portland independent media center  
images audio video
newswire article reporting global

economic justice | government

Bankers Nabbed In Bid-Rigging Scandal

Perhaps to catch up on these "Banksters" one should re-read a former article WHATS BEHIND THE JPMorgan, Bank Of America Probed Over Money-Laundering Allegations ?  http://portland.indymedia.org/en/2012/09/418154.shtml
A federal crackdown is proceeding quietly against bankers accused of systematically defrauding states, local governments and non-profits.

Since 2009, federal authorities have secured 19 convictions or guilty pleas as part of the investigation, including seven since April. The cases have put a spotlight on the municipal bond market, an esoteric corner of the finance world where prosecutors say Wall Street firms have repeatedly used inside information to pad their bottom lines at the public's expense.

"[T]hese complex, seemingly uninteresting backroom deals have a real impact on taxpayers," Richard Weber, head of the Internal Revenue Service's criminal division, said following the convictions of three former UBS (UBS) bankers last month.

Those implicated over the course of the investigation have come from firms including Bank of America (BAC, Fortune 500), JPMorgan (JPM, Fortune 500) and General Electric (GE, Fortune 500). Government agencies have collected more than $740 million in penalties, restitution and other fees from the institutions involved.

The probe targets bankers who have colluded about the offers they've made as they bid on contracts to invest municipal bond proceeds.

How the market works: State and local governments issue municipal bonds to fund things like road construction and school repairs. In some cases, they issue the bonds on behalf of non-profits or companies that will spend the money on projects benefiting the public.

The market for these bonds is massive, with more than $3.7 trillion outstanding as of the beginning of this year, according to the Securities and Exchange Commission.

Governments and other issuers don't typically spend all the proceeds from their bonds right away, instead investing some of the money and holding it for future expenditures.

To figure out how to invest that money, they hire brokers who advise on and manage a bidding process among financial institutions competing for their business. Bids are solicited from firms like UBS and JPMorgan, which submit the interest rates they're willing to offer on the bond proceeds.

More here:  link to money.cnn.com

No question 19.Sep.2012 07:25

Shaker

of the complicity or outright incompetence of those in government? Sometimes it just gets to the point where those who play the game, which has been transparent for years, need to do something different, or at least question the motives behind some action rather than throwing more money at the game. I'm not defending the banks or the houses that sponsor the issue of bonds, but our political system is failing, and this kind of shit is just proof of the failure, not the cause. These voters in states and municipalities that are caught in the interest rate swap deals need to do some serious housecleaning. It may be time to quit asking the thief for their advice on how to accommodate the theivery. Some imagination might help, but it seems that the banks employ everyone with that attribute, or buy off any others, such as those in government who are philosophically and ethically challenged. They steal for the same reason a dog licks its genitals: because they can. The joke isn't funny anymore.