Wall of Shame



(some post-2008 news items)

(on Financial Institutions and Individuals)

It's true what they say: Money talks.

It says: Keep me out of cornholio prison.

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This 'Wall of Shame for WallStreet-and-MainStreet' page

! Note !
More news items related to ripping off
fellow citizens --- directly or indirectly ---
may someday be added to the list below.
Pictures may be added to go along with names.

Go to LIST below.
(post-2008-meltdown financial news items)
(That is, SKIP the following INTRODUCTION.)

Introduction :

For more than 7 years after the worldwide economic meltdown of 2007-2008, people (journalists, bloggers, writers-of-letters-to-editors, talking-heads/pundits) have been writing and talking about how there were plenty of 'financial people' --- from 'Main Street' as well as 'Wall Street' --- who should have gone to jail.

Around 6 years after the Congressional hearings started, a Democratic Congress managed to restore some of the common-sense regulations that were stripped from the laws around the year 2001. BUT ...

Still, 8 years after the panic, around 2016, no one has gone to jail for the egregious things that were done to foist packages of bad mortgages on trusting investors.

Some people may not be aware of the rotten things that were done. So ... some examples:

  1. 'Main Street' involvement ---
    'We will fill in the income blank for you' on mortgage applications :

    A couple of years after the global meltdown started, a documentary called 'House of Cards' was shown on some of the financial cable channels --- such as CNBC.

    That documentary revealed that 'Main Street' was not an innocent bystander while 'Wall Street' was peddling packages of 'toxic' mortgages.

    There were local/regional mortgage brokers who were helping/encouraging people to take out mortgages they could not afford. (Note: The brokers could have and should have been warning people that they could not afford the mortgages being written up for them --- but the brokers did not.)

    The documentary revealed that many of these 'Main Street' mortgage brokers had no financial background. They came from varied backgrounds --- such as physical therapy. They literally opened up 'mortgage broker' businesses on Main Street street corners.

    A couple of these brokers were interviewed in the documentary and admitted that when 'helping' someone get a mortgage (a loan to buy a house), these brokers would tell the applicants to leave blank the entry for income on the application form. The brokers then would 'help' the borrower by filling in an inflated income for them.

    Now comes the connection to Wall Street. These 'Main Street' mortgage 'brokers' (middle-men) took these mortgages (which were almost invariably destined to go into default) and sold them to Wall Street companies and big banks (like Goldman Sachs, JP Morgan, Wells Fargo, Countrywide Financial).

    The latter institutions grouped the bad mortgages together into 'derivative' packages --- to be sold to unsuspecting investors as triple-A rated investments. So the investment rating agencies, like Moody's Investor Services, had a hand in the dirty mess.

  2. Wall Street and big banks involvement ---
    Goldman Sachs short-selling email revealed ; Congress goes limp :

    Financial companies like Goldman Sachs were knowingly packaging bad mortgages into 'derivative' packages and aggressively selling those packages to investors around the world --- for example, to city government representatives in Sweden, as revealed in the 'House of Cards' documentary.

    But, not only was Goldman Sachs (GS) selling these bad packages of mortgages, GS was turning around and 'shorting' the mortgages --- to profit doubly.

      'Shorting' the mortgage packages means that GS was borrowing back these derivatives with the promise to return that same 'paperwork' to the lender at a future date. (The lender may get a small percentage interest for their trouble, thus encouraging them to lend out the 'paper'.)

      Then GS can turn around and immediately sell the 'paper' at the current value --- which is relatively high, because hardly anyone realizes the 'paper' includes lots of mortgages that are going to go into default.

      Meanwhile, unbeknownst to the lender, GS gets the word out that the 'paper' is bad, the price falls. GS buys the paper back at the new, lower valuation. Then GS can return the paper that they borrowed from the lender. But the paper-lender is now stuck with much lower valued paper.

      GS has made a tidy profit on the difference between the money received on selling the borrowed paper and the money spent to buy back the paper after the price dropped on news that the paper was downgraded in value.

    Note what was done here. GS has screwed the 'buyer-lender' of the 'paper' not once --- but at least twice:

    • 1) GS made a profit on the initial sale of the 'paper' to the buyer.

    • 2) The buyer becomes a lender of the 'paper'. GS borrows the paper, immediately sells it, then waits for the price to drop (with a little help from GS's 'little birdies'). Then GS buys the devalued paper and returns the paper to the buyer-lender.

    • 3-plus) If possible, GS does this second step multiple times --- if not with the same buyer-lender, then with others.

