The message is enforcing the rule of law. Fraud on a massive scale was committed by Wall Street banks and no one has gone to jail. The Federal Reserve has broken the law in funneling taxpayer funds to these criminal banks. No one has gone to jail. Until criminals are treated like criminals, the population will get angrier and more resistant to the government.
Occupy Wall Street does have a clear message
Commentary: A call to recognize the crimes of High Finance
By David O. Friedrichs
SCRANTON, Pa. (MarketWatch) — The Occupy Wall Street protesters in New York City and now in countless other cities and on numerous campuses as well have it right: the current architecture of our political economy is not sustainable, going forward.
The vast economic inequities promoted by Wall Street and the corporate world are immensely harmful to countless millions of people, and to the well-being of our country itself. The financiers whose massively fraudulent activities played a key role in taking our economy over the side of a cliff have not been held accountable for their crimes.
David O. Friedrichs
What are the Occupy Wall Street protesters seeking? Critics of this endeavor claim that there is a lack of a clear focus, agenda and strong leadership. But the overall message of the protesters is crystal clear and hugely important: we all need to become broadly conscious of what is wrong with our present political economy, and we have to promote the political will needed to transform it in fundamental ways.
Will this call for fundamental transformation be successful? If not in the days immediately ahead, it will surely establish a foundation for the inevitable coming together of all the different elements necessary for a fundamental transformation to occur. History is full of surprises, but sooner or later unsustainable political economies collapse, and something new — and in the best case scenario something fairer and far more sustainable — emerges.
Do the activities of the financial sector epitomized by Wall Street have some productive effects? Certainly: They raise financing for corporations and businesses, employ people and pay taxes. But the fundamental problem — well-recognized by the Occupy Wall Street protesters — is that the first and foremost priority of Wall Street is to generate obscene levels of wealth and vastly disproportionate compensation packages for a relatively small cohort of people — the 1%.
As a long-standing student of white-collar crime, I am especially attuned to the dimensions of the Wall Street and the corporate world that operate as a form of organized crime. There are many “criminogenic conditions” on Wall Street, in the language of criminology. The compensation and bonus system that rewards upfront getting transactions and securitizations done, regardless of their long-term viability, promotes pervasive fraud and financial misrepresentation.
Although blame for the financial meltdown climaxing in the fall of 2008 can be cast upon many different parties, there can be no question that massive forms of fraudulent conduct and financial misrepresentations on Wall Street played a central role. We now have a whole shelf full of fine books that have documented this, including the way Wall Street investment bankers awarded themselves obscene compensation and bonuses with grotesquely risky and thoroughly toxic investment innovations.
When the investments inevitably collapsed, the American taxpayers were called upon to bail out the banks, to the tune of hundreds of billions of dollars. None of the key guilty parties have been sent to prison; rather, Wall Street almost immediately called for returning to “business as usual,” has aggressively contested relatively modest new regulatory initiatives, and has altogether done well for itself while much of the balance of the economy and the American people continue to suffer.
We need to recalibrate our criminal justice system to accord a much higher priority to addressing white-collar crime, while maintaining appropriate responses to conventional crime.
There is a vast amount of anger, frustration, and fear among ordinary people across the globe. Young people, including some of my bright, hard-working college students, are justifiably anxious about their ability to pay off their student loans, and about their job prospects and their future overall.
Desperation and a lack of viable alternatives in large part led to the uprisings across North Africa and the Middle East. Here at home, such uprisings have yet to materialize, and populist anger also targets illegal immigrants, unions, bankers and others.
Unless our political leadership recognizes and acts decisively on the compelling need to undertake a fundamental transformation of an unfair political economy into one that meets broad human needs in an equitable fashion, we face a difficult and chaotic future.
David O. Friedrichs is professor of sociology and criminal justice and at the University of Scranton. He is the author of “Trusted Criminals: White Collar Crime in Contemporary Society.”
Mary Malone says:
The MSM did a spectacular job focusing the blame on irresponsible home-buyers when the credit markets collapsed in September 2008.
Let’s be clear..the global credit markets didn’t seize up because home-buyers bought too much house, or insisted on granite counter-tops and walk-in closets they didn’t deserve.
The crisis erupted when it became public knowledge among the elites in global banking and government that there were no mortgages to back mortgage-backed securities.
When the s@#$ hit the fan, the crony capitalists did what crony capitalists always do…they covered up the crime – which was committed among their peer group…and facilitated a billionaire bail-out of epic proportions in the US, Ireland and around the world.
