Szymoniak: Honesty Pays $46.5 Million in Whistleblower Suit

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Editor’s Comment and Analysis:  

It was and remains a big lie — the securitization the loans, the origination of the loans, the assignments, alleges and endorsements. $46.5 million sounds like a lot and these whistleblowers will get a “windfall” as a result of it. But it is a drop in the bucket and we need to fill the bucket. And our bucket list should include taking down the big banks, removing money from politics, and getting back to government by the people and for the people.

Schiller, the scholar who has been leading the way in economic analysis of the housing market, has offered an audacious plan that is the last possible way for government intervention to save the economy, which is heavily dependent upon consumer spending, particularly in the housing market. Eminent domain has long been sustain as the right of government to take private property and convert it to public use. Whether it is a highway, downtown redevelopment or other reasons, eminent domain has been played by the banks and developers as a way to get land they need, at a price that could not be achieved using the power of the government behind them. 

While seemingly unusual and audacious, Schiller’s proposition has many precedents in history and should be considered as the last great hope after the 50 attorney generals agreed in the 50 state settlement that now prevents them from further investigation and prosecution against the banks. Schiller’s, the originator of the case-Schiller index showing that median income and income disparity is harmful to the economy and deadly to the housing market, proposes that we use the power of eminent domain to seize the remaining mortgages, and perhaps the property that has already been foreclosed, and remake the deals so that they make sense. Translating that means that the homeowners will get the deal that they should have received when they bought o refinanced their house. And it capitalizes on the inconvenient truth that it was the banks who created risks that neither the investors nor the homeowners signed up for.

By paying the value of the remaining mortgages — more than 30% are reported still under water and when carefully analyzed the figure is closer to 60%, the banks get no more and no less than they should, the investors still get their money — 100 cents on the dollar if they insist on payback from the banks in addition to the money from the new mortgages on the old property, and the homeowner is back in charge of his own home paying principal, interest, costs, fees and insurance and taxes that are fair market value indicators. It is better than the proceeds of foreclosures, so the banks now must argue that they have a right to take less money in order to get the foreclosure.

The banks want the foreclosure because they lied. And with the foreclosure it adds to the illusion that they funded or paid for loans in which they do not have a nickel invested. The fact that the balance sheets of the mega banks are going to take a giant hit is only an admission that the assets they are reporting are either not worth anything or are worth far less than the value shown on their public financial statements. They are still lying about that to investors, the SEC and other regulatory agencies.

So whistleblowers must pave the way and show the lies, show the inequality, show the inflated appraisals that could not stand the test of time and force government to act as it should. The chief law enforcement of the country and the chief law enforcement of each state owes his/her citizens at least that much and more. They must find ways to clear up the corruption of title records that are irretrievably lost. 

And the lawyers who keep turning down these cases because they are too complex or too weak should take a close look at these whistleblower  cases. The settlement, as always, comes before the trial because the fact remains that the banks are o the hook for  their bets on the mortgages and not the mortgages themselves. Lawyers need to show a little guts and seek some glory and wealth from these cases, while at the same time doing their country a service.

We are turning the corner and the banks are starting to lose. Keep up the fight and your effort will probably go well-rewarded.

Whistleblowers win $46.5 million in foreclosure settlement

By James O’Toole

NEW YORK (CNNMoney) — Getting served with foreclosure papers made Lynn Szymoniak rich.

While she couldn’t have known it at the time, that day in 2008 led to her uncovering widespread fraud on the part of some of the country’s biggest banks, and ultimately taking home $18 million as a result of her lawsuits against them. Szymoniak is one of six Americans who won big in the national foreclosure settlement, finalized earlier this year, as a result of whistleblower suits. In total, they collected $46.5 million, according to the Justice Department.

In the settlement, the nation’s five largest mortgage lenders –Bank of America (BAC, Fortune 500), Wells Fargo (WFC, Fortune 500), J.P. Morgan Chase (JPM, Fortune 500), Citigroup (C, Fortune 500) and Ally Financial — agreed to pay $5 billion in fines and committed to roughly $20 billion more in refinancing and mortgage modifications for borrowers.

