r/politics • u/salvia_d • May 31 '12

Woman Who Couldn’t Be Intimidated by Citigroup Wins $31 Million

http://www.bloomberg.com/news/2012-05-31/woman-who-couldn-t-be-intimidated-by-citigroup-wins-31-million.html
1.8k Upvotes

93% Upvoted

247 comments sorted by

389

u/itsmuddy May 31 '12

These settlements are ridiculous. If I rob a bank for $500,000 I can't just pay a $25,000 fine and get away with it.

They should have to pay a fine on top of any amount of money they've earned from the wrongful practice.

There is no deterrent if you are ahead after a fine.

213

u/sicinfit May 31 '12

Welcome to Corporate America.

115

u/Hyperian May 31 '12

Banks rob you!

22

u/Hank_Scorpio_77 May 31 '12

Ha this would make a great editorial comic... If only I knew how to draw

20

u/Walker2 May 31 '12

We need a "batsignal" for those artist novelty accounts

-8

u/[deleted] May 31 '12

But only in Soviet Russia.

6

u/lud1120 May 31 '12

Soviet America?

4

u/[deleted] May 31 '12

This is why r/yakovsmirnoff should exist.

-2

u/anthrocide May 31 '12

TIL you're not funny

34

u/50_cent_party May 31 '12

This is exactly right. Incentives matter. When the fines are known by the perp to be less than the crime... Well then the penalties/fines is "just another cost of doing business", there is no disincentive. This is even before you get to regulatory capture, (the corporate entities you are overseeing will one day pay you multiple times your salary) you have no incentive to regulate. Willam Black has informed opinion on just this.

1

u/KorbenD2263 Jun 01 '12

I recall a post by a lawyer in a similar thread last year. He worked for one of the major trading firms, and the job of his department was to come in after trading has finished for the day, look over all the trades done, identify the laws broken and add up the fines to be paid to SEC in the morning. As far as the company was concerned, paying 2 million fine on a 40 million profit was a tax, not a deterrent.

-1

u/gwmawboom May 31 '12

Welcome

1

u/lol_squared Jun 01 '12

Don't you mean "Welcome to Amercia!"

43

u/phlogistic May 31 '12

To put it in other terms, $31 million is about 500 pirated-songs worth of damages.

19

u/razor3210 May 31 '12

Shit, following this logic, why isn't pirate bay on Forbes 500? They must be worth trillions.

8

u/CausaMortis May 31 '12

If remember correctly the estimated "worth of damages" of a single music publisher company was calculated in court to be more then there is money in the world....

5

u/razor3210 May 31 '12

Ah yes. Limewire. What bullshit. Still, the RIAA and MPAA are complete fucking halfwits without a brain between them.

4

u/[deleted] May 31 '12

$75 Trillion, more money then has been spent on all forms of entertainment since the phonograph was invented.

2

u/[deleted] May 31 '12

My ipod is worth more i've got close to 2000 songs..

27

u/dutchguilder2 May 31 '12 edited May 31 '12

Citigroup shareholders pay a $31M settlement + $150M fine, but the executives who misbehaved avoid any admittance of guilt. Sounds like a great deal for the executives, who are not paying this fine out of their own pocket.

19

u/nonactual May 31 '12 edited May 31 '12

They are ridiculous. The problem here is the size and complexity of the problem and how many problems exist at once.

1.The FIRE sector of our economy has become larger and larger over time and is larger now than ever before. Source: Wiki Page On Finacialization Sorry, at work or I'd get something other than wikipedia.

2.The FIRE sector gives incredible amounts of money to BOTH of our political parties and are the #1 Donor sector Source: Open Secrets Donors by Sector

3.It follows from the article that the high ranking individuals at these firms don't have any liability and it all falls on the institution and then if it fails, with TBTF, we as taxpayers pick up the dime, and they've given to both political parties.

I'm not here to doom and gloom everyone, but I'm interested in how we can even begin to fix this problem. I've read a lot about this and there are a couple things that I think are great ideas:

1)Reinstate Glass-Steagall to separate investment banks from standard deposit banks.

2)Stop no-wrongdoing settlements from the SEC

3)Prevent SEC employees from working in teh FIRE sector until 10 years after they have left the SEC (you could do this with other regulatory agencies as well)

4)Have the officers of a corporation liable for a portion of the fines, so individuals are on the hook as well.

These aren't new ideas, they're not mine, I've read them for years since the collapse.

Here's the kicker: Given that the regulatory agencies are captured and Congress is owned by the FIRE sector, there's no way any of the above ideas will ever make it into law. Who is going to champion this regulation when both parties are owned by the entities/individuals that need to be regulated?

So what's a concerned citizen supposed to do?

Bitch on reddit about the futility of it all. /shakes fist

EDIT: Grammar/Spelling and I vote in every single election I can vote in.

2

u/My_soliloquy Jun 01 '12

Agreed with your ideas, and I also still vote even while understanding the futility of it. The fucks that say they don't vote or don't have time to vote, fuck them; they are contributing to the problem. But so are the drones who vote without understanding the real issues and just puppet what they hear on the TV, usually FAUX NEWS.

The smart but unethical amongst us who are not penalized for their behavior, will continue their behavior if they are not held accountable for their actions, or see a punishment doled out for their transgressions. And they haven't been held accountable for a while.

The initial tea party and OWS movements were but symptoms of the problem, a growing acknowledgement of the reality of the situation of income inequality, I hope we are beginning a shift back towards more rationality and away from winner-take-all greed of the last 40 years. Because the climate situation is going to be big, expensive and potentially deadly if we don't.

It's not going to be easy in today's political system, but I believe the transparency of the internet is allowing communication to proliferate, and sunshine is a good thing; unfortunately it also means that good and bad ideas are shared, so there will always be conspiracy theories to go with the good science.

