Wall Street regulation, supervision and enforcement post.
According to the WSJ, Wall Street M&A and IPO lawyer, Jay Clayton, is Trump’s leading candidate to become chairman of the Securities and Exchange Commission and could be announced as the nominee as soon as Wednesday.
Clayton, who met with Mr. Trump on Dec. 22, is a partner at Sullivan & Cromwell LLP, where he also worked on the 2014 IPO of Alibaba Group. His clients have included Goldman Sachs and Barclays Capital; he would succeed SEC Chairman Mary Jo White, another lawyer with a history of representing Wall Street banks before becoming a regulator. Clayton has spent his career working on the kinds of securities deals that the SEC has a hand in regulating.
Among his various listed deals are the following: Continue reading »
Last April, we commented on the most blatant (pre) revolving door we had ever seen at the SEC (and there have been many): the departure of the SEC’s head HFT investigator, Gregg Berman, who during his tenure at the agency (whose alleged purpose is to keep the “market” fair, efficient and unmanipulated) did everything in his power to draw attention away from HFTs. He did that, for example, by blaming Waddell and Reed for the May 2010 flash crash. This is what Berman, whose full title was the SEC’s “Associate Director of the Office of Analytics and Research in the Division of Trading and Markets” said in the final version of the agency’s Flash Crash report: Continue reading »
At the height of the financial crisis, when risk assets were imploding and counterparties were in danger of overnight collapse, Deutsche Bank avoided failure and nationalization by fabricating the value of its $130 billion derivative portfolio of “leveraged super senior” trades.
Some history: back in 2005, these trades were seen as “the next big thing” in the world of credit derivatives, something which DB at the time was building a massive position in. They were designed to behave like the most senior tranche of a typical collateralised debt obligation, where assets such as mortgages or credit default swaps are pooled to give investors varying degrees of risk exposure. Deutsche became the biggest operator in this market, which involved banks buying insurance against the possibility of default by some of the safest companies, the FT writes. Continue reading »
The SEC announced on Thursday that Bank of America’s Merrill Lynch unit admitted wrongdoing and has agreed to pay $415 million to settle charges that it “misused customer cash to generate profits for the firm.”
According to the statement, Merrill violated the SEC’s Consumer Protection Rule by misusing customer cash that rightfully should have been deposited in a reserve account, freeing up billions to finance its own trading activities as a result. Continue reading »
Monsanto Co will pay $80 million to settle civil accounting violations after it allegedly misstated its earnings in connection with its top-selling Roundup product, U.S. securities regulators said on Tuesday.
The Securities and Exchange Commission also said that three accounting and sales executives have also agreed to settle charges in connection with the case. Continue reading »
– “Project Omega” – Why HFTs Never Lose Money: The Criminal Fraud Explained (ZeroHedge, Aug 13, 2015):
Two weeks ago, without knowing the details of the most recent market-rigging and frontrunning scandal involving “alternative” market veteran ITG’s dark pool POSIT, which issued a vague 8-K it would settle with the SEC for “irregularities”, we explained what we thought had happened:
ITG had an in house prop trading group, or “pilot”, which operated for nearly two years, whose only signal was client order flow, which it would frontrun, and make millions in profits. In other words, once again precisely what we have claimed since 2009. But oh yes, not everyone is guilty of such manipulation. Only Liquidnet… and Pipeline… and ITG… and countless other ATS and HFT firms for whom clients are better known as either “easy money” or muppets.
And yes, we get the “trading experiment” narrative: calling it “criminal market manipulation and order frontrunning scheme” just does not sound like something the Modern Markets Initiative would spend millions of dollars to get Congressmen to agree on.
It turns out we were spot on, the only thing we missed was the name of this market manipulation exercise. Now, thanks to the SEC, we know: “Project Omega” (or as it was also correctly dubbed here the “criminal frontrunning scheme“) is how ITG dubbed its secretive prop-trading desk whose only purpose was to frontrun clients.
Here are the details for all you suckers who still read the HFT apologists and believe the bullshit that all these algos do is provide liquidity, when in reality all the really do is frontrun your orders, assuring them of 6 years of trading without a single day’s loss (or in the case of Virtu, one trading day loss). From the SEC: Continue reading »
Martin Armstrong The System Will Crack And One World Currency Is Coming
– Former SEC Director Admits The Truth: The Market Is Rigged (ZeroHedge, March 10, 2015):
For more than a decade, John Ramsay kept his mouth shut about how rigged the US equity market was.
