 |
| ||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||
www.commondreams.org
Common Dreams
PO Box 443
Portland, ME 04112
United States
PO Box 443
Portland, ME 04112
United States
Showing posts with label FDIC. Show all posts
Showing posts with label FDIC. Show all posts
Monday, January 3, 2022
Week in Review: The Global Green New Deal Necessity in 2022
Saturday, January 1, 2022
Key Trump adviser flips in MAGA riot House probe
America mourns the loss of Betty White
Today's Top Stories:
Key Trump adviser flips, provides valuable cache of documents to Jan. 6 committee
Former NY police commissioner Bernard Kerik helped the ex-president build his phony election fraud case, and on Friday he delivered evidence of the operation to Congress.
Ron DeSantis AWOL as COVID tsunami inundates Florida
The Sunshine State recorded 76,000 new cases on Friday, nearly twice as many as California with half the population, but the governor hasn't briefed the press in over two weeks.
Joe Manchin pulls bombshell holiday stunt
No Lie with Brian Tyler Cohen: Unreal.
Gov. Abbott asks Biden for federal COVID aid as cases soar in Texas
The pro-Trump governor has rejected federal guidance on vaccines, masks, and lockdowns, but he's desperate for help now that omicron is ripping through his state.
Capitol officer furious over Mike Pence's Jan. 6 comments after police saved his life
A Capitol police sergeant seriously injured in the Jan. 6 insurrection called it a "disgrace" that the former vice president recently seemed to downplay the significance of the day after officers risked their lives to save his.
Minimum wage to increase in slew of new cities and states in 2022
Washington has yet to pass a national minimum wage hike, but the "fight for $15" marches on and will record stunning victories in a record number of markets in the new year.
Texas election workers sue state to block key GOP-passed voter suppression law
Republicans want to severely restrict mail-in voting, but the law they rammed through the statehouse would prevent election officials from carrying out their constitutional duties, plaintiffs claim.
Richard Ojeda: How Dems can learn from 2021's failures and turn them into 2022's wins (VIDEO)
No Dem Left Behind: 2021 was a tough year for Democrats, but if we learn from our mistakes, we'll start the New Year stronger!
Prince Andrew accuser turns up the heat, demands proof of medical condition
The maligned royal knee-deep in the Jeffrey Epstein sex-trafficking scandal claims he can't sweat, so lawyers for alleged victim Virginia Roberts Giuffre asked a judge to compel him to provide proof.
Woman who threatened to "kneel on neck" of a Black boy convicted
A New Hampshire woman in her 50s used a racial slur after threatening the 9-year-old at a local park, and now a court has ruled she violated the boy's civil rights.
FDIC’s Trump-appointed GOP chair to resign after partisan brawl
Federal Deposit Insurance Corp. Chairman Jelena McWilliams on Friday unexpectedly submitted her resignation after the Trump appointee faced partisan strife at the bank regulator, in a move that will give Democrats control of the agency in the coming weeks.
John Roberts takes aim at judicial ethics in year-end report
The chief justice called out his colleagues overseeing cases at all levels for ignoring blatant financial conflicts of interest.
Seriously?
Yes. Seriously.
Hope...
Monday, December 27, 2021
Congresswoman Maxine Waters Steps into the Ring as Referee in the Battle for Control of the FDIC
Congresswoman Maxine Waters Steps into the Ring as Referee in the Battle for Control of the FDIC
By Pam Martens and Russ Martens: December 27, 2021 ~
Congresswoman Maxine Waters, Chair of House Financial Services Committee
Maxine Waters is the Chair of the House Financial Services Committee. That Committee oversees the nation’s banks, including the megabanks on Wall Street that are serially charged by prosecutors with ever creative ways of looting the public. Waters’ Committee also oversees the bank regulators, which are frequently “captured” by Wall Street. One of those bank regulators has now come into the cross hairs of Waters.
