laws broken (come on, Grand Larceny 1st Degree - 1000+ counts, Conspiracy, Bribery, etc.), it's a question of integrity and will. And that is lacking all around.

The Roman Empire, British Empire, and now this. History repeats itself not because we don't know history, but rather it's because the people in charge don't give a crap, they loot and destroy as much as possible while letting the Goths and Vandals in while blaming their own citizens for all that's wrong - now that's "patriotism" for you.

HSBC also reached deal - just fines, who could have guessed?

HSBC just reached a deal (or is about to). Will pay fine at $1 billion + for its business of money laundering. And the stock is up on the news. Again, how is aiding terrorism or drug trafficking by laundering criminal proceeds and then returning them to terrorists and drug traffickers not subject to federal conspiracy laws? How does that not make everyone involved a co-conspirator and accomplice to terrorist acts and drug trafficking along with subject to every other law the feds love (e.g., tax evasion, mail and wire fraud, lying to federal agents, using interstate communication devices to commit crimes, etc.)? How do people helping terrorists and drug traffickers not spend one day in jail or a year of probation or suffer job losses or any forfeiture acts or get bashed in the media? No need to answer. The speed with which these deals were wrapped up sure does establish justice is swift and easy for big banksters. There are people waiting for trials for a year on charges of one sale or one count of laundering money in amounts 1/10000 the amount these banks handled in state courts, so if you break the law and want sweet, easy justice, GO BIG and make sure you let your representatives and lobbying groups know what you're up to so they can help you out ASAP if needed. In fact, no need to expose yourself to public rage. Everything will be handled behind the scenes and your attorneys will appear in a public courtroom at the very end to admit something really vague so business can go on as usual. Seems only yesterday we had the S&L crisis, mortgage fraud, derivatives, FinCEN being set up solely to fight money laundering, gung-ho "follow the money" following 9/11 because the feds wanted to appear to care about terrorism financing. But every day it's shown who wields the power.

$1.9 billion for HSBC, stil chump change to profits made

I couldn't help but think how timely this article was and it was updated with the HSBC results. I think Mexican drug cartels are responsible for about 13,000 murders per year. I linked to the original article about HSBC money laundering, actually two articles and it was brazen by the Senate study.

The profits from laundering drug money, which is estimated to be $1 trillion, launder about $2.6 trillion a year.

So, $1.9 billion is still chump change in comparison to the amount they laundered and the fees they collected.

That's about half of one quarter's profits for HSBC. Yet to find their profits from laundering but it's been going on for some time, so again, just kickback.


If American REALLY wanted to tackle their deficit they would legalize pot, tax it at the federal level to pay down the debt and then SEIZE all Mexican drug cartels assets, globally and just say "they are ours". They would work a deal with the Mexican government later to give some of it back, but just those actions, plus the $1 trillion wasted fighting the "drug war" would pretty much put the deficit issue to rest.

Goes to show what a rigged system this all really is.

banks are too big to put in a cell

I am far from defending the corrupt actions of those who run financial institutions. But trying to enforce a criminal charge against a corporation consisting of a complicated chain of commands is difficult. You cannot send the entire board of directors, the plant and the line manager, and any sub-contractors inadvertently responsible for safety violations, to prison for manslaughter through negligence. US prisons are already full to bursting - though admittedly some room could be made if you released those locked up for possessing small amounts of illegal substances.

As a legal entity, a company has to be treated differently from a single person - not in the sentence, but in the punishment enforced. But yes, more needs to be done to ensure that safety and preventive measures, against criminal malpractice, are properly enforced by regulators.

Any criminal organization can have many people locked up

Look to Italy and Colombia for examples. Those countries had companies and thousands upon thousands of people working directly for criminal organizations. They also had thousands upon thousands of compromised individuals in the government in law enforcement and every other sector. Yet the governments wanted to change the system so they went against those implicated. Nothing and no one is ever TOO BIG TO JAIL. That's what RICO was created for - organizational prosecutions. And RICO doesn't just cover civil penalties - it imposed imprisonment and forfeiture. So the creators of the law knew exactly what they wanted, they wanted to make it easier to investigate cases against entire organizations, gather evidence, and make it easier to prove the cases. That's what RICO is for. And it is not just for the "traditional organized crime," as its history and use have proven time and time again.

Small organizations and small professional shops are prosecuted all the time. Whether its accountants, lawyer, truck driving companies, etc., if an organization has a few or more members laundering money for terrorists or traffickers, or compromising investigations, or running drugs or weapons for them, they will be prosecuted and shut down. There is nothing so inherently difficult about investigating and prosecuting large organizations. In fact, it is much easier. Read federal conspiracy laws. Federal laws make investigation and prosecution incredibly easy compared to state laws. Think of how many emails are sent regarding every single action, how many people approve every action, how many people collect paychecks for their action, and the records everyone keeps. All of this is evidence of who approved something, why they did, how, and the benefits reaped. The paper trails are pure evidentiary gold. And if there are too many people to prosecute (but given the lack of prosecution by the feds, they should be working for their paychecks), do what people do in every jurisdiction. Arrest and prosecute as many as possible so you deter the rest. These are simple concepts that apply to every other criminal, so there's really nothing new here despite their pleadings on Bloomberg and Fox. It's been done 10,000,000 times before, banksters and corporate criminals are nothing special, just in their current treatment.