We’ve talked to senior guys in the capital markets whose firms either rated bonds or sold them to investors.
They all thought MBS contained some crappy mortgages – but they never dreamed that there were NO MORTGAGES to well, back securities. Zip, zero, none.
As they began to open the MBS (post 2008) they are learning that the mortgages were not properly tranched as well….
So Americans need to stop beating their neighbors with the moral hazard club, and focus their ire and blame on the crony capitalists who caused and covered up the massive crimes.
The Bad Actors in finance violated::
NY Security Laws
Conspiracy to commit fraud….Colluded to circumvent 400 years of property law (MERS) clouding title on 100 million homes
RICCO
Money laundering (2 sets of books. Proceeds from illegal foreclosure sales parked offshore)
Wire, mail fraud
Fraud, fraud, fraud (Very easy to gain convictions on fraud)
Government cronies like Eric Holder, Paulsen and so many others
-Accessory to the crimes
-Facilitated the cover-up
-Numerous ethics violations, influence peddling etc.
It is imperative that honest men and women in the FBI and other federal agencies take the brave and necessary step to uphold the US Constitution and restore the rule of law. Eric Holder is compromised and your agency has been tarnished.
The Republic cannot wait for a change in administration, or afford to kick the can down the road.
The time to act is now.
Until you do, America is a no longer a nation of laws, but of men.
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24th October 2011 at 12:41 pm
WordMan says:
I watched Inside Job over the weekend and got quite an education. What also was amazing was the incredibly high level of buffoonery that occurred at the highest echelons of the banks and the federal government.
I came away feeling very angry at what happend, not only in this country, but around the world! I’m reminded of what scripture has to say about this in James chapter 5:
Come now, you rich, weep and howl for the miseries that are coming upon you. Your riches have rotted and your garments are moth-eaten. Your gold and silver have corroded, and their corrosion will be evidence against you and will eat your flesh like fire. You have laid up treasure in the last days. Behold, the wages of the laborers who mowed your fields, which you kept back by fraud, are crying out against you, and the cries of the harvesters have reached the ears of the Lord of hosts. You have lived on the earth in luxury and in self-indulgence. You have fattened your hearts in a day of slaughter. You have condemned and murdered the righteous person. He does not resist you.
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24th October 2011 at 12:58 pm
Smokey says:
WordMan,
Passages from a novel do not represent Absolute Truth, no matter how bad some people may wish otherwise.
Hot debate. What do you think?
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Mary Malone says:
Amen, WorldMan.
I watched Inside Job – we held a screening for local Tea Party – and had similar reaction.
DSK – who had just been arrested for rape – Volker, swilling gin and primping for the camera and a Bush-era Treasury guy lying like a rug…simply repulsive.
These men and women are evil.
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24th October 2011 at 1:10 pm
newsjunkie says:
Well thank goodness the pedophiles are coming to the rescue.
Vatican Calls for Global Oversight of the Economy
http://www.nytimes.com/2011/10/25/world/europe/vatican-calls-for-global-oversight-of-the-economy.html
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24th October 2011 at 1:35 pm
AWD says:
Mary Malone:
Nice little essay. It’s a good start. How can they continue to get away with it? Even when caught, they settle out of court for many millions. Screw jail, there needs to be executions for treason. What they are doing is nothing less than treasonous, plain and simple.
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24th October 2011 at 1:49 pm
Novista says:
Mary M
Excellent comment. OK, we have the sound bite:
“MBS contained NOTHING!”
All those investors complaining about AAA-rated lies only knew part of the truth. They thought the fraud was about bad mortgages misrepresented. What will they do when the learn the real story?
A pig in a poke is one thing, LOL. A no-pig in the poke is, well, the ultimate fraud. It is so elegant that one stands in shock and awe. What could top it?
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24th October 2011 at 7:32 pm
The Watchdog says:
@Newsjunkie,
LOL. You have an inner standup comedian just waiting to get out.
http://comedians.jokes.com/greg-giraldo/videos/greg-giraldo—all-religions-are-insane
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24th October 2011 at 7:48 pm
Mary Malone says:
I really think one of the biggest reasons nobody has been arrested (with the exception of Taylor Bean, who had the temerity to steal TARP $)….is:
-Elites in DC and Wall Street are so closely aligned in the control fraud that if one goes, they all go. So, they are protecting one another and covering up the scheme.