Typically, if one is a captured bank regulator, one goes to extreme lengths to hide that fact. Thus, it is unusual that the Chair of the Federal Deposit Insurance Corporation (FDIC), Jelena McWilliams (a Trump holdover), has decided she has the power to run the federal agency with an iron hand and overturn the will of her Board of Directors. Even more unusual, McWilliams is engaging in this battle with her Board in public.
We’ve seen plenty of nasty corporate board battles over the years but this is the only time we can recall that the Chair of a federal banking regulator has taken the position that she, unilaterally, can override a decision voted favorably on by a majority of her Board of Directors.
The FDIC is the federal bank regulator that oversees federal deposit insurance and sends examiners into the banks that are federally insured in order to maintain their safety and soundness. The fact that three large, federally-insured banks in the U.S. (Citigroup, Wachovia, and Washington Mutual) blew themselves up during the 2008 financial crisis, suggests that exactly how the FDIC conducts its oversight of these institutions, and just how large and unmanageable it allows them to become, is a serious matter for Congressional oversight. (See OCC Says JPMorgan Chase Has $29.1 Trillion of Custody Assets; That’s $8 Trillion More than the Assets of All Banks in the U.S.)
Jelena McWilliams, Chair of the FDIC
House Financial Services Chair Waters has now stepped into the ring to stop the FDIC’s McWilliams from delivering a knock-out punch to her Board of Directors on the issue of how large bank mergers are being rubber-stamped by bank regulators. Last week, Waters sent a five-page letter thrashing McWilliams over her recent “obstructionist acts” to overturn the decisions of the Board of Directors of the FDIC and demanding that she provide the legal basis for her actions. Waters wrote:
“Following a 2018 deregulatory rollback of the Dodd-Frank Act’s enhanced prudential framework that applies to the largest banks, and as experts warned would happen in its aftermath, we have seen an acceleration of proposed and approved mergers in recent years creating even larger banks — including mergers of BB&T with SunTrust, First Citizens with CIT, and U.S. Bank with MUFG Union Bank. Unfortunately, there is evidence that regulators’ rates of approving pending merger applications has accelerated, even as the trend of large regional bank consolidation has picked up at a concerning pace. Communities directly affected by bank consolidation need access to financial services in order to recover from the pandemic, and we need a bank merger review framework that takes into account these dynamics.”
Waters demanded answers from McWilliams to her letter by January 21 and asked her to “stop these obstructionist acts and join the bipartisan efforts underway to strengthen the bank merger review process to ensure it is being conducted in the best interests of workers, consumers, and communities throughout the country.”
Prior to last week’s letter, Waters had sent a shot over the bow to McWilliams by releasing a public statement on December 16 which included this text:
“As I wrote last week, and at a time when a wave of megamergers is making our banking markets less competitive, I welcome the long-overdue steps by banking regulators to finally update their bank merger review procedures. However, I am deeply concerned by recent actions taken by the FDIC Chairman to — in an unilateral, unprecedented, and potentially unlawful move — attempt to thwart the will of the majority of the FDIC to seek public input on this matter. I am calling on Chairman Jelena McWilliams to explain her legal authority for attempting to veto this action approved by a majority of the FDIC Board, including by apparently directing agency staff to issue a public statement disavowing the sensible request for information from the public, and subsequently rejecting a motion to include the notational vote authorizing the request in the minutes at this week’s board meeting.”
There appears to be something highly unusual (and unseemly) afoot when it comes to Wall Street megabanks and their regulators in Washington. Saule Omarova just removed herself from consideration to become the head of the Office of the Comptroller of the Currency, the regulator of national megabanks like Citigroup and JPMorgan Chase that operate across state lines, after her bizarre proposal for radically redesigning the financial system to move all bank deposits from commercial banks to the Federal Reserve and eliminate FDIC insurance was published in a legal journal. It didn’t help either when it was revealed that Omarova, the nominee to oversee banks with $14 trillion in assets, had been arrested at age 28 for shoplifting.