A judge signed off on the agreement in April, and in May — Szymoniak received her cut.

“I recognize that mine’s a very, very happy ending,” she said. “I know there are plenty of people who have tried as hard as I have and won’t see these kinds of results.”

Related: 30% of borrowers underwater

Whistleblower suits stem from the False Claims Act, which allows private citizens to file lawsuits on behalf of the U.S. when they have knowledge that the government is being defrauded. These citizens are then entitled to collect a portion of any penalties assessed in their case.

The act was originally passed in 1863, during a time when government officials were concerned that suppliers to the Union Army during the Civil War could be defrauding them.

In 1986, Congress modified the law to make it easier for whistleblowers to bring cases and giving them a larger share of any penalties collected. Whistleblowers can now take home between 15% and 30% of the sums collected in their cases. In the cases addressed in the foreclosure settlement, the whistleblowers revealed that banks were gaming federal housing programs by failing to comply with their terms or submitting fraudulent documents.

In Szymoniak’s case alone, the government collected $95 million based on her allegations that the banks had been using false documents to prove ownership of defaulted mortgages for which they were submitting insurance claims to the Federal Housing Administration.

The FHA is a self-funded government agency that offers insurance on qualifying mortgages to encourage home ownership. In the event of a default on an FHA-insured mortgage, the FHA pays out a claim to the lender.

Szymoniak’s case was only partially resolved by the foreclosure settlement, and she could be in line for an even larger payout when all is said and done.

As an attorney specializing in white-collar crime, the 63-year-old Floridian was well-placed to spot an apparent forgery on one of the documents in her foreclosure case, one she saw repeated in dozens of others she examined later.

“At this point, the banks are incredibly powerful in this country, but you just have to get up every morning and do what you can,” she said.

The other five whistleblowers in the settlement came from the industry side, putting their careers at risk by flagging the banks’ questionable practices.

Kyle Lagow, who won $14.6 million in the settlement, worked as a home appraiser in Texas for LandSafe, a subsidiary of Countrywide Financial. He accused the company in a lawsuit of deliberately inflating home appraisals in order to collect higher claims from the FHA, and said he was fired after making complaints internally.

Gregory Mackler, who won $1 million, worked for a company subcontracted by Bank of America to assist homeowners pursuing modifications through the government’s Home Affordable Modification Program, or HAMP. Under HAMP, the government offers banks incentive payments to support modifications.

Mackler said Bank of America violated its agreement with the government by deliberately preventing qualified borrowers from securing HAMP modifications, steering them toward foreclosure or more costly modifications from which it could make more money. He, too, claims to have been fired after complaining internally.

There’s also Victor Bibby and Brian Donnelly, executives from a Georgia mortgage services firm who accused the banks of overcharging veterans whose mortgages were guaranteed by the Department of Veterans Affairs, thereby increasing their default risk. Bibby and Donnelly won $11.7 million in the settlement; their attorneys did not respond to requests for comment.

Shayne Stevenson, an attorney who represented both Lagow and Mackler, said the two weren’t aware of possible rewards when they first brought their evidence to his firm.

“The reality of it is that most of the time, whistleblowers don’t even know about the False Claims Act — they don’t know they can make money,” Stevenson said. Both his clients, Stevenson added, “just wanted the government to know about this fraud, so they deserve every penny that they got.”

A Bank of America spokesman declined to comment on individual cases, but said the national settlement was “part of our ongoing strategy to put these issues, particularly these legacy issues with Countrywide, behind us.” BofA acquired mortgage lender Countrywide in 2008, thereby incurring the firm’s legal liabilities.

The other banks involved either declined to comment or did not respond to requests for comment.

Related: Foreclosures spike 9%

While the whistleblowers in the settlement scored big paydays in the end, the road wasn’t easy. Stevenson said his clients “were pushed to the brink” after raising their concerns, struggling to find work and beset by financial problems.