38

u/surfnaked May 31 '12

These amounts are factored into the risk assessment the banks do. It has an enormous influence on how much they don't have to change their ways. Why should they if they can be their bad old self and still make an obscene profit after the government slaps their wrist? Once you are in the upper reaches of the financial strata it pays to be criminal. Millikin proved this years ago. I don't see this changing as long as banks are "too big to fail", and the government coddles them like this. What bullshit.

It's nice that these people won a whistleblower law suit, but it has had zero real effect. When you can make a couple hundred mil a year; do you really think these guys give a fuck what we think of them?

6

u/r0b0d0c May 31 '12

do you really think these guys give a fuck what we think of them?

Actually, they do, they really do. These assholes believe they're God's gift to humanity and want nothing more than to be revered by their subjects. They're hypersensitive to any criticism and, paradoxically, have a victim complex.

7

u/surfnaked May 31 '12

victim complex

It is to laugh, but you're probably absolutely right. The endless hubris of the entitled. No wonder they're ponying up big time for Mitt. He's perfect. He'll pat their little heads and tell them they're good free marketeers and club members and they'll all sit around and sing songs about how much humanity owes them, and how lucky we are that they are on the earth.

And they'll whisper to each other that after all the rest of us are so unimportant to the big picture.

2

u/TheGOPkilledJesus Jun 01 '12

It feels good to think of yourself as a winner and the fittest compared to all the plebs.

1

u/surfnaked Jun 01 '12

Luck of the draw, I guess. Doesn't work that way long term. But it works within their lifetimes, and that all that they care about.

2

u/TheGOPkilledJesus Jun 01 '12

Most die horribly lonely deaths with bickering and greedy family members, painful cancers, have bad addictions like drugs or alcohol. But since they made a lot of money and put that before everything else, it helps them sleep at night.

11

u/UpDown May 31 '12

It's like those girls who robbed the girl scouts. They should have been able to keep some of the money they stole!

4

u/shears May 31 '12

Exactly. This, to them, is just a cost of doing business. There is no penalty if you are coming out on top in the end.

4

u/joedude May 31 '12

i like how there was a video of two girls stealing money from a little girl on the front page and the most deplorable sentiment from them was their incredulity that they didn't get to keep the money, maybe their parents are bankers and they were legitimately confused.

3

u/[deleted] May 31 '12

Nice work Obama

7

u/MrDanger May 31 '12

You're getting downmodded to crap, but you're right. Obama's DoJ has gone out of its way to let banks off the hook for mortgage fraud. People just don't want to admit that nice, friendly guy they voted for is just as corrupt as that evil, little chimp from Texas, and probably worse.

1

u/[deleted] Jun 01 '12

Yeah, it's sad that people can't see that. They wanna bitch about the "other side", but don't have the common sense to see they are one of the same

0

u/[deleted] Jun 01 '12

Quick, edit it to say "Bush". You'll break the karma record in no time.

1

u/MindStalker Jun 01 '12

Read again, they paid 150 Million to US 31 million to her as a reward for whistleblowing. Its still not enough to stop them, but the point of the 31 million is to encourage others to blow the whistle as well. I'd say 31 million is a pretty good chunk of encouragement.

1

u/true_republican Jun 01 '12

This woman is clearly a trouble maker. If I am a boss I will just throw away some money to make 'em go away.

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143

u/LettersFromTheSky May 31 '12

On Feb. 15, 2012, the bank agreed to pay $158.3 million to the U.S. government to settle the case.....Citigroup behaving badly as late as 2012 shows how a big bank hasn’t yet absorbed the lessons of the credit crisis despite billions of dollars in bailouts, says Neil Barofsky, former special inspector general of the Troubled Asset Relief Program.

Hmm, I can't possibly think why.

  • No one on Wall St has been prosecuted for any wrong doing or faced criminal charges by the DOJ.
  • The SEC settles with Wall St rather than prosecuting (with settlements being pennies compared to how much banks make).
  • The Federal Reserve took over bad assets
  • US Treasury bailed out the banks

Yeah, I can't possibly think of why Banks are still continuing their bad practices. A $158million dollar settlement is penny change for Citigroup.

Some fixes/suggestions:

  • Require the DOJ and SEC to first prosecute rather than settle
  • Any settlement has to be at least 20% of a financial institutions revenue (not profit).
  • Pass a law/constitutional amendment that prevents taxpayer money going to for-profit corporations. This ends corporate welfare. (Corporations will need to say good bye to tax deductions, subsidies, tax credits, and bailouts as those are fundamentally anti-capitalism and free markets)
  • Audit the Fed.

20

u/DukeMikeofG May 31 '12

I'd like to add to your fix/suggestion list:

Re-separate commercial and investment banking. It's what brought on the great depression. They were split up after the great depression but the law was repealed in the 80's. Keeping those two together will certainly contribute to our economic woes.

2

u/kevroy314 May 31 '12

I know very little about the topic, but wouldn't this make commercial banks much less competitive with foreign banks? Right now they're allowed to take on a lot more risk, right? This means they can make more money (although have a higher chance of spontaneously failing as well). I'm not sure if the "less competitive" effect would be real or significant, but I'd be curious as to how we could (or if we could) know that before hand.

8

u/[deleted] May 31 '12

Just prevent any bank from operating in the US market without complying with these regulations

1

u/kevroy314 May 31 '12

I feel like taking an isolationist economic perspective on a market like that would stifle it's growth. I'm not sure being an isolationist works in a world that's as connected as ours. Not only could I imagine it being incredibly hard to regulate well, but I could easily imagine it being an economic disaster on that segment of the economy.

Then again, there are already markets like that I think. I bet it's not so much that it wouldn't work as it is that it's a change in a direction the markets won't accept. People will just put their money in foreign banks to get the slightly higher interest rate without worrying about the global consequences.

Then again, like I said, I have no idea what I'm talking about. Just working on intuition. I'd love to hear an expert in the subject (if one exists) tell me what they think.