Now we have the head of the FDIC (that Omarova proposed eliminating) taking the nutty position that she has the authority to override the votes of a majority of her Board of Directors.
Then there is the strange lack of vetting of the head of the criminal division of the U.S. Department of Justice, Kenneth Polite, whose division decides whether to prosecute the Wall Street megabanks or simply continue to hand out deferred prosecution agreements for criminal acts like parking tickets for being 30 minutes overdue on your meter.
It’s long past the time for Maxine Waters, and the Chair of the Senate Banking Committee, Senator Sherrod Brown, to start connecting these dots in a public hearing – and forcing all individuals to give their testimony under oath. It’s the names of the people sitting in the shadows and pulling the strings that Americans need to hear about.
Friday, December 24, 2021
Wall Street Has Deployed a Dirty Tricks Playbook Against Whistleblowers for Decades – Now the Secrets Are Spilling Out
Wall Street Has Deployed a Dirty Tricks Playbook Against Whistleblowers for Decades – Now the Secrets Are Spilling Out
By Pam Martens: November 29, 2021 ~
Carmen Segarra, an Attorney and Bank Examiner, Was Fired by the New York Fed after Refusing to Change Her Negative Examination of Goldman Sachs
For more than two decades, the general counsels of Wall Street’s mega banks have been meeting together secretly once a year at ritzy hotels and resorts around the world. This would appear to be a clear violation of anti-trust law but since Wall Street’s revolving door has compromised the U.S. Department of Justice over much of that time span, there has been no pushback from the Justice Department to shut down these clandestine meetings.
Wall Street insiders say that among the top agenda items at this annual confab are strategy sessions on how to keep Congress from enacting legislation that would bring an end to Wall Street’s privatized justice system called mandatory arbitration. This system allows the most serially corrupt industry in America to effectively lock the nation’s courthouse doors to claims of fraud from its workers and customers. This private justice system also keeps the details of many of Wall Street’s systemic crimes out of the press.
Wall Street’s McJustice system is just one element of a fully-loaded dirty tricks playbook that Wall Street uses to crush an honest worker who is intent on holding the firm to account. The playbook includes gaslighting; a campaign of ordered ostracizing by coworkers; demotion; an internal investigation with a preordained outcome to malign the reputation of the whistleblower; blackballing in the industry; and, frequently, the ultimate humiliation of being escorted out of the building by security guards. As the dirty campaign unfolds in front of colleagues, it achieves the intended additional goal of silencing any coworkers who might be thinking about reporting illegal activities.
Following this psychological warfare inside the Wall Street firm, the honest whistleblower will be met with the next chapter of the sociopathic playbook: Wall Street’s star chamber (mandatory arbitration) tribunals if he or she attempts to get compensated for damages, lost compensation and so forth. The Wall Street firms frequently bring current employees who were friends with the fired whistleblower to testify to outrageous lies about the honest worker in an effort to inflict more emotional damage to ensure this individual will look for future employment anywhere but Wall Street.
In one particularly brazen example of how this private justice system functions outside of the law, JPMorgan Chase employees felt confident that they could get away with falsifying written customer complaints against an honest whistleblower, broker Johnny Burris, and enter them at his arbitration hearing before the industry’s self-regulator, FINRA. Burris had earned the wrath of the bank for having the temerity to tape-record his bosses pressuring him to sell the firm’s own mutual funds to his clients, which generated more profits for the bank, rather than being allowed to decide which mutual funds would properly serve his clients’ best interests.
Burris was not the only honest whistleblower to use tape recordings as a means of securing a factual archive of events against Wall Street’s retaliatory lies. Carmen Segarra was an attorney and bank examiner employed by the New York Fed, a thoroughly captured regulator. She was deployed at Goldman Sachs. After she was bullied by colleagues (aptly called “relationship managers”) to change her negative examination of Goldman, she went to the Spy Store in lower Manhattan and bought a tiny microphone and recorded 46 hours of audio that demonstrated just how compromised by Wall Street the New York Fed had become. Segarra was fired after she refused to change her negative examination of Goldman.
