WIKILEAKS “TAKING DOWN” A BANK: BofA? “Ecosystem of Corruption”

COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary

Notable Quotes:

“For this, there’s only one similar example. It’s like the Enron e-mails.”

“on Nov. 29, the director of WikiLeaks, Julian Assange, said in an interview that he intended to “take down” a major American bank and reveal an “ecosystem of corruption” with a cache of data from an executive’s hard drive. With Bank of America’s share price falling on the widely held suspicion that the hard drive was theirs, the executives on the call concluded it was time to take action.”

“That Mr. Assange might shift his attention to a private company — especially one as politically unpopular as Bank of America or any of its rivals, which have been stained by taxpayer-financed bailouts and the revelation of improper foreclosure practices — raises a new kind of corporate threat, combining elements of law, technology, public policy, politics and public relations.”

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Editor’s Note: We don’t actually know if it is BOA but previous comments have indicated that Assange has the contents of a hard drive from an executive with about 250,000 documents. For Assange to say that what he has, regardless of which bank it is, comes into the range of the Enron disclosures, means that he thinks that these disclosures will be a blow-out of some sort.

We can speculate about the content, but the most likely inflammatory stuff is most likely the actual knowledge the Bank had regarding the legal viability of the 60 million loans that are claimed to have been securitized. If the Bank knew the mortgage bond pools were empty and that the loans were fatally defective as to both enforcement of the “security interest” (the mortgage or deed of trust) and the obligation (including the note), if they knew that the foreclosures were fraudulent but went ahead with them anyway, the effects would indeed be as large as Enron.

It has been stated here for over three years that the loans are unenforceable, that the mortgages themselves were void, or wild deeds, and that any purported transfer of interest in the receivables was NOT part of the alleged securitization scheme, but rather diversion of money from the rightful recipients. Any admissions contained on that hard drive that supports these assertions would not only corroborate that most or all of the foreclosures were invalid “wild deeds” but would show an intentional act on the part of the Bank and its executives to violate the law, steal homes, and use their sheer size to bully their way through the objections of borrowers and their attorneys. Such a pattern of conduct if proven would most likely lead to prison for some people and the end of the Bank.

The net result would be that everyone who thought they lost their homes in foreclosure would still own them, unsecured by any encumbrance and potentially without an obligation owed, except potentially in equity to investors who had clean hands. They would be converted from a state of financial ruin to a state of financial health. The same would hold true for everyone who is or was in a “loan” that is claimed to be part of a securitized pool.

Neither the pool nor the originating lender is in a position to enforce the debt and neither of them has any security rights if our analysis is correct. I have a very high degree of confidence that my analysis is completely correct and that the only way out for the banks would be the destruction of a our system of laws, political structure and power. Whether any of this is actually the topic of the leaks is mostly conjecture backed up by some facts but not enough to be sure which bank and what information is the subject of the disclosures expected within the next 30-60 days.

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Facing Threat From WikiLeaks, Bank Plays Defense

By NELSON D. SCHWARTZ

By the time the conference call ended, it was nearly midnight at Bank of America’s headquarters in Charlotte, N.C., but the bank’s counterespionage work was only just beginning.

A day earlier, on Nov. 29, the director of WikiLeaks, Julian Assange, said in an interview that he intended to “take down” a major American bank and reveal an “ecosystem of corruption” with a cache of data from an executive’s hard drive. With Bank of America’s share price falling on the widely held suspicion that the hard drive was theirs, the executives on the call concluded it was time to take action.

Since then, a team of 15 to 20 top Bank of America officials, led by the chief risk officer, Bruce R. Thompson, has been overseeing a broad internal investigation — scouring thousands of documents in the event that they become public, reviewing every case where a computer has gone missing and hunting for any sign that its systems might have been compromised.

In addition to the internal team drawn from departments like finance, technology, legal and communications, the bank has brought in Booz Allen Hamilton, the consulting firm, to help manage the review. It has also sought advice from several top law firms about legal problems that could arise from a disclosure, including the bank’s potential liability if private information was disclosed about clients.

The company’s chief executive, Brian T. Moynihan, receives regular updates on the team’s progress, according to one Bank of America executive familiar with the team’s work, who, like other bank officials, was granted anonymity to discuss the confidential inquiry.

Whether Mr. Assange is bluffing, or indeed has Bank of America in its sights at all, the bank’s defense strategy represents the latest twist in the controversy over WikiLeaks and Mr. Assange.

The United States government has been examining whether Mr. Assange, an Australian, could be charged criminally for the release by WikiLeaks of hundreds of thousands of classified Pentagon and State Department diplomatic cables that became the subject of articles in The New York Times and other publications last month.

The Swedish government is also seeking to question Mr. Assange about rape accusations against him. As he fights extradition from Britain in that case, he remains under house arrest in an English mansion. Mr. Assange has said the timing of the rape accusations was not coincidental, and that he was the victim of a smear campaign led by the United States government.

