Focus on Wall Street Crimes Will Continue After Election
Nov. 8, 2016 (EIRNS)—The major crimes of Wells Fargo and other of the biggest Wall Street and London banks, will continue to be a focus of Congress in the immediate aftermath of the election, continually posing the question of restoring Glass-Steagall.
A group of Democrats on the Senate Banking Committee— Elizabeth Warren, Jeff Merkley, and Sherrod Brown—have initiated a stream of letters to Securities and Exchange Commission (SEC) head Mary Jo White and other regulators, detailing suspicions of Wells Fargo’s criminal activities. As a result, the slow-to-act SEC has begun an investigation of Wells Fargo’s broker-dealer unit, since whistleblowers have told the Senate Committee that fraudulent brokerage customer accounts were created there, as well as in the retail branches. Wells has just paid a second, $50 million fine to the Consumer Financial Protection Board for excess charges to foreclosed homeowners, for new appraisals of their lost homes! And the Senators have been informed that Wells blackballed the thousands of employees it fired, damaging their ability to work, while richly rewarding the senior supervisors who pressured the employees to commit fraud.
Wells Fargo’s corruption now smells so, that the "reputational" damage may threaten the bank itself in the coming period. The Senate Banking Democrats clearly seem to be preparing the way for new, more damning hearings on Wells.
Today’s Wall Street Journal reported that the SEC had launched another investigation into fraud—derivatives fraud, in this case—against JPMorgan Chase, Deutsche Bank, Citigroup, and Bank of New York Mellon. The type of derivative is oddly named American depository receipts; they are derivative, or betting, securities, issued to U.S.-based investment funds by banks, based on European-listed stocks the banks have bought. These banks, however, were issuing the derivative securities without owning the stocks, directly violating their derivatives contracts.
JPMorgan Chase’s recent crimes, from sponsoring the Bernie Madoff Ponzi scheme on, are the sole subject of a whole new book just published—necessarily, a long one—entitled JPMadoff.... Its most recent fine to the SEC, $267 million for defrauding customers on the prices of financial products, was levied as recently as three months ago.
Moreover, there remains Rep. Maxine Waters’ stated intention to legislate the breakup of the Wells Fargo, "and if it breaks up other banks, so be it."