As SEC Director of Trading & Markets, Ramsay tells Bloomberg her “had red tape over his mouth,” but now he is “uncorked.”
“I’ve been able to find my voice on these issues in a way I couldn’t have done when I was in the government, because you’re always limited by internal politics and not wanting to get too far out in front of the agency,” he said. “I feel like I’ve been a little bit uncorked.” Continue reading »
– 10 Examples Of The Extreme Incompetence That Now Pervades The Federal Government (The American Dream, Nov 2, 2014):
There has always been a substantial level of incompetence at federal agencies, but under the Obama administration incompetence has risen to unprecedented levels. This year the incompetence of the Secret Service, the Veterans Administration, the Department of Homeland Security and the CDC have all made national headlines. And it is hard to forget how the launch of Obamacare was such a failure that it became a global joke. We live at a time when our government officials can’t seem to do anything right. When Americans complain about the government, most of the time they focus on how corrupt and wicked our politicians have become, and that should not be downplayed whatsoever. But just replacing those politicians is not going to fix what ails our government. The quality of the workers throughout the government bureaucracy has fallen so dramatically that our federal agencies can no longer be depended upon to perform even the most basic governmental functions competently.
The following are 10 examples of the extreme incompetence that now pervades the federal government… Continue reading »
– Most Transparent Insider Trading Congress Ever Tells SEC To Shove it (ZeroHedge, July 28, 2014):
“Do as we say, not as we do,” appears the modus operandi of the current administration’s increasingly totalitarian regime. Today’s edition of ‘wait, what?’ comes from The WSJ who report that The U.S. House of Representatives told a federal court Friday it should dismiss a lawsuit filed by the SEC (regarding the long-running insider-trading investigation) because Congress is lawfully allowed to ignore requests to turn over records and testimony to the executive branch agency. Arguing “sovereign immunity” and responding in a rather snarky (almost “do you know who we are?” manner), House attorneys blasted the SEC’s “fool’s errand.”
The U.S. House of Representatives told a federal court Friday it should dismiss a lawsuit filed by the Securities and Exchange Commission because Congress is lawfully allowed to ignore requests to turn over records and testimony to the executive branch agency.
“Rather than acknowledge the fool’s errand on which it has embarked, the SEC instead invites this court to join it by disregarding fundamental limitations on judicial authority,” wrote House attorneys in a new court filing. Continue reading »
– Frontrunning: July 23 (ZeroHedge, July 23, 2014):
- Here come the gates which we predicted in 2010: SEC Is Set to Approve Money-Fund Rules (WSJ)
- Dick’s cuts 400 jobs as golf now less popular (MW)
- Kerry arrives in Israel, pushes for peace (Reuters) (Sure!)
- Pay Penalty Haunts Recession Grads as U.S. Economy Mends (BBG)
- Appeals Courts Issue Conflicting Rulings on Health-Law Subsidies (WSJ)
- Rebel Stronghold Donetsk Holds Breath as Shellfire Mounts (BBG)
- Business executive wins Georgia Republican runoff in U.S. Senate race (Reuters)
- Five held in China food scandal probe, including head of Shanghai Husi Food (Reuters)
- Jobs Hold Sway Over Yellen-Carney as Central Banks Splinter (BBG)
Overnight Media Digest
* Two U.S. appeals courts issued conflicting rulings on subsidies for health coverage purchased on federal insurance exchanges, clouding a major part of Obama’s health law. (http://on.wsj.com/1pb81yo)
* The Federal Reserve Bank of New York found that Deutsche Bank AG’s U.S. operations suffer from a litany of serious financial reporting problems that the lender has known about for years but not fixed. (http://on.wsj.com/1jUoOXe) Continue reading »
Tags: Banking, Barack Obama, Blackstone, China, Chrysler, Deutsche Bank, Economy, EU, Europe, Gaza, Global News, Government, Hamas, Israel, John Kerry, JPMorgan, Microsoft, Money Market, Obama administration, Palestine, Palestinians, Politics, RBS, SEC, U.K., U.S.