“They were facing evictions, foreclosure, running away from bills, trying to deal with creditors that were coming after them,” Stevenson said. “This went on and on and on, and this is part and parcel of what happens to whistleblowers.”

For Robert Harris, a former assistant vice president in JPMorgan’s Chase Prime division, the experience was similar.

Harris accused the bank of failing to assist borrowers seeking HAMP modifications and knowingly submitting false claims for government insurance based on wrongful foreclosures. He was stymied when he tried to complain internally, and says he was fired for speaking out.

While Harris ended up with a $1.2 million payout in the settlement, the father of five says he’s been blacklisted within the industry and exhausted by the ordeal.

“It completely turned my life upside down,” he said. “I’m trying to raise my kids, recover from a divorce, recover from the loss of my career — it just comes to down to surviving and putting this to an end.”

“I guarantee the other whistleblowers, too, have sacrificed a lot,” he added. “But to be able to sit back and sleep at night is worth it.”


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18 Responses

  1. […] Read more… Posted in Banks, MERS, News Around The Country, States « Foreclosure Strategists-Meeting Tuesday-AZ Legislative Update & Case Review & CA Bill of Rights Passes It’s over for the banking cabal. 4.jul.2012 » You can leave a response, or trackback from your own site. […]

  2. Oh, I dunno….I went straight to my local FBI office in 2004 and told ’em mortgage fraud was rampant, gave ’em names, dates and places and they told me I was the first insider to come forward. A month later, Mueller went to Bush and told him the same thing verbatim. Didn’t do shit for me.

  3. Thanks for posting that Spitzer video, Abby…stunning…but not surprising.

  4. @Abby,

    All the banks were asked to write their “living will” as a result of Dodd-Frank. The only exciting thing is that, after dragging their feet for 2 years, they now can’t refuse nor postpone any longer. Means very little right now though. What will mean something is when they come to arrest Jamie boy, the Stumpf and even Blankfein who just resign. Until that happens, it is a tad premature to jump up and down. But it’s coming…

  5. HAPPY 4TH EVERYBODY!! LET THE FIREWORKS BEGIN!

    AND HAVE YOU SEEN THIS?

    http://youtu.be/1UG8RowZcks

  6. CHASE WRITES ITS LIVING WILL—DOES IT EXPECT TO DIE?

    http://www.scribd.com/doc/99131030/IS-CHASE-GOING-DOWN-LIKE-ENRON-HERE-IS-IT-S-LIVING-WILL-JULY-2012

  7. @Pie,

    Somehow, I really believe we are nearing the end for the banks as they exist. As soon as BRICS finalizes its own currency based on gold), the entire market based on the dollar will be taken over. it is even especially true if/when we realize that, unlike the other existing blocks, Eurozone included, the US has no gold at all or not enough to sustain its money.

    Oncve the dollar is written off, the US will have to start conducting business in someone else’s currency, which means that the US will have to comply with someone else’s rules and regulations.

  8. @ eTolle
    I have written my senator Johnny Isakson as well as Saxby Chambliss. Isakson never responds, Chambliss has an aid send some canned crap rubber stamped no less, that has nothing to do with what I asked in my letter. Attorney General Sam Olens doesn’t respond, and won’t acknowlege that I told him he’s out of there come election time. Here are some highlights from my seven page letter to Chambliss;

    You better decide now which agenda you’re serving, the clinically insane elitist murderers or the Americans you were elected to serve, who’ve paid your salary with our tax dollars. We will know by your vote on the upcoming trade bills whether we need to demand your resignation during the sweep next year when the criminals and liars lose their jobs. Maybe you better get all your money out of the stock market now, while you still can, and start protecting the interests of those who trusted you instead of those who pad your pockets to buy your vote. We aren’t taking any more bullshit, and we’re watching how you vote, Saxby. Start looking for a new job, if you aren’t going to do the right thing by this one. Perhaps the bankers will hire you. Will you be of any use to them without your senate seat?