Despite his legal troubles, Mr. Assange’s threats have grown more credible with every release of secret documents, including those concerning the dumping of toxic waste in Africa, the treatment of prisoners held by the United States at Guantánamo Bay, the wars in Iraq and Afghanistan and, most recently, the trove of diplomatic cables.

That Mr. Assange might shift his attention to a private company — especially one as politically unpopular as Bank of America or any of its rivals, which have been stained by taxpayer-financed bailouts and the revelation of improper foreclosure practices — raises a new kind of corporate threat, combining elements of law, technology, public policy, politics and public relations.

“This is a significant moment, and Bank of America has to get out in front of it,” said Richard S. Levick, a veteran crisis communications expert. “Corporate America needs to look at what happens here, and how Bank of America handles it.”

Last month, the bank bought up Web addresses that could prove embarrassing to the company or its top executives in the event of a large-scale public assault, but a spokesman for the bank said the move was unrelated to any possible leak.

Then, on Dec. 18, Bank of America may have antagonized Mr. Assange further when it said it would join other companies like MasterCard and PayPal in halting the processing of payments intended for WikiLeaks, citing the possibility the organization’s activities might be illegal.

Mr. Assange has never said explicitly that the data he possesses comes from Bank of America, which is the nation’s largest bank, though he did say that the disclosure would take place sometime early this year.

The bank has emerged as the most likely target because a year before the latest threat, Mr. Assange said in an interview that his group had the hard drive of a Bank of America executive containing five gigabytes of data — enough to hold more than 200,000 pages of text — and was evaluating how to present it. It was this connection that set the wheels in motion on Nov. 30.

The financial markets took the threat seriously. Bank of America shares fell 3 percent in trading the day after Mr. Assange made his threat against a nameless bank, and while the stock has since recovered, the prospect of a Bank of America data dump from WikiLeaks remains a concern, said Moshe Orenbuch, an analyst with Credit Suisse.

“The fears have calmed down somewhat, but if there is something out there that is revealed, the market reaction will be negative,” he said.

Bank of America’s internal review has turned up no evidence that would substantiate Mr. Assange’s claim that he has a hard drive, according to interviews with executives there. The company declined to otherwise comment on the case. A WikiLeaks representative also declined to comment.

With the data trail cold, one working theory both inside and outside the bank is that internal documents in Mr. Assange’s possession, if any, probably came from the mountains of material turned over to the Securities and Exchange Commission, Congressional investigators and the New York attorney general’s office during separate investigations in 2009 and 2010 into the bank’s acquisition of Merrill Lynch.

As it happens, Mr. Assange’s first mention of the Bank of America hard drive, in October 2009, coincided with hearings by the House Committee on Oversight and Government Reform into the Merrill merger, and with wide-ranging requests for information by the committee.

The bank’s investigative team is trying to reconstruct the handover of materials to public agencies for a variety of inquiries, in pursuit of previously undisclosed documents that could embarrass the company, bank officials said.

In addition to the Merrill documents, the team is reviewing material on Bank of America’s disastrous acquisition in 2008 of Countrywide Financial, the subprime mortgage specialist, the officials said. The criticism of Bank of America’s foreclosure procedures centers mostly on loans it acquired in the Countrywide deal, and one possibility is that the documents could show unscrupulous or fraudulent lending practices by Countrywide.

If that is the case, it would not only reignite political pressure on Bank of America and other top mortgage servicers, but it could also strengthen the case of investors pressuring the big banks to buy back tens of billions in soured mortgages.

“If something happens, we want to be ready,” one bank official said. “You want to know what your options are before it comes out, rather than have to decide on the spot.” Bank of America’s efforts are complicated by the fact that it has made several huge acquisitions in recent years, and those once-independent companies had different computer systems and security procedures.

WikiLeaks has taken on private companies in the past, including leaking documents from Barclays of Britain and Bank Julius Baer of Switzerland, but neither disclosure drew nearly as much attention.

Officials at the S.E.C., the House oversight committee and the New York attorney general’s office insist the information they received had been turned over in the form of papers and discs, never a hard drive, and deny they are the source of the WikiLeaks cache.

At the same time, Mr. Assange’s own statements would seem to undermine the government-as-source theory, hinting instead that resignations might follow as evidence emerges of corruption among top executives, something the public investigations never found.

“It will give a true and representative insight into how banks behave at the executive level in a way that will stimulate investigations and reforms, I presume,” he said in the November 2010 interview with Forbes. “For this, there’s only one similar example. It’s like the Enron e-mails.”

Eric Dash and Louise Story contributed reporting.