– As The SEC Finally Gets Involved In CYNK, One Short Has A Big Problem (ZeroHedge, July 11, 2014):
However, even in its halt, CYNK (“don’t be cynkal, be hopeful” perhaps Obama would say) continues to provide entertainment.
Case in point, this sad individual who on that bulletin board of epic retail investor comedy, Yahoo Finance, has explained their problem: it appears some brokers actually did allow shorting of CYNK, at a cost. A rather high and recurring cost it would appear.
In other news:
– Cynk sunk: regulators suspend trading in mystery company (Guardian, July 11, 2014):
Financial Industry Regulatory Authority halts trading in tech company with no assets, no revenue and just one employee
– Trading in CYNK Technology halted by SEC (CNBC, July 11, 2014):
Federal regulators on Friday halted trading in CYNK Technology, the mysterious over-the-counter stock that ran from a few cents to over $21 in a month.
– How The Market Is Like CYNK (Which Was Just Halted) (ZeroHedge, July 11, 2014):
For all the drama and comedy surrounding the epic idiocy in which a bunch of “investors” took the price of non-existent company CYNK from essentially zero to a market cap of over $5 billion in under a week, most people missed the key message here: the stock is a harbinger of what is happening to the entire market. Because while those defending what is clear irrational exuberance, scratch that, irrational idiocy are quick to point out that CYNK’s epic surge took place on less than 0.1% of its outstanding shares, these are the same people to say precisely the opposite about the S&P 500. “Ignore the collapsing volumes sending the stock market to all time high – it’s perfectly normal” is an often repeated refrain by the permabullish crowd. Just not when it involves case studies in market insanity like CYNK apparently.
Perhaps ironically, it was the concurrent most recent crisis in Europe, that involving Portugal’s cryptic Espirito Santo group, whose top-most HoldCo is largely shrouded in secrecy yet which somehow is not a deterrent to the sellside community to issue one after another “all is clear; don’t pull your deposits please” note, that confirmed not only that nobody has any idea what the real situation of European banks is, but how the entire capital market has now become nothing more than one glorified CYNK penny-stock turning into a mid-cap.
Deutsche Bank’s Jim Reid explains: Continue reading »
Added: Mar 30, 2014
http://usawatchdog.com/zero-prosecuti… Fraud expert and former regulator Professor William Black says, “Even today, we are well into 2014, and the Department of Justice record is intact. There have been zero prosecutions of the elite officers who led the epic epidemic of fraud. It was the most destructive in world history, zero of them even unsuccessfully prosecuted, much less prosecuted.”
What is the result of massive rampant unprosecuted fraud? Professor Black says, “If you don’t have any accountability, you not only make certain that there is going to be a next blow-up, but it will be worse. . . . We have effectively removed the criminal laws for a particular elite class of frauds.”
Join Greg Hunter of USAWatchdog.com as he goes One-on-One with Professor William Black of UMKC.
– Worldwide Financial Criminal Network Revealed Part1 (Veterans Today, June 15, 2014):
(MDC-NYSE) Denver Headquarters of Organized Crime. Illegal Mortgage Backed Securities $100 Trillion, Bank Bailouts, Derivatives $5,000 Trillion and the theft of 12 million American’s Homes through illegal foreclosures.
Denver’s Organized Crime Boss Hogs Leonard Millman and Larry Mizel who run MDC a Financial Conglomerate of Organized Crime who are the Bankers behind the Illegal Mortgage Backed Securities Frauds that lead to the 2008 Bank Bailout which was set up by their partner in crime U.S. President George W Bush to loot the U.S. Treasury and hide their crimes. U.S. Attorney General Eric Holder and his Law partner Lanny Breuer maintained the cover up without any prosecutions of these horrendous crimes. Eric Holder and Lanny Breuer head of the Justice Department’s criminal division were partners for years at a Washington law firm that represented a Who’s Who of big banks and other companies at the center of foreclosure fraud. Breuer resigned last year from the Justice Department after a series on the Bank Frauds done by PBS Frontline.com.