    Those who’ve planned to enslave the entire planet through ridiculous debt and fear mongering will see the end of their reign, shortly. If I find that you are part of the problem by your voting record on the trade bills, I will ask you to do the right thing and resign immediately. This is an opportunity for you to save face, before you are forced out of office in shame. If I were you, I would move to Ecuador with all the CIA operatives who’ve already fled. Traitors have no place in America, and you are a traitor who put his own financial interests over those whose interests you were sworn to serve. Your word is no good now that you have shown what you truly are, an opportunist with a price tag.

    The arrogant, evil, self serving bankers should be very afraid, and the bought and paid for politicians they used to achieve their present status should be more afraid. You’re at a crossroads, here; hopefully you choose to fight with the moral side, true patriots and lovers of freedom and liberty, not those evil, corrupt murderers in our cross hairs. If you choose to vote their agenda, start looking now for a new job, because you won’t get one in government again. There will be no more given to beast servers.

    Nora Claypool,
    Holder of constitutional rights to freedom, liberty, and prosperity willing to fight for them.

    This was a seven page letter!

  9. Bank reform starts with indictments, and since that won’t happen, we can no longer anticipate reform. It is time to shut them down and the peoplestill have the power to do that. First we ballot out a referendum on the ticket to end fed liquidity programs through reverse repos and we shutter Citi and Bac in the process. Next we turn our attentions to US BANK, Chase, Wells and GS.

    We short the hell out of their stocks and then transfer all illiquid assets to other smaller banks. We than short their stocks again so they cannot raise private capital and we have our pension funds and personal bank deposits yanked. We must cut off their access to funds from the master bank in dc first.

  10. Lynne- can you send someone up to Ossipee N.H. to help the County Sheriff uncover the fraud? He is looking for volunteers.
    We have
    a Sheriff that gets it. Lets give him the ammo he needs folks!

  11. Why can’t we do that here?
    Then again, if we start arresting people for bribery, there ain’t gona be one official left in this country…!

    Let’s go for it!!!!!!!!!!!!!

    http://www.bbc.co.uk/news/world-europe-18693321

    3 July 2012 Last updated at 13:00 ET

    French police search Nicolas Sarkozy home and office

    The allegations relate to the financing of Mr Sarkozy’s 2007 election campaign Police have carried out searches of the home and offices of former French President Nicolas Sarkozy as part of a campaign financing probe.

    A law firm in which Mr Sarkozy owns shares was also searched, reports say.

    The investigation is related to allegations that Mr Sarkozy’s 2007 presidential election campaign received illegal donations from France’s richest woman, Liliane Bettencourt.

    Mr Sarkozy has previously denied all wrongdoing.

    He is currently in Canada with his family, his lawyer, Thierry Herzog, told the AFP news agency.

    In presidential elections in May, Mr Sarkozy lost to Socialist challenger Francois Hollande, and his presidential immunity from prosecution ended on 16 June.

    Tens of thousands of euros were allegedly funnelled to Mr Sarkozy’s campaign by Ms Bettencourt’s office.

    Individual campaign contributions in France are limited to 4,600 euros ($5,800).

    “These raids… will as expected prove futile,” Mr Herzog said in a statement.

    ‘Lies and calumny’

    An investigating magistrate is looking into claims that staff acting for the L’Oreal heiress Liliane Bettencourt, gave 150,000 euros in cash to Mr Sarkozy’s aides during his 2007 bid to become president.

    Ms Bettencourt’s former accountant, Claire Thibout, alleges Mr Sarkozy’s campaign treasurer – Eric Woerth – who later became his budget minister – collected the cash in person.

    In addition, there are other witnesses who allege that during the 2007 campaign, Mr Sarkozy made several private visits to Ms Bettencourt’s home.

    But Mr Herzog has said that Mr Sarkozy’s detailed diary, from the time he was interior minister and accompanied everywhere by police officers, will prove that claims of him attending those meetings were “materially impossible”.