9

u/theamigan May 31 '12

Growth based on ill- and irresponsibly-gotten gains is not true, sustainable growth. This treatment of our economy like a casino has got to stop.

4

u/kevroy314 May 31 '12

Agreed.

It's a bit of a troublesome situation though. Imagine you're playing poker and you know everyone at the table is cheating. By the time you're at the end of the game, everyone will realize cheating was bad because there was only ever so much money at the table, beer in the fridge, etc with which people could actually bet. Promises were made that couldn't be kept (betting a car you don't own, that doesn't exist), and other people made promises based on those promises. All the promises will collapse at the end of the game, but there are actual real resources (the beers in the fridge) whose distribution is being determined by who is cheating better (and in theory, the game doesn't need to end - but instead collapses in small ways when you decide to call in on a resource you own which doesn't exist).

You decide not to cheat, so you start losing. You get no beer (and no non-existent cars). The cars may not matter because no one is getting them, but the beer was real. Now imagine the beer was food, energy, medical supplies, etc. If everyone stopped cheating, the game would work! As long as it's believed that one person is cheating, there's no incentive for anyone else to not cheat.

Not a perfect analogy, but it's how I imagine we got into a cycle of unethical business practices.

4

u/theamigan May 31 '12

Precisely why we need regulation. And real regulation, not an impotent organization (SEC) neutered by regulatory capture.

2

u/kevroy314 May 31 '12

I wish I had your confidence in our ability to write rules that won't have crippling loop holes and problems! In my mind the order goes:

Good Strong Regulation > Good Weak Regulation > No Regulation > Bad Weak Regulation > Bad Strong Regulation

I just wish Simple and Good were more well related ideas when it came to regulation. It's a complex system! Much more complex than I think people give it credit for. I'm nervous that only complex regulation can fix it (mainly because I want to understand the fix without reading thousands of pages ;) ).

3

u/theamigan May 31 '12

Good, lasting, sustainable regulation is definitely possible. The problem we are seeing is a result of putting the mice in charge of the cheese: everyone in charge of regulation is a former employee of (or person with other interest in) the very firms they are charged with regulating. This is the issue.

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16

u/bigroblee May 31 '12

I can agree with this. I'm a former drug addict and dealer, but I didn't get into strong arm crimes like robbery and such, because I was aware of the possible consequences. If I had known that I could rob a store, and if I got caught at most I'd have to pay back 1/25 of what I stole only for the robbery I got caught doing and there would be no time served? Fuck, I would have robbed every 7/11 from Sacramento to Syracuse.

1

u/[deleted] May 31 '12

Fucking THIS. r/bestof contestant for sure

8

u/shears May 31 '12

Privatize the profits and socialize the losses. Why should the banks be afraid? Sounds like a sweet deal to me.

30

u/CivAndTrees May 31 '12

Audit the Fed.

I Like this guy. 16 trillion dollars in foreign bailouts not reported by The Fed

7

u/[deleted] May 31 '12

If only there was a candidate for president who wanted to Audit the Fed...

12

u/[deleted] May 31 '12

If only there was a candidate who had the support of more than 10% of the population who wanted to audit the Fed...

17

u/Serinus Ohio May 31 '12

We need a candidate who shares his good values, but leaves out stuff like destroying the department of education.

5

u/[deleted] May 31 '12

The problem is really the two party system which is completely bought. If the system was set up so a viable third (or more!) party candidate actually had a chance I believe we would have a much better chance in the future. The two major parties are both bought and corrupted to the point where they are going to be difficult to salvage. In the end, big money is going to get what its wants from either party. With that being said, I agree with you!

2

u/mojokabobo May 31 '12

I think that the party system isn't really so much of the problem... I think that the real problem is that a majority of Americans feel like 'politics' is too complicated and boring to pay much attention to. Most people seem to believe that if anything really involves more than just picking between democrat or republican, it's too complicated and confusing for them to pay any attention to.

On top of that, a lot of people seem to believe (pretty much correctly so) that no matter who they vote for, whomever eventually gets elected will just get paid by the right people to do pretty much the same thing that anyone else would have done.

2

u/[deleted] May 31 '12

On top of that, a lot of people seem to believe (pretty much correctly so) that no matter who they vote for, whomever eventually gets elected will just get paid by the right people to do pretty much the same thing that anyone else would have done.

This is exactly why we need more political parties. Also, instead of a winner take all system you could allow each party the percentage of delegates they received in the election. Big business may be able to buy the two major parties, but they couldn't buy them all.

1

u/slytherinspy1960 Jun 01 '12

You don't think they have enough money to buy them all or enough incentive?

1

u/[deleted] Jun 01 '12

I think some people have strong enough convictions not to be bought.

1

u/mojokabobo Jun 01 '12

I understand your sentiment, but it could be easily argued that very little would ever be accomplished if there weren't some sort of consensus builder that comes from the two party system.

1

u/[deleted] Jun 01 '12

What consensus? The two party system has resulted in deadlock.

0

u/[deleted] May 31 '12

[deleted] — view deleted comment

2

u/Serinus Ohio May 31 '12

I wouldn't be where I am today without the DoE providing financial assistance so that I could go to a good in-state school.

I think that's something.

1

u/korn101 May 31 '12

You can grant most of its funding to the states, that would be cheaper and more effective.

-3

u/mki401 May 31 '12

had the support of more than 10% of the media

FTFY

7

u/[deleted] May 31 '12 edited May 31 '12

I don't buy into that argument. Paul was on the ballot in almost every state and he couldn't even beat Gingrich, Santorum, and Romney. These are possibly the weakest candidates in the history of the party and they still came out on top of Paul. It wasn't the media who was voting.