Hillary Clinton laundered over $2.5 Billion of Narcotics Money from the Iran Contra Drugs for Guns run out of Mena, Arkansas to MDC’s cutout M&L Business Machines Company while her husband Bill Clinton was Governor of Arkansas. Hillary Clinton and her Rose Law firm had created Foreign Trusts for Bush, Millman and Mizel that Norman Brownstein is now the Trustee in order to avoid U.S. Taxes and to hide the true identity of who is behind these trusts. Brownstein is one of six of the CIA Council to then CIA Director George HW Bush. Bush-Millman-Clinton Zionist Organized Crime Family Flow Chart (1) Leonard Millman, Larry Mizel and Norman Brownstein control AIPAC the American Israeli PAC, the ADL Anti Defamation League and the Simon Wiesenthal Center. Both Mizel and Browstein are Directors of AIPAC and The Simon Wiesenthal Center. Leonard Millman’s other partner in crime Convicted HUD figure Philip Winn and a major player in the fake Mortgage Backed Securities and former Director of MDC is a Director of the ADL.
Tags: ADL, AIPAC, Banking, Barack Obama, Bush administration, CIA, Crime, Drugs, Economy, Eric Holder, Foreclosures, George Bush, George H. W. Bush, Global News, Government, Hillary Clinton, Israel, Obama administration, Politics, SEC, Society, U.S.
– SEC Official Claims Over 50% of Private Equity Audits Reveal Criminal Behavior (Liberty Blitzkrieg, May 12, 2014):
Last week, Yves Smith of Naked Capitalism penned a fantastic piece leveraging a talk by SEC official Drew Bowden. Mr. Bowden heads the SEC’s examinations unit, and at a private equity conference he explained that “more than 50 percent of private equity firms it has audited have engaged in serious infractions of securities laws.” What is so incredible about the talk, is that while Bowden goes into details of shady practice after shady practice, he ultimately admits that the SEC isn’t being particularly aggressive with the private equity industry because “we believe that most people in the industry are trying to do the right thing, to help their clients, to grow their business, and to provide for their owners and employees.”
Yes, go ahead and read that again. The industry regulator is assuming that private equity firms are trying to do the right thing, despite the fact that audits demonstrated to a tune of greater than 50% the opposite to be true.
Private equity managers are some of the savviest people in finance and they know exactly what they are doing. What the SEC is basically admitting, is that private equity firms are also “too big to regulate” and, of course, “too big to jail.” After all, every single person at the SEC is likely angling for a big payday at a PE firm via the revolving door. Of course they aren’t going to regulate.
Meanwhile, if you are just an average citizen, you will be prosecuted to the fullest extent of the law if you commit even the most minor infraction. This sort of behavior led to the death of prodigy Aaron Swartz, the incarceration of political prisoner Barrett Brown, a swat team raid on a young kid in Peroia, Illinois for a parody Twitter account, the firing of a constriction worker for not paying for a $0.89 soda refill. This list goes on and on. Yet private equity crimes, which likely run into the billions collectively, are treated with kid gloves. As I have maintained many times before, this is how the social fabric of a society dies. Continue reading »
– HFT Purge Begins: SEC Prepares To “Remove” Some High Frequency Trading Firms (ZeroHedge, April 13, 2014):
Ever since Goldman’s anti-HFT Op-Ed less than a month ago, and since the even more recent full-hearted support by Goldman of Michael Lewis’ most recent entry into the anti-HFT crusade (one promoting the Goldman-supported IEX exchange), one thing has been clear: the days of market structure in its current format are numbered. This was further confirmed after Goldman exited both its legacy Spear Leeds & Kellogg designated market making post at the NYSE, and is said to be winding down its market-dominating dark pool, Sigma X.
It also means that our 5 year crusade against HFT – not because we want it replaced with a different, Goldman-backed exchange but because HFTs inherently destabilize the market (see May 2010 and the now daily flash crash in individual stocks and/or exchanges) – and specifically those most profitable but also most parasitic and predatory HFT strategies… Continue reading »
We wonder: why does the truth about the broken system, as witnessed and experienced by individual employees, always wait until said employee is about to depart their employer or just after? Obviously that is rhetorical. However, it is worth mentioning, because in the latest such revelation, a retiring SEC trail attorney veteran, James Kidney, who had been with the agency since 1986 and retired this month, just crucified his now former employer for doing precisely all those thing that outside critics – notably Zero Hedge – have accused the most co-opted, clueless, corrupt and criminal regulators of doing. Only he said it in a way that not even we could have phrased.
