no longer has to comply with virtually all requests for information releases from the public, including those filed under the Freedom of Information Act.
So much for transparency.
Under a little-noticed provision of the recently passed financial-reform legislation, the Securities and Exchange Commission no longer has to comply with virtually all requests for information releases from the public, including those filed under the Freedom of Information Act.
The law, signed last week by President Obama, exempts the SEC from disclosing records or information derived from "surveillance, risk assessments, or other regulatory and oversight activities." Given that the SEC is a regulatory body, the provision covers almost every action by the agency, lawyers say. Congress and federal agencies can request information, but the public cannot.
That argument comes despite the President saying that one of the cornerstones of the sweeping new legislation was more transparent financial markets. Indeed, in touting the new law, Obama specifically said it would “increase transparency in financial dealings."
The SEC cited the new law Tuesday in a FOIA action brought by FOX Business Network. Steven Mintz, founding partner of law firm Mintz & Gold LLC in New York, lamented what he described as “the backroom deal that was cut between Congress and the SEC to keep the SEC’s failures secret. The only losers here are the American public.”
If the SEC’s interpretation stands, Mintz, who represents FOX Business Network, predicted “the next time there is a Bernie Madoff failure the American public will not be able to obtain the SEC documents that describe the failure,” referring to the shamed broker whose Ponzi scheme cost investors billions.
The SEC didn’t immediately respond to a request for comment.
Criticism of the provision has been swift. “It allows the SEC to block the public’s access to virtually all SEC records,” said Gary Aguirre, a former SEC staff attorney-turned-whistleblower who had accused the agency of thwarting an investigation into hedge fund Pequot Asset Management in 2005. “It permits the SEC to promulgate its own rules and regulations regarding the disclosure of records without getting the approval of the Office of Management and Budget, which typically applies to all federal agencies.”
Aguirre used FOIA requests in his own lawsuit against the SEC, which the SEC settled this year by paying him $755,000. Aguirre, who was fired in September 2005, argued that supervisors at the SEC stymied an investigation of Pequot – a charge that prompted an investigation by the Senate Judiciary and Finance committees.
The SEC closed the case in 2006, but would re-open it three years later. This year, Pequot and its founder, Arthur Samberg, were forced to pay $28 million to settle insider-trading charges related to shares of Microsoft (NASDAQ:MSFT). The settlement with Aguirre came shortly later.
“From November 2008 through January 2009, I relied heavily on records obtained from the SEC through FOIA in communications to the FBI, Senate investigators, and the SEC in arguing the SEC had botched its initial investigation of Pequot’s trading in Microsoft securities and thus the SEC should reopen it, which it did,” Aguirre said. “The new legislation closes access to such records, even when the investigation is closed.
“It is hard to imagine how the bill could be more counterproductive,” Aguirre added.
FOX Business Network sued the SEC in March 2009 over its failure to produce documents related to its failed investigations into alleged investment frauds being perpetrated by Madoff and R. Allen Stanford. Following the Madoff and Stanford arrests it, was revealed that the SEC conducted investigations into both men prior to their arrests but failed to uncover their alleged frauds.
FOX Business made its initial request to the SEC in February 2009 seeking any information related to the agency’s response to complaints, tips and inquiries or any potential violations of the securities law or wrongdoing by Stanford.
FOX Business has also filed lawsuits against the Treasury Department and Federal Reserve over their failure to respond to FOIA requests regarding use of the bailout funds and the Fed’s extended loan facilities. In February, the Federal Court in New York sided with FOX Business and ordered the Treasury to comply with its requests.
Last year, the network won a legal victory to force the release of documents related to New York University’s lawsuit against Madoff feeder Ezra Merkin.
FOX Business’ FOIA requests have so far led the SEC to release several important and damaging documents:
•FOX Business used the FOIA to obtain a 2005 survey that the SEC in Fort Worth was sending to Stanford investors. The survey showed that the SEC had suspicions about Stanford several years prior to the collapse of his $7 billion empire.