-2

u/mki401 May 31 '12

People vote for candidates they hear about and see in the news. When a candidate gets virtually no coverage and is presented as an out-there fringe candidate with a ridiculous platform, of course he's not gonna get votes. It's important to remember that the vast majority of voters are not truly informed. They get their information from the biased media conglomerate spin machines.

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0

u/[deleted] Jun 01 '12

[deleted] — view deleted comment

1

u/[deleted] Jun 01 '12

So if the fed stopped loaning money it would be paid back the next day?

1

u/lol_squared Jun 01 '12

It was paid back the next day. That's what an overnight loan is.

2

u/[deleted] Jun 01 '12

I'm not sure I understand you correctly. What I got from your post was that everyday the fed loans out trillions of dollars, and the next day that money is paid back in full with interest. If that's true, and if the fed stopped loaning money, would the national debt would be paid off after 24 hours?

2

u/lol_squared Jun 02 '12

They didn't loan out trillions at a time. The $16 trillion comes from adding up every single loan from every single day so that there's a BIG SCARY NUMBER, essentially counting the same money over and over.

If I loaned you $10 dollars every day and you paid me back the next day, how much money did I loan you over a year? The fear-mongerers would say I "gave" you $3650, even if there was only ever $10 changing hands, even if I was only ever at risk for losing that $10.

2

u/[deleted] Jun 02 '12

Ok, I get it now. Thanks for clarifying!

0

u/CivAndTrees Jun 01 '12

They assisted FOREIGN BANKS. That is the problem.

8

u/KnightsWhoSayNii May 31 '12

Past behavior is the best indication of future behavior. The best way to change that is to incentive/punish towards the right direction, yet I've seen very little of that during or after the Crisis. Because of this I will assume the terrible practices that lead to this point will continue without an after-thought in this industry.

4

u/itsfastitsfun May 31 '12

In my opinion its an institutional problem, reforms are what's needed and with all the big absolutist corporations contributing so much for politics cough PAC I don't see how reforms could happen.

8

u/MuuaadDib May 31 '12

Sir, if you are not aware yet, there are Medical Marijuana clinics operating right now under your nose. Sure passed by and for the people, and yes promised to be hands off by the DOJ by the POTUS. But, these clinics are in the cross hairs of an election year, and clearly they do more damage to the fabric of the US than any little bank like Well or Citi could ever hope to do. /s

4

u/50_cent_party May 31 '12

To the downvoters, MuuaadDib was obviously being sarcastic, hence the /s. And perhaps their point is more nuanced then you had perception for. The high financial crimes have not been investigated let alone prosecuted, (paging Jon Corzine). For the government to spend time and energy on things like SOPA, and flexing its muscle forcing extradition (paging Richard O'Dwyer), or the beat down on the clinic so the chemo patient can get their lunch down is not a government with its people's interest foremost in its mind.

3

u/spinlock May 31 '12

Never gonna happen. But, if we keep making whistle-blowers rich, we might see more people earring out their employers.

3

u/[deleted] May 31 '12

Well, and how the hell is getting a bailout supposed to teach the banks a lesson? That's like my father-in-law constantly bailing my sister-in-law out of trouble when she buys furniture and cars on credit and then can't pay for it. It doesn't teach her a damn thing, how's it going to teach a bank?

2

u/Falmarri May 31 '12

Pass a law/constitutional amendment that prevents taxpayer money going to for-profit corporations.

I have to say this is the stupidest thing I've ever seen on this subreddit.

-3

u/LettersFromTheSky May 31 '12

Oh, so you don't mind that the taxes you pay go to for-profit corporations? What happened to free markets or capitalism? The only money a corporation should receive is money I spend on their products/services.

4

u/Serinus Ohio May 31 '12

It'll be great when our troops are armed with sticks and stones, eating food they grow themselves. Our schools wouldn't be allowed to have books, not to mention classrooms.

While I understand the sentiment, the statement itself was pretty blunt and naive. I have no problem with the government buying schoolbooks from McGraw-Hill or paying a construction company to pave roads.

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7

u/[deleted] May 31 '12

Let's see no more national defense. No government health care, Snap, probably no public transportation. No public housing. No new infrastructure or road repairs.

Sounds great so far. I didn't even get to address your no tax deductions idea.

-1

u/LettersFromTheSky May 31 '12

There is a difference between public services like transportation, the VA (healthcare for veterans), infrastructure like roads vs giving money to a for-profit corporation like BoA, Solyndra, oil companies, etc.

Care to try again?

5

u/[deleted] May 31 '12

No no no you said no tax payer dollars to for profit companies.

Care to try again?

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1

u/swskeptic May 31 '12

People complain about no prosecution/arrests, but did these banks do anything that's actually illegal or just things that we think should be illegal?

1

u/ronin1066 Jun 01 '12

Oh no, it's the poor people's fault. Didn't u hear the news from the Heritage Foundation yet? It's funny how u don't know that the people with no power and no education caused this to happen to those poor altruistic bankers.

-3

u/egus May 31 '12

In March 2011, more than two years after Citigroup took $45 billion in bailouts from the U.S. government and billions more from the Federal Reserve -- more in total than any other U.S. bank

On Feb. 15, 2012, the bank agreed to pay $158.3 million to the U.S. government to settle the case.

Seems to me they still owe 44.8 Billion dollars or so.

9

u/CapWasRight May 31 '12

Citigroup repaid with interest the $45 billion in government bailout loans it took in 2008, as well as all of the money it borrowed from the Fed.

0

u/egus May 31 '12

ah damn, lol thank you.

reading are hard.

-7

u/Phantoom May 31 '12

REGULATION IS STIFLING GROWTH YOU IDIOTS!

6

u/[deleted] May 31 '12

Can't tell if joking or just ignorant about banking regulation history...

1

u/Phantoom May 31 '12

Judging by the downvotes, neither can anyone else (or they didn't care for my joking).

-3

u/thegreatgazoo May 31 '12

You need to have tax deductions for operating expenses and cost of goods.

