Is It in My Head?

news.firedoglake.com

The reported straw that broke the camel’s back was Stiglitz’s criticism of the dubious practice known as high-frequency trading (HFT). HFT has come under criticism from all sort of places including on Wall Street for shady trading practices, offering no overall economic benefit, and causing instability in the financial markets. Stiglitz said it was worth considering the option of putting a tax on HFT which was not well received by HFT industry apparatchiks in DC.

1. delaying and watering-down Dodd-Frank (not even the Volcker Rule, designed to make sure federally-insured deposits aren't used in the Street's casino, is out yet)
2. diluting and contesting (through endless litigation) regulations that agencies were supposed to devise under Dodd-Frank; and
3. making sure those agencies haven't had enough funding to enforce those regulations.

Firrea is unusually crafted, as it requires a criminal violation like wire fraud or mail fraud to set off the law’s penalties. But because it is a civil statute, it requires a lower burden of proof than criminal charges — finding guilt by a preponderance of the evidence versus beyond a reasonable doubt.

That broad authority has alarmed some defense lawyers, who have argued that the Justice Department has stretched the application of Firrea far beyond its original intent. Bank of America, in a motion to dismiss its case, described the prosecution as having “a wildly expansive reading” of the law.

Other critics question whether the government is overcompensating for the lack of criminal cases against Wall Street. Firrea’s civil actions are a cop-out, the critics say, since not one senior Wall Street executive has been charged criminally for a role in the crisis. The same office that employs Mr. Weidman — the United States attorney’s office in Los Angeles — has come under fire for dropping a criminal investigation of Angelo Mozilo, the former chief executive of Countrywide Financial, one of the biggest mortgage lenders before the financial crisis.

Some investigators at the Securities and Exchange Commission, which file civil cases against big banks, have also raised objections. Federal prosecutors, the S.E.C. officials privately grouse, are encroaching on their turf.

“Realistically, for the Justice Department, the civil cases are a Plan B,” said Stavros Gadinis, a professor at the University of California, Berkeley, law school who focuses on financial regulation.

The federal government’s deployment of the little-used law has inspired comparisons to Eliot Spitzer’s novel use of the Martin Act as a cudgel against fraud. As New York’s attorney general, Mr. Spitzer harnessed the powerful 1921 state law to pursue suspected wrongdoing at large Wall Street firms like Merrill Lynch.

Firrea carries similar potency. In addition to the lower burden of proof, it allows prosecutors to bring cases that take aim at misconduct as far back as 10 years — a generous statute of limitations compared with five years for criminal securities fraud. And in pursuing a Firrea lawsuit, prosecutors are allowed not only to issue subpoenas, but also to take the sworn testimony of individuals.

It also provides for hefty fines. The Justice Department used the law to sue S.& P. for more than $5 billion, accusing it of knowingly issuing misleading ratings on mortgage-backed securities. JPMorgan’s tentative $13 billion settlement over its sale of shoddy mortgage securities would be a record — a single company has never before paid that much to the government.

Defense lawyers say that Firrea gives the government a game-changing weapon in pursuing civil cases against banks.

“In retrospect, it’s surprising that prosecutors have waited so long to happen upon such a powerful statute,” said Susan E. Brune, a former federal prosecutor and now a partner at Brune & Richard.

Lanny Breuer, the head of the Justice Department's criminal division, is stepping down, leaving countless ruined lives in his wake.

It's hard to know where to begin the list of colossal, and sometimes fatal, mistakes by Breuer--from the botched Fast & Furious gun-walking operation, to not prosecuting a single top Wall Street executive, to his brutal war on whistleblowers using the bludgeon of the Espionage Act.

Bet you didn’t realize that by signing up with a taxpayer-financed, private Medicare Advantage plan you can command a price of $6000 for the sale of yourself when your plan is acquired by another plan. Well, actually you don’t get the $6000. Neither does it revert to Medicare and the taxpayers. No, it goes to the top 1 percent, while leaving the 99 percent of us once again dumbfounded.

What price does a person in the traditional Medicare program command? What a ridiculous question. Medicare doesn’t buy and sell patients. That happens only when Medicare patients are privatized. Selling patients is a function limited to private plans, not public social insurance programs.

Over the last several years, we have watched as those at the very top have prospered while the fortunes of those below the very top have stagnated or declined. The gap between rich and poor is greater than ever before in our lifetimes, and we need to stand up for those who are trying to improve their circumstances and provide for their families.

The dedicated students whom we teach at institutions of higher education are being forced to pay more for tuition and go deeper into debt because of cuts in state funding, only to find themselves unemployed when they graduate.

The majority of college and university faculty positions are now insecure, part-time jobs. In addition, attacks on collective bargaining have been rampant throughout the nation, as our job security, wages, health benefits, and pensions have been either reduced or slated for elimination.

Therefore, it is time to stand up for what is right. We applaud the action the Occupy Wall Street movement has taken to highlight the inequity and unfairness of the society in which we live.