Crime and lack of punishment

Dear Mr. Berko:
I lost $9,000 when Orion Bank in Florida was taken over by the Federal Deposit Insurance Corp. in 2009, and CEO Jerry Williams, whom I’ve known since 1998, went to prison three years later because he falsified the bank’s books to hide losses. He’s broke today. I lost $41,000 when Bear Stearns did the same thing and was taken over by JPMorgan Chase in 2008. But Bear Stearns’ CEO, Ace Greenberg, still is dancing around Wall Street with millions in his pocket, gets $100 haircuts and buys $20 martinis for his friends at the King Cole Bar. Tell me why one man who caused $500 million in losses was sentenced to prison and another, who is responsible for $50 billion in losses and is vice chairman of J.P. Morgan Asset Management, is free as a bird.
CT, Port Charlotte, Fla.

Dear CT:
JPMorgan Chase’s (JPM-$44) collective few hundred million in fines is a tap on the pinkie for this “too big to fail” charter member of the New York financial mafia. Not a single executive will be fined or charged for the criminal actions and the billions lost by Bear Stearns. Big thanks to niddering Mary “Little Lamb” Schapiro, who never met a big-time financial crook she didn’t like. But Little Lamb was right because a huge portion of Bear’s billions in losses segued from JPM’s “forced acquisition” of Bear Stearns in March 2008.
Niddering Mary and her flock of timorous lambs at the Securities and Exchange Commission are punishing the wrong folks. Back in those days when Dick Cheney was running the country, he believed that Bear couldn’t survive another day and that its failure would trigger waves of panic selling in the world’s financial markets. So Dick “Big Dick” Cheney ordered Federal Reserve Chairman Ben Bernanke and then-Treasury Secretary Hank Paulson to force JPM to take over Bear Stearns. That was Friday, March 14. The deal, as well as the framework for the deal, needed to be announced before the opening of the Asian markets on Monday, May 17. JPM couldn’t possibly have completed its due diligence in that short time frame and tried to beg off. But the regulators agreed to indemnify JPM against losses from Bear’s toxic mortgage bonds, and Big Dick promised unnamed favors to be paid in the future. But no good deed goes unpunished. Niddering Mary and her lambs decided to punish JPM for the sins of Bear Stearns, which it was forced to acquire. Bear was inarguably involved in a massive fraud involving the sale of mortgage-backed securities, and many people think Greenberg was actively complicit. A specific dollar amount may never be forthcoming, but the numbers are between $45 billion and $55 billion.
So Niddering Mary and her lambs reckoned a multimillion-dollar fine, paid by JPM, would be a good lesson. But JPM is involved is so many other fraud charges — lying to Moody’s Investors Service and Standard & Poor’s, enormous trading losses, colluding with hedge funds, commingling funds, municipal bond scandals, etc. — and that fine makes as much sense as using a hand-held bellows to blow back a hurricane.
However, you should know that Niddering Mary and her lambs won’t bring civil or criminal charges against the Bear Stearns bad boys, in whose absence this fraud never would have happened. And you should know that the SEC, Mary and her lambs won’t bring similar charges against the racketeers at Goldman Sachs, MF Global, Countrywide Financial Corp., Bank of America and Wells Fargo, whose evil activities cost Americans hundreds of billions of dollars. Those firms paid niggardly fines, which were covered by errors-and-omissions policies. Not a centime came from management’s purse, and not a single New York financial mafia executive spent a day at a federal facility. The reason these good old boys got off scot-free is their myriad friends in Congress receive (under the hat) regular and significant campaign contributions. Sorry, Charlie, but that’s the way Wall Street does business. Your Mr. Williams is a piker compared with those good old boys. That’s how the Mercedes benz!
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Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775 or e-mail him at mjberko@yahoo.com. Visit Creators Syndicate website at www.creators.com.
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