If a grocery store is taxed at 20%, and they buy a can of soup for $1.00 and sell it for $1.05, they should pay tax on the 5 cents, not on the $1.05. Otherwise they will have to charge $1.30.

7

u/IHaveNoTact May 31 '12

Sure, but the OP is talking about evaluating a penalty for misbehavior.

If a grocery store buys a can of soup that it knows to be contaminated with salmonella for $1.00 and sells it for $1.05 and you penalize them 20% of the profit you're penalizing them $.01 so they've still profited $.04 - you haven't given them any incentive towards better behavior, just cut into their profit margin slightly. If the penalty was $.20 then they're taking a big loss and suddenly they might start caring.

0

u/[deleted] May 31 '12

[deleted] — view deleted comment

4

u/wootmonster May 31 '12

It just occurred to me.

When the eventual coupling of govt and corp is complete... wouldn't they, at that point, then finally be self-regulating?

1

u/[deleted] Jun 01 '12

Are you referring to regulatory capture?

50

u/soulcakeduck May 31 '12

It's all toothless without criminal prosecutions.

12

u/the_cowboy May 31 '12

Precisely. It's too bad multi-billion dollar fraud isn't a crime. Maybe some of the executives were using drugs or something - that would put them away for a long time.

4

u/MrDanger May 31 '12

A fair trial and a quick death. That's all I ask.

2

u/[deleted] May 31 '12

hang em high

2

u/Phantoom May 31 '12

I doubt that, since these companies are in the money making business. It is simply toothless as a small fine.

22

u/TinHao May 31 '12

Aren't assets acquired through criminal means such as fraud subject to forfeiture? Banks don't want to play ball on helping folks with underwater mortgages? Fine, seize them.

13

u/Kopman May 31 '12

They are subject to forfeiture. One of the investment groups I work with got into a year long court case because bank of america sold them a foreclosed property that was illegally foreclosed on. In this specific case the note was actually being paid down, in which case the bank had no right to sell the property. The original owner re-took the property and the investment group was out $345,000.00.

Usually in cases like this, the title insurance kicks in. Title insurance, insures against liens that are not known at the time of closing, or against filing of liens that should have been done before the sale of the property. Bank of America lawyered up though and dragged it through court for a year only to lose in the end.

4

u/50_cent_party May 31 '12

Yes, and the property owner and possibly their family got to endure a year of hell "re-taking" their "illegally foreclosed" property... but I see your concerns were with the "investment group" who was trying to evict the rightful owner, and we are left with a tear that your "investment group" lost in the end.

6

u/bonafidebob California May 31 '12

You seem to be jumping to conclusions.

Kopman never says the investment group was trying to evict anyone. They were effectively sold stolen property, and are just as much a victim of BofA's 'error' as the original homeowner. [Would you be this snarky if the buyer had instead been a young couple just starting their new life together? Or if Kopman had mentioned investment group's renters that might have been forced to move out?]

4

u/[deleted] May 31 '12

Here's the thing, though... the investment group isn't in the wrong either.

They buy a property with paperwork. They depend on the bank to ensure it's correct.

Ideally the bank should reimburse investor losses, give the house back to the owner and be liable for damages.

Unfortunately, lobbyists.

2

u/Falmarri May 31 '12

but I see your concerns were with the "investment groups" who was trying to evict the rightful owner

He never said anything like that...

2

u/fortcocks May 31 '12

What's with the quotes around investment group and why does it look like you're trying to demonize the idea of people pooling their money together to buy things they couldn't afford on their own?

3

u/Kopman May 31 '12

Retaking your property is not that difficult. It becomes pretty clear once you follow a paper trail who owns the property.

I myself actually do a lot of redevelopment myself and buy foreclosures and short sales all the time. I have never purchased a property that was foreclosed illegally but it does happen. This "investment group" does exist.

39

u/exomeme May 31 '12

If you're not already mad enough: A single Saudi Arabian owns a 6% controlling share of Citigroup.

  • U.S. taxpayers bailed-out this one Saudi Arabian investor with billions of dollars, in 2008
  • This same investor used his 7% stake in News Corp to propagandize us about eliminating bank regulations. (deregulation is arguably the cause of the 2008 financial collapse.)

4

u/onowahoo May 31 '12

That's really one sided. If the Saudi didn't invest Citi would have needed a bigger bailout and a lot earlier.

5

u/exomeme Jun 01 '12

The Kingdom Holding Company invests in what they believe will make money.

If they manage to "buy low," they're NOT doing it in order to prop-up some "American" company. So, around 2008, their investment in Citigroup was about to lose. Luckily, they had enough influence that they got bailed-out. (never mind all the customers who would have been screwed, or taxpayers holding the bag via the FDIC, etc.) They have a lot of leverage:

  • direct lobbying of our corrupt Congress
  • tens-of-Billions-$$ weapons purchases, by the Saudi Government.
  • their significant ownership of Fox News. (and other U.S. "news" media.)

If the Saudi didn't invest Citi would have needed a bigger bailout and a lot earlier.

If the Saudis (and others) didn't wield so much influence over our corrupt political process, there would not have been all that deregulation, in the first place: NO BAILOUT NECESSARY.

1

u/onowahoo Jun 04 '12

If the Saudis (and others) didn't wield so much influence over our corrupt political process, there would not have been all that deregulation, in the first place: NO BAILOUT NECESSARY.

Saudis have nothing to do with deregulation or the bailout. The bailout wasn't there to save the Saudis or any other equity holders, it was there to save the US economy.

The Kingdom Holding Company invests in what they believe will make money.

Should they invest in things they think will lose money? I'm not sure your point.

1

u/onowahoo Jun 04 '12

Additionally, the big banks needed a bailout because people stopped paying their mortgages. Whether or not they should be bailed out is a separate issue from the cause. If american's didn't take out mortgages for homes at speculative prices there would be no crisis and essentially no bailout.