-The scheme was very convoluted. It really makes your head hurt to dive in and learn this stuff. That’s an element of control fraud (William K Black’s theory). So, most people simply don’t bother. They get confused, walk away and think someone else will clean things up.
The trouble is, nobody has stepped up and assumed the burden to clean up the system. It’s always someone else’s job. Why put my career or pension on the line?
That’s why its up to everyday Americans to demand extensive federal investigations, prosecutions and convictions.
We have to be specific.
In 1997, all charter members of MERS (Citi, Bank of NY, Chase, Wells, HSBC, Countrywide, Fannie, Freddie) literally met in a room to finalize a mortgage electronic recording system they knew violated property law in 50 states. They knew that separating the note from the mortgage/deed clouded title on all properties fed into the MERS/MBS maw . Yet, they went ahead with their plan. We have the names of the executives. We have documents that quote them bragging about the meeting. We can meet the threshold needed to indict on conspiracy to commit fraud and mortgage fraud.
MERS was the brainchild of Angelo Mozilo, Fannie and Freddie. What could go wrong? They allowed Angelo to skate on criminal acts in CA – shareholders paid his fine.
But that does not mean Angelo and his friends should avoid federal investigation and indictments.
There are people who will tell you that these crimes were too convoluted to get convictions, it’s just a waste of resources to pursue criminal charges. Better to obtain civil judgments.
Bubkas.
Fraud is one of the easiest convictions to obtain. In law, they have a saying, “You can’t unring the bell.” That means that once the fraud has been committed, it is always there – can’t be erased or eliminated. You just have to know where to look. We know where to look.
We just need a few good men in the FBI to open investigations.
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24th October 2011 at 10:19 pm
Colma Rising says:
Mary Malone:
You are awesome. From your extensive knowledge of the illegal scams to your willingness to give the OWS kids a chance, you’ve proven to be an invaluable commenter here. You cut the shit and get to business.
How did you find TBP?
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24th October 2011 at 10:34 pm
Mary Malone says:
AWD and Novista:
The other reason there have been no federal indictments of crony capitalist is because a crony capitalist heads up the DOJ.
Some background….
Eric Holder was a senior partner at Oovington and Burling, the white shoe law firm from 2000-2008.
MERS was one of the firms’ biggest clients. MERS was the energizer bunny for mortgage fraud.
In 2006, Covington & Burling wrote the legal opinion that justified MERS business model to the mortgage and title industry. This was not some arbitrary opinion released once and filed away. Oh, no. The C&B opinion is included in all marketing materials and industry conference presentations. (it’s posted on Scribd)
So clearly, Holder and all his top DOJ lieutenants, Covington & Burling alumnae all, have a conflict of interest.
Fast forward to September 2008…
The global banking elite learn that there are no mortgages to back mortgage backed securities. They send Paulsen who tells Bush the news. A billionaire bailout of epic proportions is requested and received.
The FBI publicly announces it’s investigating TBTF banks for mortgage fraud.
In January, 2009, Obama is sworn in and the FBI investigations into TBTF go away.
In 2010, the robo-signing scandal (suborning perjury and fraud upon the courts) erupts nationally and DOJ is forced to take action.
Holder announces a mortgage fraud task force called, “Save the American Dream.” Americans are incapable of remembering mortgage fraud task force, apparently.
Anyway, the way it works is…
Holder assigns 120 agents (880 less than were assigned to S&L investigation) to the task force.
The FBI huddles with the SEC, asking for advice and guidance, since the FBI agents are not mortgage or mortgage security experts.
The SEC says, “You need to partner with the Mortgage Banking Association, (MBA).”
Yes, that would be the trade association for all the MERS charter members who conspired to ruin American land title system and cloud title on 100 million homes. It’s also the trade association for the financial firms who never lent one thin dime of their own money to the owners of the homes they are stealing in illegal foreclosures. The same org that represents the interests of banks that are instructing their foreclosure law firms to “recreate” mortgage documents, suborn perjury and commit fraud upon the court.
Is that all?
Nope. Not by a long-shot.
The FBI and the MBA, create a definition of mortgage fraud. It just so happens that their definition does not include mortgage fraud committed by banks.. It focuses on home-owners and flim-flam artists.
So, 120 FBI agents assigned to the task force spend their time investigating borrowers who applied for and received liar and no doc loans. But they don’t investigate the banks that write and marketed liar loans. That wouldn’t fit the definition of mortgage fraud – isn’t crony capitalism grand?