A crazy thing about the Goldman Sachs case is this: An email surfaced from one of the Goldman Sachs employees. The email spelled out that Goldman Sachs was knowingly selling bad packages of mortgages and then turning around to make a second profit by 'shorting' those bad mortgages. The email indicated that this was bound to work, because GS knew the underlying mortgages were bad and that the investments (the 'paper') would eventually 'tank' in value.

A second crazy thing is that Congress had Goldman Sachs before them giving testimony, around 2014. The CEO of Goldman Sachs ( Lloyd Blankfein ) was questioned. Also questioned at the hearings was the guy who wrote the email revealing that GS was knowingly selling bad 'investment instruments' and then turning around and shorting them. The email was available to Congress and they questioned both the author of the email and the CEO, Blankfein.

And the result of all that expenditure of taxpayer money on that Congressional investigation --- and on many, many other questioning sessions of various individuals in the private and public sectors, before the Senate and House, in the 2008 to 2015 time frame??

No one went to jail. Not one mortgage broker from 'Main Street'. Not one employee or CEO from 'Wall Street' or the big banks or the rating agencies.

The financial rot continues   (but the true culprits are not touched)

There have been some investigations of various banks and wall street firms over the years from about 2009 through about 2015.

The result is large fines on many of these 'institutions' --- often billion dollar fines.

Note that no individual is fined. Not a CEO. Not a Chief Financial Officer. Not a Vice President. Not a broker-employee. Absolutely no one is fined or jailed.

Hence there is no reason for these people to change their behavior. They know that they will never be jailed. They know that they will not even be fined, personally.

So who do these big fines of the 'institutions' hurt??

Answer: Their investors and their customers.

The investors are hurt because their stock in these companies is going to return lower dividends, as the company has to cut dividends to try to remain profitable in spite of the big fines.

In addition, the investors are hurt because the value and the growth of these institutions is 'stunted' because of the fines.

The customers of these institutions are hurt because they are hit with more and higher fees, as the company seeks new sources of income to try to remain profitable in spite of the big fines.

In addition, the customers of these institutions are hurt because they are subjected to higher interest rates on loans and lower interest rates on deposits, as the company seeks still more sources of income to try to remain profitable in spite of the big fines.

Meanwhile the CEO's, the Vice Presidents, and the board members keep receiving ever increasing salaries, stock grants, and stock options. And employee-brokers keep receiving their bonuses.

Where, in the laws passed (and currently retained) by Congress, is the basis for motivating these people to not bring the banking and finance system to another grand melt-down?

Answer: Nowhere. Individuals are protected under the current laws (or lack of them) --- and according to the way the laws are enforced by Executive departments of the federal and state governments.

There seems to be nothing in the laws to keep another grand rip-off from bringing down the global financial system.

After the repeal of the Glass-Steagall Act in 1999, and after the negotiations and mergers following the global meltdown of 2007-2008, the 'too big to fail' banks are even bigger.

For example, Bank of America took on the investment business of Merril-Lynch --- which would not have been allowed under Glass-Steagall.

Another 'too bigger to fail' example: JP Morgan took on the business of Bear Stearns.

So, the U.S. is set up to experience another global economic melt-down in the not-too-distant future --- probably to be started by poor (greedy, amoral) practices in the U.S. financial system.

There is no chance that additional laws will be passed to discourage financial mis-behavior in the 2016 to 2020 time frame. Republicans control Congress, and they want less regulation, not more.

If the Republicans get their way (eliminating almost all regulations), it is likely that the U.S. will approach another global economic melt-down even faster, next time.

So, all we U.S. citizens can do is try not to fret about it, and just watch the 2nd-coming of the global meltdown evolve --- or experience it as it sneaks up on us.


In the meantime, I devote this web page to accumulating news items relating to the 'once' (2007-2008) and future meltdowns.

I present the news items down this page --- most recent items at the top.

These are mostly items on 'Wall Street' financial institutions and people --- and on 'Main Street' financial institutions and people.

They are (at least initially) mostly items that I have collected from daily newspapers.

The items are mostly concerned with shedding light on mis-behaviors --- and the consequences of those behaviors.

How to navigate this page

You can scroll down through the items below. Alternatively ...

You can use an option like 'Find in This Page ...' of your web browser to search for key words, such as 'sachs' or 'fargo' or 'morgan' or 'bank' or 'mortgage' or 'lend' or 'fine' or whatever.

To augment the items below

Here are some links to web searches that can provide additional instances (and information) on shameful activities of various institutions and 'players' :

    "You put Lloyd Blankfein in pound-me-in-the-ass prison for one six-month term, and all this bullshit would stop, all over Wall Street," says a former congressional aide. "That's all it would take. Just once."