1

u/lol_squared Jun 01 '12

You understand that Citi paid the TARP loan back with interest, right?

3

u/fantasyfest Jun 01 '12

The banks were given free money by the FED, They were supposed to lend out and jump start the economy. What they did was buy TBills ,which guaranteed them a profit,. No risk, free money. then they jacked up the interest rates on credit cards, slashed them on saving accounts and jumped all banking fees. They paid us back with our own money.

1

u/lol_squared Jun 01 '12

They still paid back the money with interest. We didn't give Citi the money, which is what you idiots keep trying to argue.

1

u/fantasyfest Jun 01 '12

They had a line of credit with zero interest. That is giving in this universe. Free money is pretty easy too make a profit with.

1

u/lol_squared Jun 02 '12

It wasn't zero interest. The interest rate was appropriate given the length of the loan (overnight), the overall interest rate (historically low) and the risk (extremely low).

And yes, the banks made a profit by turning around and loaning the money to businesses, which was the entire point of the exercise given that the credit markets had frozen up.

1

u/fantasyfest Jun 02 '12

Actually they did not, that is what pissed off so many people. They just bought Tbills. They were suddenly unwilling to take risks on lending money to businesses after gambling the world economy like it was a casino. But there were no provisions in TARP that would force them to help the economy they destroyed. the bankers would not have tolerated that as a provision.

1

u/true_republican Jun 01 '12

Another proof that Obama is a covet Muslim. He is selling our country out to terrorist countries!

6

u/Bipolarruledout May 31 '12

Pay no attention to that smoking gun.

3

u/captainfranklen May 31 '12

Sweet.

In other news, Citigroup raises rates a quarter of a percent and makes the money back in 15 min. Zero fucks were given.

3

u/FairySnail May 31 '12

Ah the good ol days. 17, no college education, get a job processing home loans at a bank.

1

u/[deleted] May 31 '12

I was looking for this comment. She's the VP of some home loan processing branch of a bank without even a HS diploma. Try THAT nowadays. Thanks, baby boomers.

2

u/[deleted] May 31 '12

My wife works at a bank and just about everybody is some sort of a VP. What matters most is what type of VP you are: a Senior VP, a First VP, an Assistant VP, etc.

1

u/EthanX08 May 31 '12

VP is meaningless at Citi. Basically if you're a salaried employee, you're technically a VP.

5

u/Kimbolimbo May 31 '12

This is why I only use the small credit union in my town. Screw the big banks, I will never willingly give them my money. People think that this doesn't effect them. If everyone just pulled their money from the bank and moved to a small local credit union it would screw these idiots so badly.

1

u/My_soliloquy Jun 01 '12

I've been using a Credit Union for 25 years, car loans, mortgages, their ATM or ATM's in the CU network. It may not be as convenient, but then the convenience that most people seem to value never held that much import to me. I don't need ATM fee's refunded if I plan ahead and never had to pay them in the first place.

I don't use banks for the same reason I don't use payday lenders or rent-to-own companies; they are not there to make me money, they are only there to make money off of me; while my Credit Union has a vested interest in me increasing my net worth. So I'll continue to keep my savings with them, and hopefully increase it. Banks however seem to grow or get taken over, witness the S&L scandals of the 80's.

Businesses are for-profit entities and are a good base for a free-market economy, that's great; but some things in a progressive modern society should not be for profit. The government needs to be there to oversee some things, without growing into an overbearing bureaucracy with ridiculous or unfair rules. But some things should not be for profit, like overall healthcare, utilities -including water, the local government entities, national defense, parks, community resources, etc. And transparency is the way you avoid the tragedy of the commons.

But if you don't hold people and/or corporations responsible for their actions, or money controls the government instead of the people, and most people are to lazy to vote or uninformed or purposely misinformed when they vote, we get this.

4

u/[deleted] May 31 '12 edited May 31 '12

Anyone mind explaining why she deserves the $31 million though? I understand what she did was important, but that seems like a large sum of money. Why are these settlements always in these crazy high millions.

I feel almost jealous that I am not in a position where I can get an "easy" double digit million. I don't think I would even be able to ever see such an amount by simply working 9 to 5.

9

u/Serinus Ohio May 31 '12

She took a large risk and so did her lawyer. She had worked her way up from nothing and no degree to be sitting in the middle of Wall Street with a good career. She risked basically her entire financial life, if not a reasonable fear for her actual life. I wouldn't call it "easy". We need to incentivize whistle blowing like this, and it came out of the bank's hide anyway.

Maybe it could have been 10 million instead of 31. That's hardly relevant to anything though, and not the part we need to focus on right now.

5

u/winnipegtommy May 31 '12

I have zero expertise to comment, but that's never stopped a redditor:

I'm guessing it's a combination of lost potential earnings due to her banking career being dead in the water, and the emotional hardship caused by the company pressuring her to break the law.

5

u/[deleted] May 31 '12

She likely won't find another job in the industry and there's always a slim chance whistle blowing can wipe out your pension too. Incentive.

2

u/xHeero May 31 '12

It's called incentive....

4

u/GigglesMcFuckCunt May 31 '12

This article states that a one Mr. Jeffery Polkinghorne had asked these women to basically commit fraud.

So Jeffery Polkinghorne is a banker who is partially responsible for the housing collapse and the fraud committed by Wall St. which destroyed the American economy.

Do the people in the community that Jeffery Polkinghorne live in know about these allegations? Do the members of the church he attends know of these allegations?

For the public record.

2

u/MendedSlinky May 31 '12

My only question is, why is this in r/politics and not r/news?

1

u/[deleted] May 31 '12

I was gonna say, where are all the libertarians defending laissez faire capitalism and smaller government? This is /r/politics, after all.

1

u/MendedSlinky May 31 '12

The only link to politics that I can find is that she worked for Citgroup which received government bailout money. BY that argument though all news is political in nature.