Because Segarra was a bank examiner, she filed a lawsuit in federal district court in Wall Street’s stomping ground, the Southern District of New York, asserting a violation of protected activity as a bank examiner under the Federal Deposit Insurance Act. The case was dismissed by Judge Ronnie Abrams, who was married to Greg Andres, a partner at law firm Davis Polk & Wardwell. The case was before the court from October 2013 until April 3, 2014 when Judge Abrams scheduled a telephone conference with both sides to share the pesky detail that “it had just come to her attention that her husband [wait for it] was representing Goldman Sachs in an advisory capacity.” The Judge did not recuse herself and dismissed Segarra’s case.
Segarra courageously served the public interest by taking those 46 hours of tapes and her story to investigative reporters at ProPublica and public radio’s This American Life. What has happened to Goldman Sachs since then? On October 22, 2020 the Justice Department charged Goldman Sachs and its Malaysian subsidiary each with one felony count for “engaging in a scheme to pay more than $1.6 billion in bribes, directly and indirectly, to foreign officials…” in order to secure business for Goldman Sachs.
Attorney Gary Aguirre Was Fired by the SEC for Pressing to Serve a Subpoena on a Powerful Wall Street Figure
Segarra has plenty of company when it comes to honest attorneys who have become the target when they push too hard to hold powerful Wall Street titans or firms accountable. Former SEC attorney Gary Aguirre testified before the U.S. Senate Committee on the Judiciary in June 2006 about how trying to do his job with honesty derailed his career at the SEC. During Aguirre’s tenure at the SEC he had pressured his superiors to serve a subpoena on John Mack, a powerful former official at Morgan Stanley. Aguirre wanted to take testimony about Mack’s potential involvement in insider trading. What happened instead was that Mack was protected and Aguirre was fired over the phone while on vacation. The termination looked particularly suspicious because just three days prior, Aguirre had contacted the Office of Special Counsel to discuss the SEC’s protection of Mack.
More sadistic shenanigans from Wall Street’s dirty tricks playbook have spilled out this year in two federal lawsuits filed against JPMorgan Chase. In an amended complaint filed on June 23 by Donald Turnbull, a 15-year employee of the bank who had risen to the rank of Managing Director, he told the court that he had been fired for “cooperating in good faith with a federal investigation into the Bank’s trading practices.”
According to Turnbull’s lawsuit, once JPMorgan Chase “learned the nature of the information Mr. Turnbull had shared with government prosecutors — JPMorgan launched a retaliatory campaign against Mr. Turnbull. Alarmed by the perception of its institutional culpability, JPMorgan hurried through a faux inquiry into Mr. Turnbull’s unimpeachable trading practices. Based on a pretextual narrative that the Bank had lost confidence in him, the Bank terminated him, cancelled his unvested stock, and threatened to claw back his prior compensation.”
Less than five months after Turnbull filed his federal lawsuit, Shaquala Williams, a female attorney who worked in compliance at JPMorgan Chase, filed her own lawsuit in the same federal district court in Manhattan for whistleblower retaliation for protected activities under the Sarbanes-Oxley Act of 2002. (Whistleblower retaliation claims can sometimes avoid the mandatory arbitration trap and be sustained in federal court.) Williams makes extremely serious charges, alleging that the bank was effectively keeping two sets of books so it could make “emergency” payments to third party intermediaries, one of whom was a former government official tied to Jamie Dimon, the bank’s Chairman and CEO. Williams also claims that the bank had set up sham controls that violated its non-prosecution agreement with the Justice Department. (See the full text of Williams’ federal complaint here.)