•FOX Business used the FOIA to obtain copies of emails between Federal Reserve lawyers, AIG and staff at the Federal Reserve Bank of New York in which it was revealed the Fed staffers knew that bailing out AIG would result in bonuses being paid.
Recently, TARP Congressional Oversight Panel chair Elizabeth Warren told FOX Business that the network’s Freedom of Information Act efforts played a “very important part” of the panel’s investigation into AIG.
Warren told the network the government “crossed a line” with the AIG bailout.
“FOX News and the congressional oversight panel has pushed, pushed, pushed, for transparency, give us the documents, let us look at everything. Your Freedom of Information Act suit, which ultimately produced 250,000 pages of documentation, was a very important part of our report. We were able to rely on the documents that you pried out for a significant part of our being able to put this report together,” Warren said.
The SEC first made its intention to block further FOIA requests known on Tuesday. FOX Business was preparing for another round of “skirmishes” with the SEC, according to Mintz, when the agency called and said it intended to use Section 929I of the 2000-page legislation to refuse FBN’s ongoing requests for information.
Mintz said the network will challenge the SEC’s interpretation of the law.
“I believe this is subject to challenge,” he said. “The contours will have to be figured out by a court.”
WAKE UP AMERICA & ALL around globe. American nightmare Fed fraud
* Bankrupted most of major nations around the globe while Fed Reserve swindling multi-trillions.
* 0.1% owns 99% American wealth * 83 percent of all U.S. stocks are in the hands of 1 percent of the people.
* 61 percent of Americans "always or usually" live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.
* 66 percent of the income growth between 2001 and 2007 went to the top 1% of all Americans.
* 36 percent of Americans say that they don't contribute anything to retirement savings.
* A staggering 43 percent of Americans have less than $10,000 saved up for retirement.
* 24 percent of American workers say that they have postponed their planned retirement age in the past year.
* Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.
* Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.
* For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.
* In 1950, the ratio of the average executive's paycheck to the average worker's paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.
* The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.
* In America today, the average time needed to find a job has risen to a record 35.2 weeks.
* for the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.
* Approximately 21 percent of all children in the United States are living below the poverty line in 2010 - the highest rate in 20 years.
(AP) The U.S. Defense Department is unable to properly account for over 95 percent of $9.1 billion in Iraqi oil money tapped by the U.S. for rebuilding the war ravaged nation, according to an audit released Tuesday. http://www.cbsnews.com/stories/2010/07/27/world/main6717303.shtml?tag
"What the law did was force the banks to rethink their business lines, their pricing strategies," said banking analyst Dick Bove. "When they rethink it all, they will be able to offset all of the costs of this bill."
U.S. consumer confidence sank in July to its lowest since February on job market worries, underscoring the slow path to economic recovery, a report released Tuesday showed.
Most of Americans and all around the globe are fooled into the Fed Reserve & politicians drama. After I researched and analyzed financial data, historical events, histories around the globe, I came to the conclusion that the Fed Reserve is 666 and has fraudulently misled Americans, and now bankrupting USA after Europe. Don't be fooled into the fraudulent drama or think that you will not be one of victims because sooner or later you will be. Take actions now. God called me to enlighten you because He loves you as I love Him.
Most of Americans and all around the globe are fooled into the Fed Reserve & politicians drama. After I researched and analyzed financial data, historical events, histories around the globe, I came to the conclusion that the Fed Reserve is 666 and have fraudulently misled Americans, and now bankrupting USA after Europe. Don't be fooled into the fraudulent drama or think that you will not be one of victims because sooner or later you will be. Take actions now. God called me to enlighten you because He loves You as I love Him.
AMERICAN NIGHTMARE Clinton scam, now Obama scam under the Fed Reserve deceiving Americans and America.