The SEC has become “an agency that polices the broken windows on the street level and rarely goes to the penthouse floors,” Kidney said, according to a copy of his remarks obtained by Bloomberg News. “On the rare occasions when enforcement does go to the penthouse, good manners are paramount. Tough enforcement, risky enforcement, is subject to extensive negotiation and weakening.”
Kidney said his superiors were more focused on getting high-paying jobs after their government service than on bringing difficult cases. The agency’s penalties, Kidney said, have become “at most a tollbooth on the bankster turnpike.”
Wow: another “erudite” former cog in the systemic wheel goes off the reservation and gets all tinfoil bloggy on us. He goes on: Continue reading »
– SEC Lashes Out at Wolves of Wall Street (OilPrice, Feb 10, 2014):
The US Securities and Exchange Commission (SEC) has suspended 255 shell companies from trading until 14 February to prevent “pump and dump” fraud, and stocks will not be relisted if companies fail to prove they are operational.
The suspension took hold at the start of trading on 3 February and will end at 11:50 p.m. on Feb. 14. Suspended stocks can’t be relisted unless the company can prove it is still operational, a requirement that the SEC said was “extremely rare.”
– Amazon Drops 10% – Triggers SEC Short Sale Rule (ZeroHedge, Jan 31, 2014):
Despite the best efforts of CNBC to have every bull on Amazon explain how great it really is and how they could enable to magical profit machine any minute if they so choose, the hedge fund hotel stock du jour is now down 10% and Bloomberg headlines blare:
- *SEC Short Sale Rule 201 is in Effect : AMZN (NASDAQ)
Last night’s algo-ramp to VWAP (on rising Prime prices?) is a long-distant memory now…
– 16 Major Firms May Have Received Early Data From Thomson Reuters (Rolling Stone, Sep 5, 2013):
Readers may recall an ugly story that broke earlier this summer, when New York State Attorney General Eric Schneiderman rebuked the news/business information firm Thomson Reuters for selling access to key economic survey data two seconds early to high-frequency algorithmic traders. The story strongly suggested that some Thomson Reuters customers were using their two-second head start (an eternity in the modern world of computerized trading) to front-run the markets.
“The early release of market-moving survey data undermines fair play in the markets,” Schneiderman said, back in the second week of July. Thomson Reuters suspended the practice of selling two-second head starts after Schneiderman insisted upon a change. Still, the firm defiantly refused to declare the change permanent and insisted that it had the right to “legally distribute non-governmental data” to “fee-paying subscribers.”
It turns out that there’s more to the story.
– Big Oil’s Central Asian Mafia (Veterans Today, Aug 6, 2013)
(Excerpted from Big Oil & Their Bankers: Chapter 17: Caspian Sea Oil Grab)
According to Kurt Wulff of the oil investment firm McDep Associates, the Four Horsemen, romping in their new Far East pastures, saw asset increases from 1988-1994 as follows: Exxon Mobil- 54%, Chevron Texaco- 74%, Royal Dutch/Shell- 52% and BP Amoco- 54%. Big Oil had more than doubled its collective assets in six short years.
This quantum leap in global power had everything to do withthe takeover of the old Soviet oil patch and the subsequent impoverishment of its birthright owners.
While the Four Horsemen gorged on Russian and Central Asian oil, Wall Street investment bankers were facilitating the oil grab and ripping off the Russian Treasury.
Salomon Smith Barney’s Phibro Energy oil trading subsidiary set up shop in Moscow. Goldman Sachs was hired by Yeltsin to lure foreign capital to Russia. Heading the Russian Goldman Sachs team was Robert Rubin, later Clinton Secretary of Treasury & Citigroup CEO. CS First Boston took a 20% stake in Lukoil, in partnership with BP Amoco. Continue reading »
Tags: 9/11, Afghanistan, Al-Qaeda, Al-Qaida, Banking, Bilderberg, Bill Clinton, BP, Bush administration, CFR, Chechnya, Chevron, China, CIA, Citigroup, cocaine, Columbia, Corruption, Dagestan, Dick Cheney, Drugs, Economy, Exxon, FBI, FSB, George Bush, Georgia, Global News, Goldman Sachs, Government, Halliburton, Harvard, Heroin, India, Kashmir, Kellogg Brown & Root, Kosovo, Lukoil, Manuel Salgado, Mikhail Khodorkovsky, Mikhail Saakashvili, Mossad, NATO, Opium, Osama Bin Laden, Pakistan, Politics, Prostitution, Robert Rubin, Russia, SEC, Shell, Tajikistan, Taliban, Terrorism, U.S., Uzbekistan, Wall Street, World Bank, Yugoslavia, Yukos Oil, Zbigniew Brzezinski
– Will JPMorgan’s “Enron” Be The End Of Blythe Masters? (ZeroHedge, Mai 3, 2013):
One year after the infamous Jamie Dimon “tempest in a teapot” fiasco, which promptly turned out to be the biggest TBTF prop-trading desk debacle in history, things were going well for JPMorgan.