    Eric Woerth is already under criminal investigation.

    The charges in his case relate to claims he had used his influence as a minister to secure France’s highest award, the Legion d’honneur, for Mrs Bettencourt’s financial manager.

    But as yet he is not under criminal investigation for the wider allegation of illegal campaign financing.

    The former president has condemned the allegations he is facing as “lies and calumny”.

  12. Getting more and more “rocambolesque” by the minute.

    Jamie boy is officially on his way out, even if he doesn’t know yet… They all are. Once everyone and everything has been sued for every penny they’re owed, wealth should be adequately redistributed.

    people, file something. Get your case into a court and press for the respect of your rights and for redress. We’re owed that much.

    JP Morgan Treated Its Retail Investors as Stuffees, Accused of Lying in Marketing Materials http://www.nakedcapitalism.com/2012/07/jp-morgan-treated-its-retail-investors-as-stuffees-accused-of-lying-in-marketing-materials.html Tuesday, July 3, 2012
    JP Morgan Treated Its Retail Investors as Stuffees, Accused of Lying in Marketing Materials

    It appears that, to the extent Jamie Dimon’s “fortress balance sheet” claims are valid, some of strength results from taking liberties with customers in ways that even other big financial firms shun.

    One long standing bad idea on Wall Street has been to have a retail brokerage operation along with in-house mutual funds. The business model always assumes that the retail brokers will happily sell lots of the firm’s funds to their customers. That’s usually a bad assumption. The internal funds seldom perform better than the products sold by other players. And the most successful brokers (the ones who have clients with large portfolios, who typically trade stocks) often are effectively independent businessmen under a big firm umbrella. If they were to leave the firm, they’s take most of their accounts with them. That puts them in a position to ignore firm pressures and bribes to put their client into so-so or bad products. That means it falls to the middling and newbie brokers to take up the slack. And like it or not, there are only two outcomes possible: either the brokers treat their clients to a greater or lesser degree as stuffees, or the funds languish. And since mutual fund profitability is correlated with the size of the fund, the bank has strong incentives to ride the brokers to push their product.

    This has been a recognized conflict of interest for decades; I’d hear it come up often on studies back in the stone ages when I was at McKinsey. A story tonight in the New York Times’ Dealbook points out that most banks have finally recognized the folly of their ways. The ones that have in-house brokers have largely exited the in-house mutual funds business….except JP Morgan. According to the Times:

    JPMorgan, with its army of financial advisers and nearly $160 billion in fund assets, is not the only bank to build an advisory business that caters to mom and pop investors. Morgan Stanley and UBS have redoubled their efforts, drawn by steadier returns than those on trading desks.

    But JPMorgan has taken a different tack by focusing on selling funds that it creates. It is a controversial practice, and many companies have backed away from offering their own funds because of the perceived conflicts.

    Morgan Stanley and Citigroup have largely exited the business. Last year, JPMorgan was the only bank among the 10 largest fund companies, according to the research firm Strategic Insights.

    The article details how JP Morgan brokers are pushing clients into stock funds (which have higher fees than bond funds) at a time when investors are generally leery of the product. In general, studies of fund performance find that only funds in the top 10% of performance tend to hold on to outperformance over time; top quarter performers, by contrast, show a lot of rotation. JP Morgan has only a few top funds; for their funds overall, 42% fail to beat the averages for their strategy. This might not be so bad if JP Morgan weren’t pushing its brokers to place investors in internal funds above the alternatives. Some quotes from former brokers:

    “I was selling JPMorgan funds that often had weak performance records, and I was doing it for no other reason than to enrich the firm,” said Geoffrey Tomes, who left JPMorgan last year….

    “It said financial adviser on my business card, but that’s not what JPMorgan actually let me be,” said Mathew Goldberg, a former broker who now works at the Manhattan Wealth Management Group. “I had to be a salesman even if what I was selling wasn’t that great.”