Financial Overhaul Approved, But Few Know What's In It
The broadest overhaul of U.S. financial rules since the Great Depression won final approval in the Senate on Thursday. Yet over 70% of Americans know nothing about the legislation. * Millions of Americans Will Lose Access to Banks:
CLINTON-GREENSPAN FINANCIAL REFORM REPEALING GLASS-STEAGAL ROBBED MILLIONS OF AMERICANS & AMERICA.
~
SEC=GOLDMAN=FED RESERVE ~~ re Settlement Is Win for Goldman Despite Record Fine
FRAUD, FRAUD, DECEPTION ~ DECEIVING AMERICANS. AMERICA POLITICIANS + FED RESERVE = BIG FRAUD AND SCAMS.
Posted By: John Carney | Senior Editor, CNBC.com | 15 Jul 2010 | 06:21 PM ET
Goldman Sachs scored a major victory in its legal battle with the Securities and Exchange Commission today, despite agreeing to pay a record-setting fine of $550 million.
The SEC is painting the case as a victory for the government, touting the fine and the fact that Goldman admitted to omitting important information from the marketing materials for the Abacus subprime mortgage derivative products it sold in 2007.
But that settlement is far smaller than the $1 billion many expected.
More importantly, Goldman avoided the fraud allegations it feared the most. The one misdeed it to which it confessed—omitting the role of hedge fund manager John Paulson in selecting the securities that went into the synthetic collateralized debt obligation at the heart of the case—is the least damaging in terms of Goldman’s reputation and future legal liability.
In its original complaint, the SEC had accused Goldman of violating Section 10(b) of the Exchange Act and Section 17(a) of the Securities Act. Both are anti-fraud provisions. Like most anti-fraud statutes, Section 10(b) requires the government to prove a fraudulent intent. The first subsection of Section 17(a) also requires proof of fraudulent intent.
But the second and third subsections of 17(a) do not require any proof of intent to defraud.
This makes accusations based on the second and third subsections much easier to prove—and perhaps easier for Goldman to stomach.
In fact, subsection 17(a)(2) does not even employ any form of the word “fraud” or “deceit.” It makes the sale of a security or a derivative unlawful if a material omission renders the sale merely “misleading.” That seems to be what Goldman has admitted to doing in the settlement.
All references to violations of Section 10(b) of the Exchange Act were dropped.
Sources have told CNBC that this allegation of misleading by omission was far more palatable to the Goldman because it does not explicitly implicate Goldman in fraud.
Importantly, most federal courts hold that violations of Section 17(a) of the Securities Act do not give rise to private actions by outside investors.
This means that paying a fine and making this omission will not necessarily give ammunition to plaintiff’s lawyers who are suing Goldman in separate lawsuits.
Although you will never hear them admit it, somewhere Goldman’s lawyers and executives are probably popping the cork on a bottle of bubbly.
Goldman Sachs scored a major victory in its legal battle with the Securities and Exchange Commission today, despite agreeing to pay a record-setting fine of $550 million.
FED RESERVE + CLINTON MISERY ~ OBAMA MISERY ~~ financial reform drama CLINTON-GREENSPAN FINANCIAL REFORM REPEALING GLASS-STEAGAL ROBBED MILLIONS OF AMERICANS & AMERICA.
What's in Financial Reform Bill? Most Americans Don't Know | 15 Jul 2010 | 05:01 PM ET
The broadest overhaul of U.S. financial rules since the Great Depression won final approval in the Senate on Thursday. Yet over 70 percent of Americans know nothing about the legislation.
By a vote of 60 to 39, the Senate gave final approval to a sweeping measure that tightens regulations across the financial industry.
In comments to CNBC Thursday, Democratic Senator Chris Dodd, a co-sponsor of the bill, noted that the sweeping measures passed by Congress won't necessarily prevent a future financial crisis, but instead will "minimize the possibility" of another "near-meltdown."
