Aspen, Telluride, Judas Duck
In the days of market gunning for ducks and geese, the market hunters had a large box with corn containing Judas Ducks. They were live birds that the shooters would let go to fly up into a flock of passing birds, and swing them down into the blind to be slaughtered, not unlike many in our society who lead people to slaughter with their incompetence and mistaken direction in finance, politics and life. Ski while making money.

Thursday, December 1, 2011CITIGROUP-FEDERAL JUDGE JED RAKOFF-SEC ENABLING-REAL PUNISHMENT?-RISK OF ANOTHER FINANCIAL MELTDOWN-FRAUD AGAINST INVESTORS
The Securities and Exchange Commission and Congress’ incompetence has put the nation again at risk of another financial meltdown. No-admit/no-deny settlements are no real deterrent to future bad behavior. The banks love this policy since by not admitting fraud, they cannot be sued by thousands of investors, who have lost millions of dollars. The same old story, when Wachovia and Wells Fargo paid a slap-on the wrist fine for holding cartel money, repeatedly, and the question remains, where is the cash from drug money being laundered today? The best guess from the US Treasury Department, is that it is going to European banks, who desperately need the money.
The new case that may be litigated in July of 2012, developed when Citigroup allegedly defrauded investors when it had not adequately disclosed to investors its role and interest in creating and selling-and betting against-a mortgage-backed investment that was intended to fail. When the investment tanked, the bank made $160 million, according to the SEC, while investors lost $700 million.
Judge Rakoff said that his understanding of the matter indicated that a tougher charge of knowing or intentional fraud was indicated.
SEC chairman Mary Schapiro is pressing for larger penalties, and is asking Congress to pass laws that would allow the SEC to impose fines up to nine times greater than the maximum currently allowed by U.S. law.
If the proposed new law would have been applied in the Citigroup case, the maximum penalty would jump to $1.44 billion from $160 million.
Many Republicans and some Democrats are resisting the new proposed law, giving the SEC more powers. The main question is whether the larger fines would deter illegal behavior. The admission of wrongdoing would be an investment banks worst nightmare, opening them up to monstrous litigation and law suits from individuals and parties who had lost a large amount of money. The lobbyists are already driving up to Congress getting ready for this dramatic change in the law.
A new law that makes fraud on the American people by banks, a major crime, with monstrous penalties, may save the nation from another bank meltdown, and the disastrous Category V Hurricane, that has made the lives of a great number of people on the verge of a collapse, and permanent poverty. Teddy Roosevelt warned the nation in a 1903 speech, that prosperity in America could only be sustained by the conduct of the larger banks with the following requirements: a legitimate business practice, fair and honest dealings with the public, no wild speculation, and a disciplined adherence to established conservative rules. Maybe Federal District Judge Jed S. Rakoff, who has the courage to tackle this deal between the SEC and Citigroup bank, maybe he read the history books that detailed the Roosevelt presidency.
The policy of small fines for banks, no individual liability of bankers, and extraordinary fraud from 2000 to 2011, would be eliminated by Judge Rakoff’s successful ruling and victory in July of 2012. If he loses, and Congress doesn’t have the courage to act on stiffer laws, the recession may never end.