On one hand, the chairman of the TBAC (and thus US Treasury advisor and policy administrator), and former LTCM trader, Matt Zames, was just recently promoted to the sole second in command post at the biggest US bank (and 2nd biggest in the world) by assets, and first in line to take over from Jamie Dimon. On the other hand, one of Mary Jo White’s former co-workers, and a JPM defense attorney from Debevoise just became head of the SEC’s enforcement division, in theory guaranteeing that the US government would never do more than slap the wrist of JPM in perpetuity. Continue reading »
– And For Its Next Trick, JPMorgan Takes Over The SEC (ZeroHedge, Mai 1, 2013):
JPM wasn’t satisfied with demonstrating its implicit control over the US bond issuing authority by promoting Matt Zames to the post of COO, the same Matt Zames who courtesy of his Chairmanship of the TBAC, also effectively runs the US Treasury where he “advises” the brand new Treasury Secretary who has no idea what he is doing. Oh no. Just to cover all its bases, Jamie Dimon’s firm decided to also take over the SEC as well.From a Notice of Withdrawal of appearance of one Andrew J. Ceresney filed in the case of the People of New York versus JPMorgan, in which find that Mr. Ceresney, formerly partner at Debevoise, the same firm that current SEC chief Mary Jo White came from, is no longer with the firm.
So, where is he then?
Cerseney… Cerseney… where have we seen that name…. Oh yes.
George Canellos and Andrew Ceresney Named Co-Directors of Enforcement
FOR IMMEDIATE RELEASE
Washington, D.C., April 22, 2013 — The Securities and Exchange Commission today announced that Acting Director George Canellos and former federal prosecutor Andrew Ceresney have been named Co-Directors of the Division of Enforcement. Continue reading »
– Goldman Implicated In Heinz Insider Trading Probe (ZeroHedge, Feb 15, 2013):
When the news broke of the SEC’s action against the HNZ call option insider traders, and we posted the full SEC charge against the perpetrators whose actions Zero Hedge reported on first, we asked this regarding one of the entities named: “the trade occurred through an “omnibus account located in Zurich, Switzerland in the name of GS Bank IC Buy Open List Options GS & Co c/o Zurich Office (the “GS Account”).” Does GS stand for Goldman Sachs one wonders?” This followed our prior post, rhetorically titled “Guess Who Was Buying HNZ Stock From Its Clients“, with the answer of course being Goldman Sachs, which had had HNZ stock at a Sell rating for months, and which just days before reiterated its negative sentiment. But for the most part the post was written in jest. Turns out the joke was on everyone else, because just as we feared, or rather knew, Goldman was indeed implicated all along.
Goldman Sachs Group Inc is cooperating with a U.S. Securities and Exchange Commission probe into insider options trading in H.J. Heinz Co before the food company announced it was being acquired, Goldman said on Friday.
Earlier in the day, the SEC filed suit against unknown traders using an account in Switzerland to buy options in Heinz before the company was purchased. The SEC suit does not explicitly name Goldman Sachs but refers to the account in Switzerland as the “GS Account.”
While none of this is surprising, we do find it curious that from “Vampire Squid”, Goldman Sachs has now metastasized into “he who must not be named.”
From the article:
“I’m sure you have already guessed the ending: Egan-Jones is banned from for the next 18 months from rating US government debt. They’ve effectively been silenced from telling the truth.”
As I’ve said many times before: Prepare for collapse.
– Scam complete: the US government takes a page from Diocletian’s book… (Sovereign Man, Jan 25, 2013):
Early in the 4th century, Emperor Diocletian issued an infamous decree to control spiraling wages and prices in the rapidly deteriorating Roman Empire.
