Friday, August 10, 2012


Crimes of the Big Banks

Preface: Not all banks are criminal enterprises. The wrongdoing of a particular bank cannot be attributed to other banks without proof. But – as documented below – many of the biggest banks have engaged in unimaginably bad behavior.

You Won’t Believe What They’ve Done …

Here are just some of the improprieties by big banks:
  • Engaging in mafia-style big-rigging fraud against local governments.
  • Shaving money off of virtually every pension transaction they handled over the course of decades, stealing collectively billions of dollars from pensions worldwide.
  • Pledging the same mortgage multiple times to different buyers.This would be like selling your car, and collecting money from 10 different buyers for the same car
  • Committing massive fraud in an $800 trillion dollar market which effects everything from mortgages, student loans, small business loans and city financing
  • Pushing investments which they knew were terrible, and then betting against the same investments to make money for themselves.
  • Engaging in unlawful “frontrunning” to manipulate markets.
  • Engaging in unlawful “Wash Trades” to manipulate asset prices.
  • Participating in various Ponzi schemes.
  • Bribing and bullying ratings agencies to inflate ratings on their risky investments
The executives of the big banks invariably pretend that the hanky-panky was only committed by a couple of low-level rogue employees. But studies show that most of the fraud is committed by management.
Indeed, one of the world’s top fraud experts – professor of law and economics, and former senior S&L regulator Bill Black – says that most financial fraud is “control fraud”, where the people who own the banks are the ones who implement systemic fraud.
But at least the big banks do good things for society, like loaning money to Main Street, right?
Actually:
  • The big banks have slashed lending since they were bailed out by taxpayers … while smaller banks have increased lending.
We can almost understand why Thomas Jefferson warned:
And I sincerely believe, with you, that banking establishments are more dangerous than standing armies ….

- Umesh Shanmugam

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