"The suggestion that any bill can stop future crises is ridiculous," Dodd said. "The issue is whether we've got now the oversight council to keep an eye on what's occurring."
Also Thursday, President Barack Obama hailed congressional passage the regulation, saying it will provide greater financial security to Americans and would foster accountability.
“All told, this reform puts in place the strongest consumer financial protections in history and it creates a new consumer watchdog to enforce those protections,” Obama said in a press conference.
“Because of this reform, the American people will never again be asked to foot the bill for Wall Street’s mistakes and there will be no more tax payer funded bailouts,” he continued. "If a large financial institution should ever fail, this reform gives us the ability to wind it down without endangering the broader economy."
Obama will likely sign the bill into law next week, the White House said.
The legislation, which had been opposed by banks, leaves few corners of the financial industry untouched. It establishes new consumer protections, gives regulators greater power to dismantle troubled firms, and limits a range of risky trading activities by banks in a way that would curb their profits.
The Senate vote caps more than a year of legislative effort after Obama proposed reforms in June 2009. The House of approved it last month.
Despite the landmark overhaul, 38 percent of Americans have never heard of the legislation and 33 percent have heard of it but know almost nothing about it, according to an Ipsos Public Affairs online poll. Another 18 percent said they know "a little bit" about the measure.
The Ipsos poll found 3 percent are very familiar with the legislation, and 8 percent are somewhat familiar.
Now that the bill is set to become law, here's a rundown of the key elements:
TITLE I. Systemic Risk
A council of regulators chaired by the secretary of the Treasury would be created to monitor big-picture risks in the financial system. The Financial Stability Oversight Council could identify firms that threaten stability and subject them to tighter oversight by the Federal Reserve. The Fed and the council could break up firms that have not responded to earlier measures and pose an urgent threat.
TITLE II. Ending Bailouts
The bill would set up an "orderly liquidation" process that the government could use in emergencies, instead of bankruptcy or bailouts, to dismantle firms on the verge of collapse.
The goal is to end the idea that some firms are "too big to fail" and avoid a repeat of 2008, when the Bush administration bailed out AIG and other firms but not Lehman Brothers. Lehman's subsequent bankruptcy froze capital markets.
Under the new rule, firms would have to have "funeral plans" that describe how they could be shut down quickly.
The Federal Deposit Insurance costs for running liquidations would be covered in the short term by a Treasury credit line, then recouped by sales of the liquidated firms' assets. In case of shortfalls, costs could be further covered by claw-backs of any payments to creditors that exceeded liquidation value, and fees charged to other large firms.
The FDIC could guarantee the debts of solvent insured banks to prevent bank runs. But this could only happen if the boards of the FDIC and the Fed decided financial stability was threatened, Treasury approved the terms, and the president activated a rapid process for congressional approval.
TITLE III. Supervising Banks
The U.S. Office of Thrift Supervision, which was widely criticized in the run-up to the 2007-2009 credit crisis, would be closed and most of its duties shifted to the Comptroller of the Currency.
Banks would be barred from converting their charters to escape regulatory enforcement actions.
The FDIC's deposit insurance coverage would be permanently raised to $250,000 per individual from $100,000.
TITLE IV. Hedge Funds
Private equity and hedge funds with assets of $150 million or more would have to register with the Securities and Exchange Commission, exposing them to more scrutiny. Venture capital funds would be exempted from full registration.
Investment advisers would have to manage assets of $100 million or more to be federally regulated, an increase from the present $30 million level. The change would shift some of the oversight for small firms from the SEC to the states.
TITLE V. Insurance
A new federal office would be created to monitor, but not regulate, the insurance industry, which is now policed only at the state level. The move would appease opponents of centralized regulation by keeping real power out of Washington's hands, while giving big insurers that want a single regulator a foothold they might be able to expand from in the future.
TITLE VI. Volcker Rule And Bank Standards
Under a rule proposed by White House economic adviser Paul Volcker, the bill would bar proprietary trading unrelated to customers' needs at banks that enjoy government backing, with some of the details of implementation left up to regulators.
