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Saturday, July 14, 2012

NY Times: Possible Criminal Charges in LIBOR Scandal (but don't hold your breath)

Blogman's Notes: Though there is talk of criminal charges in the LIBOR case, and there likely will be some, but in the end nothing will come out of it. At best a few executives may be given Club Med jail sentences or fines that will be totally out of proportion for the criminal activity that has defrauded every person on the face of the planet. These banksters have been engaged in the largest bank heist in history involving figures that are beyond the comprehension of even the bankers that are executing the fraud. The sums are so huge that the majority of people would never believe such an audacious crime is even possible! In the mind of the masses, the bankers could never get away with it; the authorities would never allow it! However the very reason that the banksters do get away with it is that the authorities, both the politicians and the regulators, are themselves participating in the fraud; without their active participation, such fraud would never be possible! The banksters are well aware that the politicians and regulators can never expose the extent of the crime for fear of implicating themselves, so they can be counted on to cover up these crimes and give the real criminals like Jamie Dimon of JP Morgan a get out of jail free card. Sure there will be a great deal of jawboning by the politicians, how the perpetrators have to be held accountable etc. etc., and much grandstanding by the regulators like the CFTC and the SEC that have actively and provably acted as gatekeepers to prevent any substantative investigation into the blatant crimes of Wall Street and The City, the city of London, that is! So I'm sure that there will be much hoopla about the LIBOR fraud but it will be a carefully choreographed drama that through sleight of hand will hide the real criminals and point the finger at patsies like Lee Harvey Oswald in the Kennedy assassination! If there was a real effort to bring the culprits to justice, then the present and past denizens of the White House and 10 Downing Street would not escape justice! The odds are greater of the Sun rising in the West tomorrow than of any meaningful investigation and criminal charges in the case of the crimes of Wall Street and its European counterparts! Don't hold your breath! We are witnessing another Iran-Contra type made for TV drama, and in the end the criminals will be seen as heroes and go on to hold public office, maybe even become Presidents and Prime Minsters! Who said crime doesn't pay?

The [Justice Department]’s criminal division is building cases against several financial institutions and their employees, including traders at Barclays ... The prospect of criminal cases is expected to rattle the banking world and provide a new impetus for financial institutions to settle with the authorities. The Justice Department investigation comes on top of private investor lawsuits and a sweeping regulatory inquiry led by the Commodity Futures Trading Commission.

The multiyear investigation has ensnared more than 10 big banks in the United States and abroad. With the prospects of criminal action, several firms, including at least two European institutions, are scrambling to arrange deals ...

According to people briefed on the matter, the Swiss bank UBS is among the next targets for regulatory action. ...

in April 2008, a senior enforcement official at the Commodity Futures Trading Commission, Vincent McGonagle, opened an investigation. ... At first the case stalled as the agency waited months to receive millions of pages of documents when Barclays pushed back ... By the fall of 2009, the trading commission received a trove of information, providing a broad view into the wrongdoing.
The questionable reliability of LIBOR was widely discussed in early 2008 - and iwe are finally seeing fines and possibly criminal charges. 

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