As part of his edict, Diocletian commanded that any merchant or customer caught violating the new price structures would be put to death.
This is an important lesson from history, and a trend that has been repeated numerous times. When nations are in terminal economic decline, governments will stop at nothing to keep the party going just a little bit longer.
– Bombshell: Deutsche Bank Hid $12 Billion In Losses To Avoid A Government Bail-Out (ZeroHedge, Dec 5, 2012):
Forget the perfectly anticipated Greek (selective) default. This is the real deal. The FT just released a blockbuster that Europe’s most important and significant bank, Deutsche Bank, hid $12 billion in losses during the financial crisis, helping the bank avoid a government bail-out, according to three former bank employees who filed complaints to US regulators. US regulators, whose chief of enforcement currently was none other than the General Counsel of Deutsche Bank at the time!
The three complaints, made to regulators including the US Securities and Exchange Commission, claim that Deutsche misvalued a giant position in derivatives structures known as leveraged super senior trades, according to people familiar with the complaints.
All three allege that if Deutsche had accounted properly for its positions – worth $130bn on a notional level – its capital would have fallen to dangerous levels during the financial crisis and it might have required a government bail-out to survive. Continue reading »
– Germany Does What The SEC Hasn’t – Prepares To Ban HFT (ZeroHedge, Sep 26, 2012):
The EU assembly just voted affirmatively to impose a spate of rules to control ‘high-frequency-trading that, as the WSJ reports, was advanced by Germany following their concerns that speedy traders have brought instability to markets. It is somehow reassuring that three-years after we first brought HFT to the mainstream’s agenda, at least one nation is taking it seriously, doing something about it, instead of being filibustered into the ‘liquidity-providing’ meme. The rules will initially require registration, collect fees on excessive use of HFT methods, and install circuit breakers with the goals to “limit the risks associated with high-frequency trading” per a senior German FinMin; but the more stringent rules to come will have the greatest impact as they intend to include requirements for orders to rest on the exchange book for at least half-a-second, and potentially order-to-trade ratio caps. Not surprisingly, the HFTs believe a “one-size-fits-all approach would be very harmful.” Indeed – to their profits.
Via WSJ: Germany to Tap Brakes On High-Speed Trading
BERLIN—Germany is set to advance a bill Wednesday imposing a spate of new rules on high-frequency trading, escalating Europe’s sweeping response to concerns that speedy traders have brought instability to the markets.
The measure seeks to require traders to register with Germany’s Federal Financial Supervisory Authority, collect fees from those who use high-speed trading systems excessively, and force stock markets to install circuit breakers that can interrupt trading if a problem is detected.
“The goal of the German law is to limit the risks associated with high-frequency trading,” he said. Continue reading »
– Bloomberg FOIA Documents How Wall Street Made A Muppet Of The SEC, Mary Schapiro And Dodd Frank (ZeroHedge, Sep 5, 2012):
That the SEC is the most incompetent, corrupt, irrelevant and captured organization “serving” the US public is known by everyone. And while the details of the SEC’s glaring lack of capacity to do anything to restore investor confidence in the capital markets, which has become a casino used exclusively by Wall Street to defraud any retail investor still stupid enough to play (which lately a moot point as there have been no material retail inflows into mutual funds in over three years), are scattered, courtesy of Bloomberg we now have the best summary of just how the utterly clueless SEC is a muppet plaything of Wall Street, and together with it, the “grand regulation” that was supposed to keep Wall Street in check, is nothing but what Wall Street demand it to be, and forced the SEC, way over its head on regulation, to accept every change, that the very banks that are supposed to be regulated, demands as part of Dodd-Frank reforms. In short: everything we know about Wall Street ‘regulation’ has been a farce, and a lie, exclusively thanks to corruption rampant at the now documentedly incompetent Securities And Exchange Commission.Bloomberg has the smoking gun.
It had been two days since U.S. lawmakers negotiated all night to finish rules that would reshape the business of Wall Street. The 20-hour session left legislators, aides, lobbyists and regulators exhausted. Almost no one had a grip on all the details.
Then Annette Nazareth stepped in. That Sunday morning, she e-mailed a dozen Securities and Exchange Commission officials about the bill that would become the 2,300-page Dodd-Frank Act.
Who is Annette Nazareth? Continue reading »