After doing one of these searches, simply change some of the keywords to perform searches tailored to what you seek.

Financial News Items   (most recent at the top)

2016 Feb 04 :
Wells Fargo said it has agreed to pay $1.2 billion to settle a government lawsuit related to its Federal Housing Administration home mortgage program. The bank said it reached the agreement with the U.S. Department of Justice, two attorneys general, and the Department of Housing and Urban Development.

In 2012, the federal government sued Wells Fargo, accusing the bank of misrepresenting the quality of thousands of loans in order to be eligible for federal loan insurance. The government wanted to recover money that the FHA paid after borrowers defaulted on Wells Fargo mortgage loans.

Wells Fargo, the country's largest mortgage lender, said the settlement is related to the 2012 case and other pending or potential cases.

2016 Jan 15 :
Goldman Sachs has reached a $5 billion settlement for its role in the sale of mortgages leading into the housing bubble and financial crisis. Goldman Sachs will pay $2.39 billion in civil monetary penalties, $875 million in cash payments, and provide $1.8 billion in the form of mortgage forgiveness and refinancing.

    [NOTE: Who is going to follow-up and audit/enforce the latter?]

The settlement was reached between the U.S. Department of Justice, the attorneys general of Illinois and New York, and other regulators.

2016 Jan 06:
JP Morgan Chase will pay $48 million to settle the last in a series of missteps in its handling of foreclosures after the 2008 credit crisis, according to the Office of the Comptroller of the Currency (OCC). The U.S. bank will be fined for failing to meet terms of a 2013 accord over mortgage servicing flaws, the agency said. The fine will close out JPMorgan's OCC obligations from the earlier order, under which it had previously faced $2 billion in penalties and payments to borrowers.

2015 Dec 19 :
JPMorgan Chase is paying $307 million to settle federal charges of failing to reveal conflicts of interest from steering clients into certain investments tied to its business.

The civil settlements were announced by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

JPMorgan, the largest U.S. bank by assets, admitted wrongdoing in the settlements.

    I am shocked. I have never seen an 'admission of wrongdoing' in cases like these.]

The company is paying $127.5 million penalty in the settlement with the SEC and another $127.5 million in restitution plus $11.8 million in interest.

Under the CFTC agreement, the bank is paying a $40 million penalty.

2014 Jul 28 :
A deal to resolve federal claims against Goldman Sachs Group Inc. over mortgage-backed securities sold to Fannie Mae and Freddie Mac leading up to the financial crisis could cost the bank $800 million to $1.25 billion. [More like 5 billion. See 2016jan15 above.]

The Federal Housing Finance Agency filed 18 lawsuits against Goldman and other banks in 2011 over about $200 billion in mortgage-backed securities that later went sour.

2014 Jul 15 :
Citigroup Inc. will provide $7 billion in cash and consumer relief to settle federal and state investigations into the sale of defective mortgage investments during the subprime housing boom, the Wall Street giant and federal official said.

Several states will share the settlement, which includes a record $4 billion in civil fines and $500 million in repayments for public pension fund and other losses, plus $2.5 billion in consumer relief.

    [NOTE: Who is going to follow-up and audit/enforce the 'consumer relief'?]

The settlement came after a two-year investigation and extensive negotiations.
In an internal email quoted by federal officials, a Citi trader said that 'we should start praying' after a review of a sample of thousands of mortgages the bank bought in 2007 showed a large amount of them had 'material defects'.

'It's amazing that some of these loans even closed at all', the trader said.
Citi said it took a related pretax charge of $3.8 billion in the second quarter, which led the bank to report a 96 percent drop in earnings.

    [NOTE: Apparently, the fines will amount to about one to two quarters of earnings. Not a penny coming from the executives' income, however.]

2014 Jul 01 :
Title: French bank fined $8.97B in sanctions case
French bank BNP Paribas agreed to pay almost $8.97 billion over charges it violated U.S. sanctions against countries such as Sudan, and it faces a one-year suspension of parts of its U.S. dollar-clearing business.
BNP was ranked recently as bigger than any U.S. bank, with $2.5 trillion in assets.
Rumors had circulated last month that the fine might top $10 billion. The matter was considered serious enough for France that President Francois Hollande appealed to President Barack Obama to ensure that the penalty was fair.

2014 May 20 :
Credit Suisse pleaded guilty to helping Americans cheat on their taxes, making it the first bank in more than a decade to admit to a crime in a U.S. courtroom and marking the end of a three-year probe of the Swiss firm. The bank will pay more than $2.5 billion as part of an agreement with U.S. authorities.