14 Responses

  1. […] This post was mentioned on Twitter by Da'ud X Mohammed. Da'ud X Mohammed said: RT @i8wamu: WIKILEAKS "TAKING DOWN" A BANK: BofA? "Ecosystem of Corruption": http://t.co/SsoUKmZ […]

  2. I wonder if the bank team that was hired to pour over bank of america documents is also creating a hedge fund so bank of america executives can profit from Bank of America’s loss in stock value.

  3. So funny in way, in a sarcastic way, the BIGGEST criminals trying to catch/persecute an alleged criminal (wikileaks) the criminals trying to find out how the possible criminal will expose the REAL ones. completely astonishing to what extremes they will go to cover up their wrong doing. God help us.

  4. Gregory Bryl- the article your post links to mentions BOA remarking that they (BOA) have been asked to repurchase only 8.7billion of loans out of 910billion sold to GSEs. (and others,I would assume). This would lead one to assume that the purchasers of the remaining 901.3 billion dollars of loans are pleased as punch with their purchases.
    In reality, BOA and the other TBTF banks blocked every attempt by the MBS investors to even open a dialogue with them. A sticking point is still that certificate holders must control 25% of the trust before the banks will talk to them- and the first thing the banks tell them is- prove that you own 25%-who are your investors. Sound familiar? They don’t really know who,if anyone,is an investor in the trusts, which may not even still exist,if in fact they ever did exist,and which collection right,if any, the trusts hold,if in fact they do hold anything. Just kidding.

  5. Hehe, this reminds me of an old proverb that states that you should punish your wife periodically for no reason because, even if you don’t know what for, she does.

    BOA has already lost as far as I am concerned. If it’s not even clear yet whether it’s them, why are they so worked up? What if Assange had nothing? Even if he has nothing, BOA has already told us that he SHOULD have something.

    BTW, BOA just got another “slap on the wrist” or a piece of disguised/covert subsidy:

    http://bryllaw.blogspot.com/2011/01/boa-gets-another-piece-of-covert.html

  6. Most fascinating is the new role of the trans-national Bank (B of A in this case) as a procurer of private criminal prosecutions against its own critics.

    Bruce R. Thompson, Bank of America’s Security Chief has zero interest in getting Bank of America to conduct itself honestly.

    Bruce R. Thompson has only one interest: and that is to connect the dots so as to fuel a criminal prosecution of Julian Assange.

    I have no brief for or against Julian Assange in this matter of the speculation on whether or not he has the goods on BofA.

    But what I do care about is that BofA and its Bruce R. Thompson will conduct trhemselves in such as fashion as to enhance the future capabillty of the Bank to “eat what it kills” in secrecy. And if what it kills makes the bank sick: then the bank will ask the US Government to bail it out. And the Bank will also ask the US Government to pay Julian Assange’s hotel bills at Club Fed.

    And it goes on and on: and Walt Kelly’s Pogo had a few choice words in the matter.

  7. Most fascinating is the new role of the trans-national Bank as a procurer of private criminal prosecutions against its own critics.

    Bruce R. Thompson, Bank of America’s Security Chief has zero interest in getting Bank of America to conduct itself honestly.

    Bruce R. Thompson has only one interest: andsthat is to connect the dots so as to fuel a criminal prosecution of Julian Assange.

  8. The unfounded focus on B of A is most likely intended to misdirect attention (Julian Mossad is probably faking it for a PR stunt with the banks maybe in on it). But when I saw “ecosystem of corruption” that made me think of Goldman Sachs and their complicit involvement with (were actually the ones to make the call to) have BP intentionally cause the oil spill disaster in the Gulf Coast and make it look like an accident so they could turn the whole area into an algae farm for bio-fuels and bank off profits through a company called PetroAlgae.

    Google it: Goldman Sachs PetroAlgae BP
    Mix them up

  9. Ally Financial (GMAC) has just paid $462 million to settle $292 BILLION in garbage loans sold to Fannie Mae. How is that for a slap on the wrist? 1/10 of 1 percent. Probably due to paperwork which Jeffrey Stephan misplaced.

  10. Spy v. Spy. “Somebody” is worried… The next Enron?

    http://www.huffingtonpost.com/2011/01/03/bank-of-america-wikileaks_1_n_803503.html

  11. Post this to your social media. Spread the word, because the press sure is not!

  12. A hard drive is not just documents submitted to the government–I have to agree with that. Think about this: BofA is probably destroying evidence as we speak. If the hard drive from BofA exists, then destroying documents could be very dangerous. I don’t know whether Mr. Assange will release these documents until he is no longer living with his present host. It has also become evident that there are quite a few people working for or with Wikileaks. It is not just Mr. Assange. Good for them! Maybe we will get some of the horrible truth about the mega banks out there in the open. http://www.challenginforeclosure.com Sirak@challengingforeclosure.com

  13. As in the past it not the “crime” but is usually the attempted “cover up” that causes the downfall…

  14. Go Wiki Go, burn BOA burn

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