    This isn’t merely the view of some disgruntled brokers. JP Morgan settled an arbitration case for $373 million for giving preferential treatment to its own funds, even though it had a contract to promote the funds of American Century.

    On top of that, even if the funds have decent performance before fees, it’s unlikely they will on a net basis. JP Morgan charges an asset management fee of as much as a whopping 1.6% of assets, while freestanding brokers typically levy 1%. It also double dips, charging both the asset management fee and the fee on the underlying funds.

    That’s all bad enough, but it still falls in the realm of “caveat emptor,” in that fees are disclosed and anyone who signs up for super-normal charges for an at best ordinary product is asking for underperformance. What is worse is the way JP Morgan plays fast and loose with disclosure:

    With one crucial offering, the bank exaggerated the returns of what it was selling in marketing materials, according to JPMorgan documents reviewed by The New York Times….Marketing materials for the balanced portfolio show a hypothetical annual return of 15.39 percent after fees for three years through March 31. Those returns beat a JPMorgan-created benchmark, or standard of comparison, by 0.73 percentage point a year.

    The actual return was 13.87 percent a year, trailing the hypothetical performance and the benchmark. All four models with three-year records were lower than the hypothetical performance and the benchmarks.

    JPMorgan says the models in the Chase Strategic Portfolio, after fees, gained 11 to 19 percent a year on average since 2009. “Objectively this is a competitive return,” said Ms. Shuffield.

    What ballsy double speak! The model performance is not the issue, it’s the use of model returns that by happenstance considerably overstate results.

    Now in case you’d like to argue this sort of behavior is an outlier at JP Morgan, consider the experience of a client at the other end of the food chain, Len Blavatnik, one of the 100 wealthiest men in the world (and a one-time client of mine when he was much less rich and had made a rather oddball investment in the US). His industrial empire, Access Industries, had about $1 billion in cash in various pockets that they decided to manage to get a little bit extra return. And mind you, their objectives were modest. They merely intended to beat Treasury bills by a smidge. They set out their investment criteria, which stressed “conservative” and “liquid”. The agreement that they reached with JP Morgan also set maximums as to how much could be invested in various types of assets.

    Joe Nocera summarized what happened:

    JPMorgan invested part of the $1 billion in triple A tranches of mortgage-backed securities. It also invested some of the money in triple-A tranches of securities backed by home equity loans. Sure enough, beginning in July 2007, those securities began to decline in value. The Access executives began to call the investment manager at JPMorgan, worried about the mounting losses.

    “Our research team still is extremely confident that AAA Home Equity asset-backed securities are money good, meaning that over time you will get the entire amount of your principal back,” responded a JPMorgan executive in an e-mail, according to a complaint later filed by Access.

    This, of course, is not exactly how things turned out. In April 2008, when Access finally withdrew its money from JPMorgan, the account had lost around $100 million. After trying — and failing — to negotiate a settlement, Mr. Blavatnik sued.

    I’ve read the claim and spoke with Blavatnik and his general counsel late last year. They say that what they had gotten so far in discovery, despite considerable foot dragging by JP Morgan (and serious lawyering up, the bank put three big ticket firms on the case) was making them disinclined to accept much less that full compensation for their losses. But they also said that JP Morgan’s strategy was clearly to run out the clock as long as possible and to make the fight expensive for Blavatnik. And remember, he’s not just one of the biggest wealth management clients in the world, he’s also an active buyer and seller of companies. So if someone at this level will be abused by JP Morgan, who is safe? Certainly not you and me.

  13. This was sent to me, and explains false default for those of you who still don’t get it:

    “I have the proof that subprime is only collection rights. No prior loans paid off by subprime refinance (and some new purchases) — because all that survived was collection rights from GSE documented (false) default.

    The key is, that I did not sent the government agencies this info — THEY SENT IT TO ME!!! My SEC securities investor fraud “tip” was forwarded from the SEC to the OCC. When the OCC got the referral from the SEC, they researched… and THEY tell ME my Freddie Mac (of 10 years ago) was never paid off by me and is in DEFAULT!

