Fines for them – jail for you
Below is a reality check – this is how the world really works.
Companies that are accused of massive fraud and are “too big to fail” (especially if they are transnational banks) – get fined and the directors walk away without charges. Have a look at this press release from Reuters . Note also those phrases that ALWAYS seem to accompany such settlements, i.e. “without admitting wrongdoing” and “no individual charged”.
We found it fascinating that there is “no admission of any wrongdoing” and yet millions of dollars are paid in fines. How odd!
However – if a lowly individual does anything wrong – the book gets thrown at the person (and quite rightly so). See here for the case of the rogue trader that cost UBS about $2.3 billion. Seven years in the slammer!
The point about this comparison – is that there are 2 standards, one for “them” and one for you. This applies to Australia, just as it does in the western world.
The ASP will fully examine the legislation that protects directors from having perpetrated corporate fraud. It is a nonsense to fine a corporation (which has no soul and no conscience) – while directors are free to repeat their actions.
British Socialist – brain dead
On 5th September 2012, the Socialist Party of Great Britain and Positive Money entered into a debate. This debate is available on Youtube here.
If you are short of time – start watching the video at the 18:20 mark. Prior to that, the Socialist representative makes an idiot of himself by claiming that banks do not create money, and that capitalism is to blame. In reality, we do not have a capitalist system – but rather a crony capitalist, corporate welfare and fascist system. This tactic is called that of a “straw man”.
If you are a serious student of money – and happen to watch the whole video, congratulations! You will now know more that 99% of all politicians and economists.
(My thanks to Liam for sending in this article)
Posts tagged ‘Fraud’
The following is a transcript of a recent speech given by Professor William Black on an Economics Panel regarding the fradulent roots of our current crisis and the urgent need for criminal prosecutions among major US banks
In the Savings and Loans crisis, which was 1/70th the size of this crisis, our agency made over 10,000 criminal referrals and that resulted in the conviction on felony grounds of over 1,000 elites in what were designated as major cases. And to pick up on what’s just been said, this is not just some sidelight to economics, this is why we have recurrent intensifying crises, is these epidemics of fraud from the C-Street—from the CEOs and CFOs.
In the Savings and Loans crisis, the inevitable National Commission said that fraud was invariably present at the typical large failure. In the Enron era, always frauds from the very top of the organization, and in this crisis the frauds came from the very top of the organization again. But what’s different in this crisis? In this crisis, the same agency that I worked with that made over 10,000 criminal referrals in a tinier crisis made zero criminal referrals. They got rid of the entire function. And so there are zero convictions of anybody in the elite ranks of Wall Street. And if they can defraud us with impunity they will cause crisis after crisis and they will produce maximum inequality.
- William Black at Occupy LA (educationclearinghouse.wordpress.com)
- Professor Black on Endemic Financial Fraud (adask.wordpress.com)
- 4 Simple Steps for Taking Your Money Out of the Vampire Banks (alternet.org)
- Wall Street ends worst week since September (bottomline.msnbc.msn.com)
- Real Free Market Capitalists Demand that Financial Fraud Be Prosecuted (zerohedge.com)
I am sitting in front of my computer and scheming, or, more precisely, scamming. I am inventing scams as a way of raising awareness of how probability theory can be used for deception.
My first scam is my lottery project. Suppose I create and run a private lottery. I will award minor payments to some participants, while promising a grand prize of one hundred million dollars. However, there will be a very small probability that anyone will win the big payout. My plan is to live lavishly on my proceeds, hoping no one ever wins the big ticket.
The beauty of this scheme is that nobody will complain until someone scores the top prize. After all, everyone has been receiving what I promised, and no one realizes my fraud. If nobody wins the big award until I retire, I will have built my life style on deception without having been caught.
Suppose someone wins the hundred million dollars. Oops. I am in big trouble. On the other hand, maybe I can avoid jail time. I could tell the winner that the money is gone and if s/he complains to the police, I will declare bankruptcy and we will all lose. Alternatively, I can suggest a settlement in exchange for silence. For example, we could share future proceeds. Probability theory will help me run this lottery with only a small chance of being exposed.
But even a small chance of failure will cause me too much stress, so I have come up with an idea for another scam. I will write some complicated mathematical formulas with which to persuade everyone that global warming will necessarily produce earthquakes in Boston in the near future. Then I’ll open an insurance company and insure everyone against earthquakes. As I really do not expect earthquakes in my lifetime, I can spend the money. I’ll just need to keep everyone scared about earthquakes. This time I can be sure that I won’t be caught as no one will have a reason to complain. The only danger is that someone will check my formulas and prove that I used mathematics to lie.
Perhaps I need a scam that covers up the lie better. Instead of inventing an impossible catastrophe, I need to insure against a real but rare event. Think Katrina. I collect the money and put aside money for payouts and pocket the rest. But I actually tweak my formulas and put aside less than I should, boosting my bank account. I will be wealthy for many years, until this event happens. I might die rich but if this catastrophe happens while I’m still alive, I’ll declare bankruptcy.
Though I was lying to everyone, I might be able to avoid jail time. I might be able to prove that it was an honest mistake. Mathematical models include some subjective parameters; besides, everyone believes that nature is unpredictable. Who would ever know that I rigged my formulas in my favor? I can claim that the theory ended up being more optimistic than reality is. Who could punish me for optimism?
Maybe I can be accused of lying if someone proves that I knew that the optimistic model doesn’t quite match the reality. But it is very difficult for the courts to punish a person for a math mistake.
When I started writing this essay, I wanted to write about the financial crisis of 2008. I ended up inventing scams. In a way, I did write about the financial crisis. My scams are simplified versions of what banks and hedge funds did to us. Will we ever see someone punished?
Yesterday I came across a few people suffering from these same problems and they seem to be the forgotten victims and as self employed persons they are not going to get a welcome in the local Dole office far from it I can tell you from firsthand experience
The bottom line here is nobody gives a dam about the self employed
But the big boys and the lads that kept this Ponzi scheme going are now the very people getting the big Jobs in NAMA and the little people are tossed by the wayside to rot!
Are you happy with that?
Then do something about if you’re not!
This article was highlighted to me this morning and might be of some interest to some of you .
Some significant events are in progress, extremely important developments in the grand pathogenesis that reflects the deep decay and deterioration in the US financial structure. The most recent events pertaining to mortgage loans, home foreclosures, and disclosed fraud carry great potential to open extremely wide cracks in the American social order. Revealed systemic fraud is slowly coming into the open. Civil disobedience has already entered the arena of popular protest. However, the recent events surrounding illegal home foreclosure seizure of properties elevates the exposed fraud to a very clear high new level. This is a boil ready to break open, releasing financial puss
Full article source here http://www.marketoracle.co.uk/Article23276.html