If the media and financial services industry ever needed more evidence about why investor confidence in the financial system is so low, they do not have to look far.
The U.S. Justice department today said that six banks will be forced to plead guilty to price fixing and anti-trust violations in the foreign currency markets. Plus, earlier cases against other major banks concerning price fixing in the LIBOR also show that aside from the expensive suits and large expense accounts, global banking can teach people running underworld money laundering operations some new tricks.
Here is the news from CNBC about today’s Justice Department announcement:
“The Justice Department is preparing to announce that Barclays, JPMorgan Chase, Citigroup and the Royal Bank of Scotland will collectively pay several billion dollars and plead guilty to criminal antitrust violations for rigging the price of foreign currencies, according to people briefed on the matter who spoke on the condition of anonymity.” UBS is also going to be named, according to the same report.
CNBC correctly notes that if this happened to an individual they would be in for an entirely different set of penalties. But since courts have ruled that corporations are people, the Justice Department announcement does not mean these criminal banks will suffer the same penalties as an individual criminal. That’s because all the banks have to do is pay a fine and go on as if nothing ever happened. It’s also worth noting that
these criminal acts started about a decade ago, so not only does justice move slowly, it also gives the criminals plenty of time to hide the evidence and prepare their defense and impressive lobbying efforts in Washington.
In this way, the American public will not see that these institutions are tainted and criminal. Bank tellers, mortgage officers and in-house financial advisers will never mention these criminal penalties to their unsuspecting customers, even though they were likely all victims in some way of their friendly bank’s crimes. While stealing money from price fixing is very profitable, and has already been converted many times over into lucrative bonuses for all those who engaged in the criminal acts, the banks get a pass since they don’t get any public recrimination. Even the Puritans in the 1600s had a better practice about letting their fellow citizens know that one of their own has become a criminal.
Hushing Up Criminal Problem at Banks
And if the financial media follows their current pattern, this news will be minimized and treated as an isolated incident, unrelated to consumer finances, the investment markets, and returns on 401(k) and pension plans. Of course that is not the case, since the financial media is not very good at showing how financial conspiracies affect individual investors. Instead, they would rather speculate about the Fed’s next interest rate move, bond yields, or some overvalued tech offering.
Then, financial advisors also help push this under the rug by saving these banks are the cornerstones of investment management and that their products are be beyond reproach, especially if the advisor is being paid revenue sharing or 12b-1 fees.So if you want to read another great story about criminal banks, pick up a copy of Harpers April 2015 issue, and read the article by Alexander Cockburn, “Saving the Whale, Again,” about the criminal and political activities of Citigroup.
This bank has an “unprecedented” presence in the Obama administration and boasts of seven top-level bankers as holding key policy positions inside the Obama White House, according to Senator Elizabeth Warren.As other articles on this site have shown, there is a definite pattern of global financial criminal activity here that is being encouraged by Republican efforts to de-regulate banks, gut the Dodd-Frank Act and Consumer Financial Protection Bureau and repeal any minor attempts for reform. All this is being done simultaneously as Republicans push to change the American retirement system so more average people will cut their standard of living after retirement.
So does anyone wonder why investor confidence is declining? More importantly, is there any reason why it should be increasing?