2014 Apr 09 :
Title: Big banks must raise $68 billion
The eight biggest U.S. banks must raise a total of about $68 billion in capital by 2018 to comply with a new rule designed to prevent another financial crisis ...

U.S. regulators finalized the rule to limit bank's reliance on debt. Banks will have to fund part of their business through less risky sources such as shareholder equity, rather than borrowing money.

    [Interesting. So the shareholders carry the risk, not the banks. Sounds pretty risky for the shareholders.]

"In my view,this final rule may be the most significant step we have taken to reduce the systemic risk posed by these large, complex banking organizations', said Martin Gruenberg, chairman of the Federal Deposit Insurance Corp.

The rule would apply to JPMorgan Chase, Citigroup, Bank of America, Wells Fargo, Goldman Sachs, Morgan Stanley, Bank of New York Mellon, and State Street.
The eight biggest banks will be required to hold capital equal to 6 percent of their total assets.

2014 Mar 19 :
Wells Fargo created an elaborate guide for how to produce missing documents to foreclose on homeowners, according to a lawsuit that has caught the attention of state and federal regulators.

The bank denies wrong-doing, but the allegations rekindle claims that lenders, including Wells Fargo, used forged and shoddy paperwork during the recession to quickly foreclose on struggling homeowners, a practice known as 'robo-signing'. Those charges led to a $25 billion national mortgage settlement.

Bankruptcy lawyer Linda Tirelli said she found a 150-page manual instructing Wells Fargo lawyers on how to process foreclosures when a key document, known as an endorsement, is missing. Lenders need endorsements to prove they own the mortgage before they can foreclose on a homeowner.

2013 Jul 23 :
Title: UBS mum on size of mortgage settlement
UBS [Swiss banking giant] said it agreed to settle a lawsuit brought by U.S. regulators alleging the Swiss banking giant misrepresented mortgage-backed securities sold to Fannie Mae and Freddie Mac in the years leading up to the subprime loan meltdown.

UBS did not specify the size of the settlement with the Federal Housing Finance Agency (FHFA), the regulator for Fannie and Freddie. But in a statement, the bank said its second-quarter earnings would include a $746 million pretax charge for litigation matters related to its previous housing market activity.

The FHFA lawsuit alleged more than $900 million in losses by Fannie and Freddie from the bad UBS bonds.
UBS had been fighting the suit but lost an appeal in federal court in April.

The FHFA settlement was part of $922 million in pretax charges UBS said it was taking against second-quarter earnings for litigation [known as 'wrong-doing' among moral people who call a spade a spade].

The bank previewed [the 2nd quarter earnings] saying profit rose to $735 million, beating analysts' expectations.

    [NOTE: It seems UBS can pay these fines with about one quarter of annual earnings.
    NOTE: No fines come out of the UBS executives' or board members' incomes.]

UBS halted dividend payouts after its 2008 bailout by the Swiss government, and it has paid only modest symbolic shareholder payouts in the past two years.

Concluding Observations   - A Parting Shot :

2016 Mar 06:
"A Daily Press [Virginia newspaper] analysis of 474,000 court records representing 10 years worth of Hampton Roads circuit court cases yielded startling results: Fewer than half of the homicides reported in the area resulted in anyone going to prison. Fewer than half of the hundreds of reports of shooting in the streets, at cars, or at buildings resulted in jail time. And whites are far more likely than blacks to get plea deals that call for no jail time."

Commentary: And people in the financial industry --- those who ruin people's retirement and their hard-working lives and their ability to pay for health care --- get no jail time at all. They do not even have to bother with a plea deal.


Another Parting Shot :

2014 Aug 29:
According to a survey of 100 banks by MoneyRates.com :

  • Average overdraft fee: $32

  • Average minimum balance to open an account: $400
    [a nice 'float' for the banks]

  • Average minimum balance to get free checking: $5,440
    [an even nicer 'float']

Commentary: The banks 'entrap' your money and then invest it in various ways. We have to hope they invest it in good ways --- not in buying bad mortgages or in paying executives exhorbitant 'remuneration' and giving them outlandish retirement packages.

Personally, I don't invest in banks. I have stock in many companies --- but not one bank. I just don't think you can trust the executives and board members to behave in a responsible, good-for-the-country way. With all that money surrounding bank executives every day, they cannot be trusted to resist their greed impulses. And most of these people have highly developed ('I am worth your life savings') greed impulses.

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Page was created 2016 Jun 10.

Page was changed 2017 Jun 18. (Some minor format changes, and a few spelling corrections.)

Page was changed 2018 Oct 17. (Added css and javascript to try to handle text-size for smartphones, esp. in portrait orientation.)