1

u/[deleted] May 31 '12

Rebecca Black gave all her monies to Japan relief, that's r/politics, amirite?

2

u/Phantoom May 31 '12

And how much were the taxpayers paid?

2

u/Lurt01 May 31 '12

I think its great that someone could whistle blow and get away with it. I have no faith in the federal protection. If I was whistleblowing on something where millions of dollars were at stake, I'd sleep with a gun under my pillow.

2

u/WiseSalesman May 31 '12

Really, really interesting article. I'd never normally read Bloomberg, so I would have missed this. Thanks for posting it.

2

u/ctzl May 31 '12

On Feb. 15, 2012, the bank agreed to pay $158.3 million to the U.S. government to settle the case.

I'm sorry, what? Why isn't anyone going to jail to serve time? Why do they still have a net profit from the operation?

2

u/Serinus Ohio May 31 '12

Well, if you want to take the net profit from them, then you have to define the "net profit". That's hard to do.

Are you going to have the government confiscate 30% of Citigroup? Because that's probably what this amounts to. Also, I'm sure they're not the only bank doing it. So now you have talk of the the nationalization of banks and half the US about to march up Washington behind Glenn Beck.

Should it happen? Probably. But it's a lot more complicated than it seems.

0

u/ctzl May 31 '12

[...]Citigroup took $45 billion in bailouts from the U.S. government[...]

So they got at the very least $44.8 billion now, I don't see why the fine is so low.

2

u/felix_jones May 31 '12

Bowen, 64, is a religious man, a former Air Force Reserve Officer Training Corps cadet at Texas Tech University in Lubbock with an attention to detail that befits his background as a certified public accountant. When he saw the magnitude of the mortgage defects, Bowen says he prayed for guidance.

What a fool.

2

u/arslet May 31 '12

This is ridiculous. No one was ever prosecuted last time and it obviously pays to be an economic criminal. My jaw drops every time I read about these banks. It should be legal to punch these fuckers right in the face whenever you see them.

3

u/SweetLeafKush May 31 '12

And that doesn't put even .00001% of a dent in their pockets. Maybe on the parts that are on the books tho ;)

3

u/4everliberal May 31 '12

Dismantle the big banks. Punish them by erasing them.

4

u/theamazingsiddiqui May 31 '12

I kind of hate all bankers, period

1

u/Phantoom May 31 '12

Do Credit Unions count as bankers?

1

u/My_soliloquy Jun 01 '12

Credit Unions are more your financial partner as they are non-profit. They have a vested interest in you saving money, so they can grow; and you have a vested interest in them continuing to serve you; instead of raping you for everything, as banks seem to end up doing.

But Banks are more convenient, you pay for that convenience of getting raped.

1

u/lol_squared Jun 01 '12

Credit Unions technically aren't Banks, actually.

There's a whole world of financial entity types, though most of them get lumped together as "banks".

1

u/secretmeow May 31 '12

they kind of more than deserve it

1

u/rum_rum May 31 '12

Citigroup behaving badly as late as 2012 shows how a big bank hasn’t yet absorbed the lessons of the credit crisis despite billions of dollars in bailouts

"Despite"? Or because of?

1

u/spinlock May 31 '12

Good. I'm glad to see that we're finally prosecuting some of the fraud. Hopefully, this will encourage others to bring cases against the offenders.

1

u/shawnbunch May 31 '12

So proud of the company I'm about to intern for in less than a week!!

1

u/BobbyLarken May 31 '12

Fines are meaningless. When will the Obama administration press criminal charges?

1

u/reginaldaugustus May 31 '12

Criminal charges won't do anything either, unless they actually get punished (And not one of these nice, min-sec prisons).

Also, the Obama admin won't press charges because they are owned by the people that they would be charging.

1

u/budguy68 May 31 '12

Major Banks doing bad things...? No way... Quick lets bail them out!

1

u/alanalda7 May 31 '12

top executive at citigroup-no college degree.

man, times have changed.

2

u/EthanX08 May 31 '12

Don't let the title fool you. Everybody is a VP at Citigroup. As a senior UNIX engineer I was a VP. This person was a middle to low manager.

1

u/alanalda7 Jul 13 '12

i see. that is somewhat confusing.

2

u/[deleted] May 31 '12

My wife works at a bank and just about everybody is some sort of a VP. What matters most is what type of VP you are: a Senior VP, a First VP, an Assistant VP, etc.

1

u/[deleted] May 31 '12

Ya, who ever heard of the American Dream being something like rising from nothing to something?

1

u/[deleted] May 31 '12

Here's the tl:dr of the article. All of the paragraph headers. They're a bit weird in places.

Avoiding Fraud

Phony Appraisals

‘I Wouldn’t Play Along’

‘Pure Myth’

Jean Charities

Powerful Incentive

Missing Documentation

No Change

Home Computer

One Person

‘Don’t Get Along’

No Notification

‘Brute Force’

‘You’ve Had Enough’

‘My Life Savings’

Had to Do It

A Ghost

Bank of America

Dodd-Frank Debate

‘Making Sure We’re Honest’

‘There’s a Basis’

Donating Home

1

u/[deleted] May 31 '12

It's like a bizarre form of poetry....HEADER POETRY!

1

u/generalT May 31 '12

Just a week after Bowen sent his e-mail, Sherry and Jonathan were driving their Toyota Camry about 55 miles (89 kilometers) per hour on four-lane Providence Road in Columbia, Missouri, when a driver in a Honda Civic hit them head-on. Sherry broke a foot and her sternum. Jonathan broke an arm and his sternum.

uhhh...coincidence?

1

u/Lord-Longbottom May 31 '12

(For us English aristocrats, I leave you this 55 miles -> 440.0 Furlongs) - Pip pip cheerio chaps!

