{"id":15184,"date":"2011-10-24T12:00:24","date_gmt":"2011-10-24T11:00:24","guid":{"rendered":"http:\/\/www.transcend.org\/tms\/?p=15184"},"modified":"2011-10-24T02:34:15","modified_gmt":"2011-10-24T01:34:15","slug":"big-banks-keep-paying-a-pittance-to-settle-fraud-charges","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2011\/10\/big-banks-keep-paying-a-pittance-to-settle-fraud-charges\/","title":{"rendered":"Big Banks Keep Paying a Pittance to Settle Fraud Charges"},"content":{"rendered":"

This week, Citigroup announced that it had settled with the Securities and Exchange Commission over charges that the mega-bank misled investors in a derivatives deal\u00a0and then bet against them<\/a>. Under the terms of the settlement, Citi\u00a0agreed to pay $285 million<\/a>.<\/p>\n

Citi is not the first bank to settle these sorts of charges with the SEC. Previously, Goldman Sachs had agreed to\u00a0a $550 million settlement<\/a>, while JP Morgan Chase\u00a0paid $154 million<\/a>. (Goldman\u2019s settlement was over the now infamous \u201cshitty deal<\/a>.\u201d)<\/p>\n

Having to fork over hundreds of millions of dollars may seem like a lot, but it\u2019s chump change to these banks. Citigroup, for instance, just announced profits of\u00a0$3.8 billion<\/a>\u00a0for the last quarter alone, while JP Morgan\u00a0made $4.2 billion<\/a>. Goldman Sachs this week announced just the second losing quarter since the bank went public in 1999, but it paid its SEC settlement in 2010, a year in which the bank\u00a0made $39.2 billion overall<\/a>.<\/p>\n

And as ProPublica pointed out, Citi\u2019s settlement will not only cost it a pittance, but ends the SEC\u2019s inquiries into\u00a0the vast multitude of junk<\/a>\u00a0the bank peddled onto its unwitting customers:<\/p>\n

The bank says it has settled all of its potential liability to a key regulator \u2013 the Securities and Exchange Commission \u2014 with a $285 million payment that covers a single transaction, Class V Funding III. ProPublica first raised questions about the deal [1] in August 2010. In announcing a case, the SEC said it had identified one low-level employee, Brian Stoker, as responsible for the bank\u2019s misconduct.<\/p>\n

It made no mention of the dozens of similar collateralized debt obligations, or CDOs, Citi sold to investors before the crash.<\/strong><\/p>\n

A bank spokesman said the SEC would not be examining any of those deals.<\/strong>\u201cThis means that the SEC has completed its CDO investigation(s) of Citi,\u2019\u2019 the spokesman asserted in an e mail.<\/p>\n

\u201cThis represents extreme caution, at best \u2014 and a failure to grapple with the magnitude and harmfulness of the misconduct, at worst,\u201d said Stephen Ascher, a securities litigator.<\/p>\n

It\u2019s already looking like the banks are going to\u00a0largely get off the hook<\/a>\u00a0for widespread foreclosure fraud, trading protection for charges for some small amount of help for homeowners. When it comes to charges that they intentionally misled investors and then bet against them, while simultaneously setting the entire economy up for a fall, that\u2019s basically what\u2019s happened already.<\/p>\n

Go to Original \u2013 nationofchange.org<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

This week, Citigroup announced that it had settled with the Securities and Exchange Commission over charges that the mega-bank misled investors in a derivatives deal and then bet against them. Under the terms of the settlement, Citi agreed to pay $285 million. Having to fork over hundreds of millions of dollars may seem like a lot, but it\u2019s chump change to these banks. Citigroup, for instance, just announced profits of $3.8 billion for the last quarter alone, while JP Morgan made $4.2 billion. Goldman Sachs this week announced just the second losing quarter since the bank went public in 1999, but it paid its SEC settlement in 2010, a year in which the bank made $39.2 billion overall.<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[55],"tags":[],"class_list":["post-15184","post","type-post","status-publish","format-standard","hentry","category-capitalism"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/15184","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=15184"}],"version-history":[{"count":0,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/15184\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=15184"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=15184"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=15184"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}