    What the OCC did not bank on is that I have the canceled check!!! Highly unlikely after 10 years that anyone has the canceled check, but I HAVE IT. And, I have my payment canceled checks too. When I told the OCC (after they told me that I am in default) that I have the canceled check, they went DEAD silent. They did not know what to do. They were dumbfounded.”

    Wake up, Neil.

  14. This is just hush money. I assume Lynn S. can’t delve any deeper now that she’s been paid off. If Dr. Lan Pham hadn’t been fired she could have been the biggest whistleblower of all—but, we just can’t have the WHOLE fraud revealed—only enough to make the sheeple think that there is some effort to “make things right”…nothing more to see here…move on!

  15. Music to my ears. JPM was guilty of price fixing too. So are many more banks (from what I read, about 40 in all). I know that I know that I know that we are on the right track.

    In the meantime, no electricity, no cable, no AC, still cleaning up tress fallen around my house after Friday’s 80-miles-an-hour winds. Yeppeee! So, I shall be a tad scarse for a few days.

    Barclays not alone in rate-fixing scandal
    By Maureen Farrell @CNNMoneyInvest July 3, 2012: 10:13 AM ET

    Barclays is the first bank to settle with regulators as part of an interest-rate manipulation investigation.

    NEW YORK (CNNMoney) — Heads have rolled at British bank Barclays. But it was not alone in manipulating worldwide interest rates.

    Barclays (BCS) chairman Marcus Agius resigned Monday and CEO Bob Diamond followed suit Tuesday. Later Tuesday, Chief Operating Officer Jerry del Missier resigned effective immediately.

    PrintCommentThey may be just the first of many executives felled by a broader probe into interest rate manipulation by big banks.

    Seven additional banks are cited but not named in documents made public as part of Barclays’ settlement last week with the Financial Services Authority, the British banking regulator.

    Barclays was fined roughly $453 million by the FSA, Commodity Futures Trading Commission and the U.S. Department of Justice.

    Related: Barclays agrees to pay $453 million
    The pushback from Barclays’ shareholders and regulators in the U.S. and the United Kingdom has been swift. But the investigation of the manipulation of global interest rates has been going on for four years — and it is not over yet.

    “This dwarfs by orders of magnitude any financial scams in the history of markets, said Andrew Lo, a professor of finance at the Massachusetts Institute of Technology.

    Deutsche Bank (DB), Royal Bank of Scotland (RBS), Credit Suisse (CS), Citigroup (C, Fortune 500), JPMorgan Chase (JPM, Fortune 500) and UBS (UBS) are among the banks that have acknowledged that they are being investigated by regulators.

    Bank of America (BAC, Fortune 500) is also reportedly being investigated. But the bank has not made any public statements about the scandal, and a spokesperson declined to comment.

    “There’s nothing in the documents that show that this is unique to Barclays,” said Arun Subramanian, a partner with the law firm Susman Godfrey, the lead counsel to a class of plaintiffs suing Barclays and other banks for damages resulting from the changes in interest rates.

    The FSA said it gave Barclays a 30% discount on its fines for settling quickly.

    “The question is whether Barclays’ announcement came first because they were the ringleaders or the most cooperative,” said Owen Watkins, a former regulator at the FSA and a partner at the London law firm Lewis Silkin.

    Floating interest rates are set through a peculiar process that largely relies on word of mouth from traders at up to 18 representative banks.

    0:00 /4:37Bank stock cage match
    The key floating rate is the London Interbank Offered Rate, or Libor, and it serves as a global benchmark for home mortgages, student loans and what cities and states pay to borrow money. It affects up to $800 trillion worth of financial instruments.

    Barclays and other banks altered those costs when reporting them to regulators, according to documents field with the FSA. They worked in conjunction with other banks to move these rates in directions that helped the banks benefit from trading positions, according to FSA documents.