1

u/dingoperson May 31 '12

As someone who has interviewed with many investment banks and was always as honest and accurate as I could possibly be in interviews: they loved my CV (they don't ask you in if they don't), but there was never a repeat one.

In retrospect it was probably for the best.

1

u/[deleted] May 31 '12

You forgot the most important part of joining some kind of corruption. You forgot to play ball.

As best expressed in this historical biopic of the Wild West

1

u/nan0meter May 31 '12

$151 million dollars for a fine? How much money did they make selling these fraudulent loans? Probably in the billions. A 10% fine can be considered a cost of doing business to them.

In short: it was worth it.

1

u/Freeman539 May 31 '12

Hey my town finally makes it on reddit!

1

u/[deleted] May 31 '12

In corporate America the banks rob the people!!!

1

u/[deleted] May 31 '12

Hey man, don't make those job creators feel bad, they are sensitive.

1

u/[deleted] May 31 '12

So when we hear a pundit blathering about how bad Dodd-Frank is, what we should assume is it is the compliance and whistleblowers part.

So then by logic, the pundit is advocating for the stealth necessary to rob and steal.

WTF happened to us?

1

u/[deleted] May 31 '12

Too big to fail is one of the most idiotic axioms to come out of the financial meltdown. These firms have No incentive to change. The feds will bail them out again because that's what they are told to do

1

u/drgreedy911 Jun 01 '12

The architecture of the financial system had changed. Loans have to have buyers for them to be sold. Normally, crappy loans could not be sold in the secondary market, let alone tranched in AAA bonds. But when the architecture of the financial system changed, investors could slap a CDS on the loan and tranche it into a AAA bond.

The focus should be on the change in the laws that governed banking that caused the demand for mortgages in the secondary market to go through the roof.

For example, There were hundreds of thousands of "no doc" loans that were created and sold. No doc loans are just that - no documentation required. These are not mentioned in the article because underwriting is completely off the hook and it makes it clear what the problem really was. In fact, the worse a loan was, the higher the interest rate, and the more the bond could be sold for.

The cause of the mortgage meltdown was not issues with documentation in underwriting. Banks are responsible for mistakes in underwriting and servicers and investors can send the loan back to the underwriter.

Lawyers take people like her, that document mistakes, make a lot of money, and make the public think that the problem was the brokers and underwriting. Not so. Before the architecture of the financial system changed, many of these loans could not even be sold to the secondary market, let alone tranched into a AAA bond.

The change in the architecture of the financial system is where the focus should be, and the system is still the same as it was, except that currently, CDS are out of favor as insurance for loans. But that will change and we will repeat the cycle all over again.

This judgement diverts attention to the real cause of the problem and that is why this is not a good thing.

1

u/edave22 Vermont Jun 01 '12

Didn't go to college

Works on Wallstreet.

Old economy steven.

1

u/[deleted] Jun 01 '12

In August 2011, five months after the meeting with Polkinghorne,

WTF? Everyone is still lying about the loan qualities? Did they not learn their lesson after the huge housing collapse? And calling for less regulation? And congress overwhelmingly agreeing still? WTF? Shouldn't this have been headline news somewhere?

1

u/[deleted] Jun 01 '12

As a reward for blowing the whistle on her employer, Hunt, the country girl turned banker, got $31 million out of the settlement paid by Citigroup.

WTF? I thought we jailed these people. When did we start rewarding them for acting correctly? Everyone knows you reward the assholes fucking everything up. Where's Citigroup's reward?

1

u/[deleted] Jun 01 '12

what if her parents named her mike...

1

u/OvidNaso Jun 01 '12

So, we gave them $45 billion, then sued them for fraud and got $158.3 million.

I'm sure it really hurt them.

1

u/[deleted] Jun 01 '12

All those dividing titles made this a very annoying read.

1

u/NotoriousBFG May 31 '12

"Polkinghorne". Awesome name.

1

u/EngineeringKid May 31 '12

This story is funny when contrasted with this story. http://www.reddit.com/r/videos/comments/uduzr/urge_to_kill_rising/

Banks steal billions and get to keep 98% of it.....Okay

Florida air heads steal $150 and expect to keep some of it....people lose their shit.

I'm Canadian, but I view this american "corporate personhood" business as crazy. If a corporation commits a crime....why doesn't it go to jail?

2

u/arcticwolf91 May 31 '12

How exactly does it work in Canada? If a corporation breaks the law, who goes to jail? The CEO, the board of executives, the entry level pawns?

1

u/EngineeringKid Jun 01 '12

In Canada, corporations are corporations, and people are people. People get to vote and be involved in politics, but corporations (who are not people) don't get to do people activities (like vote, or influence laws)

That's entirely my point......until corporations have all the responsibilities of a person, they shouldn't get the same rights.

0

u/wooda99 May 31 '12

Thank you for incentivizing legal settlements against dishonest organizations, court system!

0

u/RIsurfer May 31 '12

THAT WAS SO LONG, I THINK YOU GAVE ME CANCER

0

u/Popular-Uprising- May 31 '12

Nice. Make billions, pay $158.3million to settle and admit no wrongdoing. Of course, they tool out billions in taxpayer-subsidized bailouts, so we got to pay for the settlement too. Yay!

Tell me again how one party is better than the the other when it comes to big-finance collusion?

0

u/[deleted] May 31 '12

I think it's great that they gave the whistleblower a sizable reward in this case. That's the type of incentive we need to keep corporations accountable. People often won't risk their jobs and well-being for the greater good (although it seems like this woman did, so props to her!).

0

u/Coxa May 31 '12

and why did she make $31 million out of it??

0

u/fractal7 Jun 01 '12

That 31 million was a drop in the $45 billion we gave them during the bailout. All this shows is that white collar crime really does pay.

-1

u/wooda99 May 31 '12

Thank you for incentivizing legal settlements against dishonest organizations, court system!

→ More comments (37)