Peter Sivere Is Still Fighting a Battle with Barclays that Began a Decade Ago
An equally disturbing story comes from Peter Sivere, who spent the majority of his career as a compliance official at two mega banks on Wall Street attempting to get his superiors to acknowledge the internal misconduct he reported, first at JPMorgan Chase and then at Barclays. JPMorgan Chase, which has subsequently admitted to an unprecedented five felony counts brought by the Justice Department between 2014 and 2020, had security guards humiliate Sivere by escorting him out of the building. Barclays first demoted Sivere, then terminated him.
The Board of Directors of JPMorgan Chase appears to be an enabling component of the dirty tricks playbook. Since 2014, the Board members have been reading about unfathomable levels of crime inside the bank they oversee but they have kept the same Chairman and CEO, Jamie Dimon, at the helm of the bank throughout that period. Less than 10 months after the bank admitted to its fourth and fifth felony counts on September 29, 2020, JPMorgan’s Board handed Dimon not a pink slip but a $50 million bonus. That gives a whole new level of meaning to Senator Bernie Sanders’ oft repeated message that “the business model of Wall Street is fraud.”
Oliver Budde, Attorney Representing Peter Sivere
Wall Street veteran and writer, William Cohan, has written extensively about Sivere’s dogged efforts in articles at Bloomberg News in 2012, the Financial Times in 2014 and the New York Times in 2015. One might think that this kind of media exposure would bring some kind of closure to Sivere. It hasn’t. That’s because both Sivere and his attorney, Oliver Budde, believe justice has been ill served in this matter.
We offered attorney Budde the opportunity to explain his theory of Sivere’s case for our readers. He provided us with the following statement:
“I see a conspiracy among Barclays, Sullivan & Cromwell and DOJ [Department of Justice] to bury the truth that in 2011, as a Barclays compliance officer, Peter Sivere blew the whistle on some Barclays employees misappropriating confidential information provided by client Hewlett-Packard in regard to foreign exchange — the very misconduct that seven years later became the basis for a 2018 letter agreement whereby DOJ declined to prosecute Barclays for the misconduct, in exchange for Barclays enhancing its compliance program, cooperating with DOJ and paying $12.9 million. Sullivan & Cromwell, Barclays’ outside counsel, also signed that letter. In it, DOJ with Sullivan & Cromwell’s endorsement gave Barclays special credit for ‘timely, voluntary self-disclosure’ in 2016 of precisely what Sivere had flagged to Barclays five years earlier in 2011. But in 2011, Barclays preferred to continue the wrongdoing rather than address it. So instead, Barclays decided essentially to ruin Sivere’s life, and so far, so good.
“The conspiracy appears quite daring, if not reckless, because Sivere is on record repeating his concerns to various audiences both inside and outside Barclays from 2013 to 2015, including to the New York Times in August 2015. We have abundant evidence that DOJ, Sullivan & Cromwell, the Barclays Board of Directors, CEO Antony Jenkins, Head of Compliance Hector Sants, and many others at Barclays all knew of Sivere’s 2011 whistleblowing by 2015. We have evidence that Sivere participated in a 2015 teleconference with DOJ and FBI personnel, and Sivere swears in an affidavit that he described his 2011 Hewlett-Packard concerns on that call. And finally, Alexander Willscher, the very Sullivan & Cromwell attorney who signed the 2018 DOJ letter, was one of four Sullivan & Cromwell recipients of dozens of emails Sivere sent in 2015 in which he again explained those concerns at length.
“Why bury the truth of Sivere’s 2011 whistleblowing? Simple: in June 2012 Barclays signed a similar letter agreement in which DOJ declined to prosecute LIBOR misconduct, which obliged Barclays to report ‘all potentially criminal conduct by Barclays or any of its employees that relates to fraud or violations of the laws governing securities and commodities markets.’ Likewise, in May 2015 Barclays signed a plea agreement with DOJ wherein DOJ declined to prosecute foreign exchange misconduct, but with no mention of Hewlett-Packard, which similarly obliged Barclays to report ‘all credible information regarding criminal violations of U.S. law concerning fraud, including securities or commodities fraud by the defendant or any of its employees as to which the defendant’s Board of Directors, management (that is, all supervisors within the bank), or legal and compliance personnel are aware.’