The TBTF banks that stole $11 trillion from American people are in partnership with the FBI to facilitate and arrest the American citizens they defrauded.
Holder and his Covington & Burling cronies at the DOJ must go.
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24th October 2011 at 11:10 pm
Mary Malone says:
Aw, shucks, Colma, you know how to make a girl blush…
Thanks for the kind words. Really appreciate it.
I found TBP during research for MBS/Mortgage fraud.
I visited Zero Hedge, Naked Capitalism and the Market Oracle.
Jim’s writing really stands out, and I found myself going to MO regularly to read his posts.
Eventually wandered over to TBP, and here I am.
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24th October 2011 at 11:29 pm
AKAnon says:
Mary M-Good for you and welcome. Thanks for the intricate details that most of us are looking for.
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24th October 2011 at 11:33 pm
newsjunkie says:
Watch your back, Mary.
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24th October 2011 at 11:48 pm
Mary Malone says:
Thanks, AKAnon.
Wasn’t sure if my posts were too long-winded. Difficult to be pithy when posting sometimes.
Appreciate the feedback…
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24th October 2011 at 12:05 am
AKAnon says:
NJ-I hope that comment wasn’t directed at me-I’d never. But good advice on TBP in general.
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24th October 2011 at 12:19 am
Mary Malone says:
Novista:
“All those investors complaining about AAA-rated lies only knew part of the truth. They thought the fraud was about bad mortgages misrepresented. What will they do when the learn the real story?”
The investors learned that there were no mortgages to back MBS in September 2008. That’s why the global credit markets froze.
Since then, they have secured world class legal representation and are lining up to sue the firms that defrauded them. Check out the BOA’s $8.5 B settlement with Blackrock and other institutional investors.
They are exercising their right to call for “puts” on the MBS. Under NY security law, investors have the right to get ALL of their money back – if they can prove one loan in the pool violated the Prospectus and/or Pool Servicing Agreement.
This poison pill was supposed to deter fraud. Obviously it didn’t work.
The only people who do not know that MBS are not backed by mortgages at all, are everyday Americans.
The investors want their money back. They don’t care about home-owners, or retirees pensions. All they care about are the markets.
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24th October 2011 at 12:22 am
newsjunkie says:
AkAnon,
No, my comment was not directed at you. I was reminded of the Freddie Mac CFO “suicide”, and just thinking that it she could be treading on dangerous ground.
Remember?
http://www.foxnews.com/politics/2009/04/22/freddie-mac-cfo-dead-apparent-suicide/
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24th October 2011 at 12:34 am
Mary Malone says:
Jeeze, Louise, Newsjunkie. You’re giving me the willies…
Just for the record, I have absolutely no intention of offing myself.
So, should you stumble across a 1 column inch story in the NJ Record that one MM drowned in a dry bathtub, don’t you believe one word.
My hubby will mourn my passing…but the sizable insurance policy on my pathetic little life should provide him comfort.
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24th October 2011 at 12:47 am
AKAnon says:
NJ-Now I get it. Sorry for being so thick.
Mary M-The key word is “apparent”. Re my response to NJ-not everyone plays nice on TBP, but I think you are well prepared to handle any confrontation. Especially since it appears anyone arguing with you will be playing a losing hand.
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24th October 2011 at 1:03 am
newsjunkie says:
Sorry, but you are dealing with sociopaths of the highest order.
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24th October 2011 at 1:05 am
Mary Malone says:
“…you are dealing with sociopaths of the highest order.”
True dat, Newsjunkie. No worries, tho.
We’re doing God’s work and He’ll keep me safe….
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24th October 2011 at 1:52 am
Yojimbo says:
I would like to humbly and sincerely ask Mary Malone to write a series of articles on Mortgage Fraud that could be posted here on TBP for passers-by to read.
Far more people look at the articles and major posts than read the comments underneath. The information she has is extremely important to communicate to the public.
Most people, when you mention the crimes and fraud of the banks, have no idea what you are talking about.
Mary Malone, please ask for contributor status and post some hard-hitting pieces explaining what occurred.
Thanks.
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24th October 2011 at 5:53 am
Novista says:
Mary M
Yojimbo, wot he said.
Thank you for the backstory, it’s like finally finishing a 1000 piece picture puzzle of a simle repeating pattern. One question — going back to 2004, the FBI were apparently active in mortgage fraud on the ‘industry insider’ track, and if I recall, testified to congress on ongoing instances. That all went quiet’ did they have an Alberto Gonzales moment?
