How the SEC Is Used by Wall Street Brokers to Deceive the Courts, the Public and the Legal Community

The question is related to whether the SEC had undertaken any analysis of supposedly exempt MBS certificates. It is obvious that it has not done so. The agency has taken a position that is contrary to express factual and legal findings in thousands of court cases, administrative proceedings, and settlements. Such certificates are only exempt if they are in fact mortgage-backed pass-through certificates that allow payments from homeowners to flow to investors who buy them. It is an undeniable fact that this is not what is happening and not what Wall Street brokers ever intended.

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Astonishingly if you ask any attorney representing any party claiming to have rights to foreclose on homeowners’ property, they will either evade answering or they will admit they have no clue as to whether the loan account exists or who owns it. Yet they persist in attempting to foreclose because they can. But the way they can is partly due to weaponizing a simple practice granted to people and companies on the SEC’s website.

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The certificates are not mortgage-backed. In addition, there is no pass-through legal obligation to pass payments from homeowners to investors. Instead, certificates are an unsecured discretionary IOU from an investment bank — i.e., “REMIC” certificates are securities that are not exempt from registration requirements and should be regulated by the SEC. The SEC is an agency that has failed to drill down to the facts and has proceeded instead on false assumptions. 
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The SEC is the primary source of misinformation about the origination and acquisition of homeowner transactions and the creation, issuance, sales, and trading of securities that are not exempt from registration or regulation. Instead, the SEC has become the primary vehicle for the dissemination of false information by allowing login credentials to individuals and companies to upload documents to http://www.sec.gov and then download them with the website URL in the header — thus giving the false impression that the document is a government document or that it has been processed by a government agency. 
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This practice has been utilized to present false self-serving documents that are treated as facially valid, authentic representations of transactions that in fact have never occurred nor were they ever intended to occur. 
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Both the SEC and the IRS have made erroneous assumptions causing widespread moral hazard and loss to investors, homeowners, and the government (in loss of tax revenue). The SEC is the focal point because that is the agency with the knowledge and resources to make administrative findings as to the certificates that are issued as if the issuer was a REMIC trust. In fact, the REMIC trust name is only a label used by the investment bank to issue discretionary unsecured promises to pay by investment banks. 
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The failure of the SEC to properly regulate and investigate this has resulted in a near-universal and erroneous consensus that the 2008 Recession was caused by risky behavior instead of illegal behavior. Such behavior is a continuing scheme. This Federal agency (SEC) is contributing to a myth that the transactions with homeowners were loans, that an underlying obligation was created, and that the underlying obligation was sold in pieces to investors who receive the proceeds of scheduled payments from homeowners and from foreclosures. In most cases, this is patently untrue, as shown in thousands of court cases. No “loan” was sold to anyone, much less to investors who owned shares of loans.
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The SEC is uniquely suited to correct the misinformation scheme. As it odes with all investigations of public offerings, it could analyze the actual flow of money and the intended flow to determine if the issuance is one that the SEC can and should require registration and regulation.
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There is a simple fact that could be investigated without any material expenditure of resources: at the end of the claimed securitization” cycle, there is no loan account receivable owned by any creditor. Accordingly, all representations and implied representations to the contrary are false and known to be false and are meant to deceive investors, the courts, homeowners, and the legal community. At the very least the SEC should stop any practice in which its websites used to propagate false narratives about the so-called securitization of residential debt.
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Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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2 Responses

  1. We all know what’s going on here, and we all know that all the regulatory agencies, as well as all relevant government departments, also know what has gone on and is still going on, and that it is all illegal.
    And we also have knowledge that crimes have been committed, how the crimes have been committed, and who committed them.
    So we know about huge ongoing crimes. Does that make us all accomplices, enablers, co-conspirators? Not sure, but it sure seems like we are culpable and legally accountable by allowing such crimes to be committed, with such devastating effects to others as well as ourselves.

    I think what we should do is the following;
    1. Go to the local IRS office
    2. Tell them you are distraught and unable to sleep due to your involvement and overwhelming guilt in failing to bring these crimes to the appropriate authorities. Tell them you are willing to be either a witness or a confidential informant for the prosecution.
    3. Explain to them that the people involved in this have cheated the government out of trillions of dollars,thereby decreasing the money available for small children, widows, orphans, and veterans. As a result you have been so depressed and guilt stricken that you are willing to accept any imprisonment for your part in this horrible fraud.

    You go first: let me know how you make out.

  2. Neil, this biggest crime against humanity and giant LIES are promoted by the Government: SEC, CFPB, Courts, ect

    They ALL know about that is going on. And they ALL cover up for it due to enormous corruption in all public offices.

    I sent SEC hundreds letters demanding explanations re non-existing REMIC Trust GSAMP 2006FM1.

    SEC kicked me though their regular runaround circle – to CFPB who closed all my complaints; or ignore completely.

    Without Government’s cover up particularly by Courts Wall Street Bank would not be able to commit this crime.

    Why no single Judge asked for a sworn statement from a TRUSTEE as well as such basic question – where Trust who supposedly “pass through” payments from borrowers to investors is located and registered? and a proof of CURRENT registration?

    I asked Judge Senechalle many times -he just threatened me from the bench for asking inconvenient questions.

    Why Judges do not require to file a receipt of distribution of funds after forced sales of family homes and releases of liens (if any?)

    In which STATE this REMIC Trust pay their taxes? I sent this question to IRS. Zero respond,as expected.

    And how this Trust can accept any assignment of anyone’s loan if it does not exist? WHY in this Trust is responsible for such “acceptance”? a Trust at large? or someone in person?

    Since Judges don’t care about the law, I am sending Neil’s articles to crime victims whose homes are scheduled for sale; as well as to realtors who sell foreclosures and advise them that they are selling stolen properties.

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