“If Barclays, Sullivan & Cromwell, or DOJ were ever to admit the validity of Sivere’s 2011 whistleblowing, then it would become clear that Barclays had violated the terms of both the 2012 DOJ letter agreement and the 2015 DOJ plea agreement, and nobody could credibly claim that Barclays deserved either the mild treatment or the special credit for ‘timely, voluntary self-disclosure’ afforded to it by the 2018 DOJ letter agreement.
“I am ready to defend my assertions in any appropriate forum.”
Let’s pause here to reflect for a moment. There is now an attorney whistleblower, Shaquala Williams, filing a lawsuit in federal district court in Manhattan in which she asserts that JPMorgan Chase is effectively making a monkey out of the Justice Department by issuing sham reports of its compliance with its non-prosecution agreement. Now we have another attorney, Oliver Budde, willing to put his name to a statement that there’s a conspiracy surrounding Barclays’ non-prosecution agreement with the Justice Department.
Maybe it’s time for an independent Special Counsel to be appointed to investigate these non-prosecution agreements. We learned through Frontline’s investigation about how Obama’s Justice Department was investigating Wall Street’s crimes from the 2008 financial crisis. Frontline reported that there were “no investigations going on. There were no subpoenas, no document reviews, no wiretaps.”
There are a number of additional reasons to take attorney Budde’s theory of the case seriously. First, the Justice Department, under both the Obama administration and the Trump administration, has been handing out non-prosecution agreements to serial lawbreakers on Wall Street like it’s a meter maid handing out parking tickets for failing to put enough quarters in the meter. Clearly, a recidivist lawbreaker does not deserve endless probation agreements.
Alexander Willscher, Partner, Sullivan & Cromwell
Secondly, one of the attorneys who signed the 2018 non-prosecution agreement on behalf of Barclays was Andrew Willscher, a Sullivan & Cromwell partner who brags on the law firm’s website about persuading the Justice Department in the 2018 deal “not to bring criminal charges against Barclays relating to allegations that bank employees used confidential merger information to front-run trades and enable the bank to profit at a client’s expense.” Willscher also brags about the 2015 non-prosecution agreement where he represented Barclays “in the investigation and resolution with the DOJ and other regulators relating to a criminal conspiracy to manipulate the price of currency exchanged in the global FX Spot Market.” The 2015 case included evidence of a Barclays trader stating in a chat room “…if you ain’t cheating, you ain’t trying.”
Should Willscher, an attorney, be bragging on his law firm’s website about getting a serial repeat offender off the hook for prosecution?
Steven Peikin Went Through the SEC’s Revolving Door, Returning to Sullivan & Cromwell to Defend Wall Street Firms
While Willscher was settling the 2018 Foreign Exchange trading/front running matter with the Justice Department, a Sullivan & Cromwell law partner, Jay Clayton, was sitting as the Chairman of the Securities and Exchange Commission (SEC), thanks to his nomination by President Donald Trump. Another Sullivan & Cromwell law partner, Steven Peikin, was serving as Co-Director of the SEC’s Division of Enforcement.
Peikin is the Sullivan & Cromwell partner who had negotiated the Barclays non-prosecution agreement in 2012 for Barclays’ involvement in rigging the interest rate benchmarks, LIBOR and EURIBOR, and the amended agreement of 2014. Peikin’s name appears on both agreements.
As we reported when Clayton was nominated to be SEC Chair, he had represented 8 of the 10 largest Wall Street banks in the prior three years at Sullivan & Cromwell. Clayton was too deeply conflicted to be nominated, and yet, he was confirmed anyway.