I’m sure glad you’re here.
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24th October 2011 at 7:20 am
Mary Malone says:
Yojimbo, thanks for the erncouraging words.
It would be an honor to to contribute to TBP. I’ll make the request post -haste.
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24th October 2011 at 11:05 am
Administrator says:
Mary
You need to be a registered user before I can make you a contributor.
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24th October 2011 at 11:10 am
Mary Malone says:
Novista:
Yes, we read the Congressional testimony of FBI agent in 2004, who predicted a massive mortgage fraud was underway.
As best we can tell, FBI’s senior management never acted on his assessment.
The Special Agent has since retired and refuses to publicly comment about the subject . So we won’t reveal his identity here…
But your question is an excellent one and should be answered in the future…
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24th October 2011 at 11:38 am
AWD says:
Mary Malone:
You strike me as a lawyer, or legal type. What’s the story?
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24th October 2011 at 11:43 am
mary malone says:
Not a lawyer, AWD. So won’t play one on TBP.
My background is in media – worked for 30 years in TV, magazines, newspapers and radio on the business side. Left when the stench became too strong to ignore.
Always wanted to be an investigative reporter and when the 2008 credit crisis hit, the MSM story didn’t track.
So, out of curiosity and a hobby, I started to follow the Big Money. Logged onto Institutional Investor and Pension Fund Managers chat rooms, message boards, conferences and white papers. They were all talking about how there were no mortgages to back mortgage backed securities.
They said it was a huge scam and were joking about getting bailed out. Many feared the day when tax-payers would figure out they’d been conned. Called it a Black Swan.
So in 2008, the people who orchestrated the biggest heist in world history were recommending their clients buy gold and farmland in developing countries. Many moved their capital and their residences outside of the US.
Meanwhile, everyday Americans are drowning in debt with no relief in site.
I couldn’t understand why some reporter at NYT or Wall Street Journal didn’t cover the story. So I kept researching, compiled a narrative and learned the business of mortgage securitization.
In 2009, a number of websites popped up that featured original documents from beleaguered home-owners who were trying to get modifications or principal reductions. They were not deadbeats. Many were under-employed professionals who were getting the run award from banks. They had time to research their loans and asked intelligent questions. They began to file objections to foreclosures and appear pro se in court.
By late 2009 and early 2010, they began to win.
A volume of case law is available on sites like http://www.livinglieswordpress.com, or stopforeclosurefruad.com.
I began to read all these opinions, filings and decisions and gain an understanding of property and security law.
Took alot of time and effort, but by 2010 I was able to explain what I learned to other people in language they could understand.
December 2010, I told the Tea Party Executive Board what I had learned. One of our members worked in capital markets at senior level for many years. He really doubted what I was telling him, and offered to check it out.
He read my research, talked with colleagues in the markets he respected and came to the regretful conclusion that I was right.
Today, the two of us give a presentation describing how the fraud occurred and what it means to home-owners. We’re getting over 100 people in the room each meeting and doing all we can to educate people on how to protect their private property under existing law.
Not easy, but we’re getting traction. More and more people are learning the truth, telling their friends and challenging their lenders.
Our goal is to force principal reductions for all home-owners. Under, above water, conventional, ARM, doesn’t matter. All home-owners have been severely damaged and need relief.
Our essential plea to government officials is: Investors and home-owners have been defrauded. But the investors have the means to protect themselves. Home-owners don’t and they need government’s protection.
I know this post is rather lengthy, but thought it was important for you to know what my background and interests are so you can judge the accuracy of future posts for yourself…
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24th October 2011 at 2:18 pm
AWD says:
Mary:
I wish to GOD we had more journalists like you. Your stuff is revealing, in depth, and great.
You would get along great with William Black. We need more people like you, and 30,000 less MSM talking brainwashed heads.
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24th October 2011 at 2:21 pm
mary malone says:
Admin,
FYI- I registered and sent you an email.
Thanks!
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24th October 2011 at 2:27 pm
mary malone says:
Thanks for the kind words, AWD.
William K. Black’s work really helped me understand how the fraud works and what we need to do to obtain convictions.
He’s a Patriot – would be honored to meet him sometime…
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24th October 2011 at 2:34 pm
Administrator says:
Mary
I made you a contributor. You can write or post articles.
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24th October 2011 at 2:54 pm