Don't fall into "I didn't know my subcontractor was going to let people work in unsafe conditions" meme. Talk about willful blindness. "Gosh, Officer, I was told to drive this car across from a warehouse in Juarez directly into El Paso to another warehouse. I never met the people before, they paid me $50,000 to do it, told me to never look in the trunk, and to run away from the car if you asked me to pop the trunk. Drugs? You found drugs?! I never knew, can't blame me." Yeah, that's how unslick the corporate boards and officers and top people are. If they are big enough to take full responsibility for their massive unwarranted paychecks and bonuses and get bailed out by us, then they are big enough to take the blame when their corporations commit crimes here and abroad. That kind of responsibility even little children understand, so the pass for corporate honchos will not do. There's no picking and choosing responsibility - it's a package deal.
And the prisons that are packed are woefully empty of big corporate criminals. In fact, Madoff is kickin' it in a joke camp. Medium and max federal prisons are notably empty of big banksters and their ilk. But I'm all for change, change is good for our country and needed to help restore faith in our system and the idea that everyone is equal before the law.

corporate crime, China has the death penalty

France used to send financial criminals to Devil's Island, simply tortuous. America doesn't send anyone to jail and if they find that lone individual, it's minimum security with free cable.

The entire drug trade globally is in the trillions. Ever notice how we can talking points which limit alternatives to say two bad ideas, such as the budget deficit? Can't force pharmaceutical companies to charge the same as other industrialized nations, on no, must cut benefits.

arrests in U.K. over Libor manipulation

Never happen here but it seems in the U.K. there were 3 arrests:

Former UBS and Citigroup banker and two others questioned as part of Serious Fraud Office investigation into Libor manipulation.

I'm not sure but I believe in the U.K. an arrest is different than the U.S. and it would be an actual charge that is the key, i.e. you can be arrested without the actual charge, don't quote me on that.

Excellent article

Robert Oak,

I think that this article is excellent. Suggest that you submit it to, which may decide to post it on the ZH front page.

-- Paul D. Bain

thank you, ZH

Why would I submit an article to Zerohedge. We're our own site, we publish our own content and we are a news source. Why would I give away our articles to ZH? If people want to read our material, just type the URL into the address bar or subscribe to the many feeds.

Occupy SEC submits brief to Supreme court

Just when you think the entire OWS died, Naked Capitalism has this story.

Occupy the SEC submitted an amicus brief in Gabelli v. SEC, a case before the Supreme Court. The plaintiffs are appealing a Second Circuit decision over the issue of the statute of limitations. The underlying charge is that Gabelli, a portfolio manager at Gabelli Funds LLC, and the chief operating officer, Bruce Alpert, engaged in fraudulent market-making.

This is actually encouraging and I feel negligent for I didn't know this work was going on.

USB $1.2 billion for rigging Libor

The question is how much in profits did they make, odds are much, much more. Story here.

And regulators and law enforcement getting paid for doing what

Interest-rate fixing took trillions out of the hands of everyone from individuals to governments, so to even make up for their losses, the penalties would have to be so much larger, without even getting into the necessary deterrent factor of incarceration and forfeiture so that someone somewhere might think about not breaking more laws today and raping customers at will. UBS is another one that seemingly loves breaking laws. It also loves evading taxes. Another pertinent question is how many people work in places from the SEC to the DOJ to state AG offices to county prosecutors to other folks and on and on at all levels that are seemingly okay with big banks and other corporations breaking so many laws and still earning good money for seemingly not doing anything. For instance, say DOJ and Treasury have 300 people total working in OFAC + AML. Median salary, let's say $100,000. That's 30 million right there that was wasted. How many bank regulators and inspectors are there globally assigned solely to big banks? How much money do they earn before they earn more switching to the big banks they just "oversaw"? And banks, let's say they have 100,000 globally with median salaries of $50,000 - $100,000. And legal staffs, compliance staffs, counsels, vps, assistance vps, and so on. Just imagine how much money could be passed on in savings if those staffs were cut because they could break the law anyway. Of course I'm kidding, savings aren't passed on to bank or corporate customers. The CEOs could make so much more if they cut these staffs and their politicians could of course get their slice.

As average citizens, why exactly are we subject to small and big laws with the full threat of financial and personal destruction, unemployment, jail, prison, and/or probation when big corporations have essentially established a protection racket for themselves and can do no wrong? When the laws are applied only against those without the power and money to lobby or buy protection, legal authority seems to be tyrannical. It's certainly not arbitrary, because it's obvious the people that take money from customers or inherit or steal it can avoid any liability while those who can't suffer for following all the rules and regulations imposed on them.