Tom Mueller, Author of Crisis of Conscience: Whistleblowing in an Age of Fraud
We asked Tom Mueller, author of the seminal work on corporate whistleblowers, Crisis of Conscience: Whistleblowing in an Age of Fraud, what he thought of the regulatory situation on Wall Street today. Mueller responded:
“The line of goods we’ve all been sold, that lawyers who regulate Wall Street can freely leave their posts to join Wall Street banks or their white-shoe defenders – that cops can morph into robbers without impairing their will to police – is the single most toxic characteristic of Good ol’ Boy financial pseudo-regulation in America. The revolving door acts like a cup of polonium-laced tea on the professional ethics of attorneys in the financial services.”
When Bloomberg News reported in 2016 about the General Counsels of Wall Street mega banks meeting in secret annually for two decades, we noted that attendees at the clandestine 2016 meeting included Stephen Cutler of JPMorgan Chase (a former Director of Enforcement at the Securities and Exchange Commission); Gary Lynch of Bank of America (a former Director of Enforcement at the SEC); and Richard Walker of Deutsche Bank (also a former Director of Enforcement at the SEC).
Another smoking gun from the 2018 non-prosecution agreement between Barclays and the Justice Department is that the investigation into the foreign currency frontrunning at Barclays was not handled by the Commodity Futures Trading Commission (CFTC), which states on his website that it is “the Federal agency with the primary responsibility for overseeing the commodities markets, including foreign currency trading.” Nor was the investigation overseen by the Securities and Exchange Commission, which could have investigated Sivere’s allegation that Hewlett-Packard’s confidential information was improperly shared at Barclays to financially benefit Barclays’ proprietary trading.
Instead, bizarrely, the Inspector General of the Federal Deposit Insurance Corporation (FDIC) conducted the investigation. The last paragraph of the press release announcing an indictment in the matter reads as follows:
“The investigation is being conducted by the FDIC’s Office of Inspector General. Assistant Chief Brian Young and Trial Attorney Justin Weitz of the Criminal Division’s Fraud Section are prosecuting the case. The U.S. Attorney’s Office for the Northern District of California provided substantial assistance in this matter.”
The FDIC Office of Inspector General acknowledges on its website that it has “broad jurisdiction to investigate crimes involving FDIC-regulated and insured banks and FDIC activities.” An indictment in the case was brought against an employee of Barclays Capital Inc., a brokerage firm (broker-dealer) that has nothing to do with the insured deposits overseen by the FDIC.
The story gets even stranger. We emailed the FDIC OIG’s Media Relations contact three times attempting to learn how the FDIC OIG became involved in this trading matter that would properly belong with the CFTC and SEC. We simplified our question in our third attempt to this: “Under what circumstances would the FDIC OIG be authorized to conduct an investigation involving a broker-dealer’s Foreign Exchange Trading, when its public mandate is to investigate matters pertaining to federally-insured banks?”
The media relations person provided no responsive answer, just a link to the FDIC OIG’s main website.
Barclays may now be in hot water with Wall Street’s self-regulator, FINRA. According to Sivere, the separation agreement he signed with Barclays required him to arbitrate any future claims he might have against Barclays before a private arbitration forum known as JAMS. This appears to be another page from the dirty tricks playbook.
Sivere worked for Barclays Capital, a brokerage firm (broker-dealer). As a compliance official, he fell into the category of what Wall Street’s self-regulator, FINRA, defines as an “Associated Person.”
We asked FINRA via email if a broker-dealer is allowed to use a private arbitration forum rather than FINRA’s forum for disputes between an Associated Person and his firm. We let FINRA know that we were specifically speaking about a compliance official at Barclays whose separation agreement called for the exclusive use of JAMS.