    According to the damning emails and text messages filed as part of Barclays’ settlement with the FSA, one email from a Barclays’ employee sent in October 2006 asked “an external trader” to set the three month LIBOR rate lower.

    When it moved lower the next day, a trader from another bank wrote to a Barclay’s trader: “Dude. I owe you big time! Come over one day after work and I’m opening a bottle of Bollinger.”

    While the regulatory investigations are ongoing, several plaintiffs are waiting for a judge in the Southern District of New York to rule on whether a case for potential damages arising from LIBOR manipulation can move forward. The city of Baltimore is the lead plaintiff in this case.

    Meanwhile, Diamond won’t be celebrating like other Americans on Independence Day. On Wednesday, he’ll be answering questions from British lawmakers about the scandal.

    First Published: July 3, 2012: 8:13 AM ET

  16. Exactly Jim, and the crimes go on unabated. Screw all the “audacious plans” that further the criminality. How long are we all willing to participate in group plans or fixes that benefits those at the top at the expense of the rest of us? Why should we continue to be a part of the meme replication, or better put, the telling of tall tales as to how we got here and how we can get out of the crime of all time?

    We all know that the entire economy was brought down by the very same entities who we would be dealing with in the above scenario; the criminals who exist both in finance and their counterparts in regulation, and they would both be rewarded through this process by our government with our agreement. Why should we trust any of the above shady entities to do the right thing? And how do we pay their adjusted and modified usury when we’ve all lost our incomes due to their criminality?

    Write all those people who pretend to represent us and tell them enough is enough. The constant repetition of acts of criminal theft perped by the financial industry, followed by resignations with bonuses and no admissions of wrongdoing are robbing us all blind, all the while resulting in further grafting the very same white shoe law firms that many of these government hacks hail from. The criminals then further the transfers of middle class funds through class action or state settlements or that do little to benefit the victims of the criminality. Think Holder and Breuer here. We all know they’ll unceremoniously slink back to C&B after they’ve done their appointed tasks at DOJ, reaping the huge rewards that come from selling out America.

    Extrapolate that same formula out to include pharmaceuticals, subsidized toxic agriculture, municipal bid rigging, fracking, LIBOR skimming, just to name a few. All these thefts are painted as simply being the way business is done in this modern era. We need to tell our so-called reps that they will be lumped in with these criminals and tossed into a cell when the rule of law is re-established. And it will be. Daily atrocities like the following will no longer be tolerated.

    U.S. Bank has agreed to pay $55 million to settle lawsuits claiming it manipulated overdraft fees on debit card transactions. The plaintiffs claim that U.S. Bank’s computer system reorganized customers’ debit card and ATM transactions from high to low dollar amounts as opposed to when the purchase was made, resulting in customers being charged overly high overdraft fees.

    “….the latest to settle claims in the mass of litigation over excessive overdraft fees involving more than 30 banks, including Wells Fargo. About 13 banks have agreed to settle so far, including Bank of America, whose $410 million settlement was approved last year.

    TURN THE HEAT UP ON OUR GRAFTED OFFICIALS; THEY ARE ALL IN ON THE THEFT, EITHER AS PLAYERS OR AS ACCESSORIES! THEY MUST BE STOPPED!

    Speaking of whistleblowers, the fact that Angelo Mozilo testified against a whistleblower recently and wasn’t on a stand defending himself against crimes-against-humanity that should have him facing life in prison is the coin theft that breaks the too big to fail concept.

    TAKE THE TIME TO WRITE YOUR GRAFTED OFFICIALS DEMANDING AN END TO THE ERA OF AIDING AND ABETTING FINANCIAL CRIMES!

    Only by letting them know that the whole world is watching will we be able to shut these financial rapists and their empires of destruction down. We need a debt jubilee and a massive prosecution of the criminals if we want to fix this mess. Nothing short of that will do. Death to Wall Street!

  17. The govt doesn’t concede there is any fraud

    So why is she getting paid to point out the emperor had no clothes.

    She gets an obscene payout and millions of us remain homeless. That’s life in the good ole USA

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