Unlike the FDIC OIG, which went into hiding when we posed a question, we promptly received a detailed response from FINRA. It included this rather stark assessment of the substitution of JAMS instead of FINRA Dispute Resolution:
“Thus, FINRA considers actions by member firms that require associated persons to waive their right under the Industry Code to arbitration of disputes at FINRA in a predispute agreement as a violation of FINRA Rule 13200 and as conduct inconsistent with just and equitable principles of trade and a violation of FINRA Rule 2010 (Standards of Commercial Honor and Principles of Trade).
“FINRA notes that it has a statutory obligation under the Exchange Act to ‘enforce compliance by its members and persons associated with its members, with the provisions’ of, among other things, the Exchange Act and FINRA’s rules, which include the requirement to arbitrate before FINRA. Furthermore, FINRA may sanction its members or associated persons for violating any of its rules by ‘expulsion, suspension, limitation of activities, functions, and operations, fine, censure, being suspended or barred from being associated with a member, or any other fitting sanction.’ ”
We contacted Barclays seeking a response to FINRA’s interpretation of what Barclays had done by substituting JAMS. We also asked how many other separation agreements Barclays had written that exclusively designated JAMS as the arbitral forum. We received this response: “We will decline to comment on this.”
According to an article in the Los Angeles Business Journal in July of last year, JAMS’ structure works like this: it is owned by 125 of its arbitrators/mediators who are considered independent contractors and can set their own rates, “which range from about $6,000 to $15,000 a day, with an average of about $10,000 to $11,000 a day, according to one industry executive.” The article also reported that JAMS’ retired judges account for about 75 percent of JAMS arbitrators/mediators and they can take home 70 to 75 percent of their fees.
We contacted JAMS via email asking if there was anything inaccurate in the above information that has been published on the website of the Los Angeles Business Journal for more than a year. We received no response.
Carolyn Demarest, JAMS Arbitrator
Last September, Sivere filed an arbitration with JAMS, essentially on the basis of the theory outlined above by his current attorney Budde. Sivere had a single arbitrator for his case, Carolyn Demarest, a former Presiding Justice of the Commercial Division of the Supreme Court of Kings County, New York. Demarest billed at $775 an hour, rivaling the lawyers at Wall Street’s Big Law firms. Sivere provided us the invoice, indicating that he paid in excess of $10,500 while Barclays paid a similar, but smaller, amount. Demarest dismissed the case on a Motion for Dismissal from Barclays.
In a federal court case, both the Judge and the jury are provided at no cost to the plaintiff and are paid for by the U.S. taxpayer. Wall Street has convinced federal courts across America that mandatory arbitration is “fair, fast and cheap.”
The American Association for Justice released a study on October 27, which analyzed the consumer and employee win rate at private arbitration forums JAMS and a similar group, the American Arbitration Association (AAA). The study found the following:
“In years past, consumers were more likely to be struck by lightning than win a monetary award in forced arbitration. In 2020, that win rate dropped even further. Just 577 Americans won a monetary award in forced arbitration in 2020, a win rate of 4.1% — below the five-year-average win rate of 5.3%. For employees forced into arbitration, the likelihood of winning was even lower. Despite roughly 60 million workers being subject to forced arbitration provisions at their place of employment, just 82 employees won a monetary award in forced arbitration in 2020.”
The five-year average win rate for employees going before JAMS and AAA arbitrations was 1.9 percent.
Subscribe to:
Posts (Atom)
"Look Me In The Eye" | Lucas Kunce for Missouri
Help Lucas Kunce defeat Josh Hawley in November: https://LucasKunce.com/chip-in/ Josh Hawley has been a proud leader in the fight to ...
-
06 October 21 Live on the homepage now! Reader Supported News YOU BE THE ONE WHO DONATES — We need supporters any way we can get them. W...
-
03 November 21 Live on the homepage now! Reader Supported News FOCUS: Dahlia Lithwick and Mark Joseph Stern | The New 6-3 Majority Dah...
-
Please Increase My Monthly Donation I’m shocked people are not more willing to help with donations. RSN does an incredible job. I learn ...