Banks could continue to invest up to 3 percent of their Tier 1 capital in private equity and hedge funds, not to exceed 3 percent of any single fund's total ownership interest.
Private equity and hedge fund interests above the new caps would have to be divested over time, under the Volcker rule.
In addition, the largest banks' ability to expand would be limited by a new cap on share of industry-wide liabilities.
Non-bank financial firms supervised by the Fed would face limits on proprietary trading and fund investing as well.
Bank holding companies within five years would have to stop counting trust-preferred securities and other hybrids as Tier 1 capital, a key measure of a bank's balance sheet strength.
Firms with assets under $15 billion could count current holdings of hybrids as Tier 1 capital, but not any new ones.
The bill would also require credit exposure from derivative transactions to be added to banks' lending limits.
In addition, bank capital standards could not sink below those already on the books, and a 15-to-1 leverage standard could be imposed on firms that threaten financial stability.
The bill would also make bank holding companies follow higher capital standards observed by bank subsidiaries.
Analysts expect the Volcker rule and related changes to cut profit at firms such as Bank of America, Goldman Sachs, Morgan Stanley and JPMorgan Chase.
TITLE VII. Over-The-Counter Derivatives
The bill would impose regulation for the first time on the $615 trillion over-the-counter derivatives market, including credit default swaps like those that dragged down AIG.
Much OTC derivatives traffic would be rerouted through more accountable and transparent channels such as exchanges, electronic trading platforms and central clearinghouses.
Banks would also have to spin off the riskiest of their swap-clearing desk operations, but could keep many swaps in-house, including derivatives to hedge their own risks.
Some end-users of OTC derivatives would be exempted from central clearing requirements. Swap-dealers' ownership interests in clearinghouses would be limited.
JPMorgan, Bank of America and other commercial banks could face structural changes from the bill, while it could boost business for clearing and trading venues such as CME and IntercontinentalExchange, analysts said.
TITLE VIII. Payment, Clearing And Settlement
Supervision of firms that settle payments among financial institutions would be broadened.
TITLE IX. Protecting Investors
On brokers and how they interact with investors, the SEC, after a study, could order brokers who give investing advice to follow a higher standard of client care.
On credit rating agencies, a new SEC office to regulate the agencies would be created. The SEC would have two years to study the widely criticized industry. Afterward, unless it comes up with a better idea, the agency would have to implement a plan to form a government panel to assign agencies to debt issuers for initial ratings of new structured securities.
Rating agencies would also be exposed to more legal risk.
On debt securitization, lenders that make loans and then sell them off as securities would have to retain at least 5 percent of the loans' risk on their books, unless the loans meet certain standards for reducing risk.
The SEC's enforcement powers would be beefed up and its funding levels raised.
On executive pay, shareholders periodically could cast non-binding votes on top managers' compensation packages, while their role in electing directors would also be enhanced.
Corporations would have to allow claw-backs of executive pay if it was based on inaccurate financial information.
TITLE X. Protecting Consumers
A new government watchdog would be established to regulate mortgages, credit cards and other consumer financial products.
The Consumer Financial Protection Bureau would be a separate unit within the Fed and funded by the central bank. It would consolidate consumer programs now dispersed across several agencies. Its director would be nominated by the president and confirmed by the Senate.
The CFPB would answer, in some instances, to the Financial Stability Oversight Council. Car dealers, who fought for and won an exemption, would be beyond the watchdog's reach. Fees charged on debit-card transactions would be limited.
TITLE XI. Federal Reserve
The Fed's emergency lending would be exposed to congressional scrutiny, but not its decisions on interest rates. New limits would be placed on the Fed's so-called 13(3) emergency lending authority
TITLE XII. Financial Access
Programs would be supported to help people without bank accounts to open them and to improve access to small loans and enhance financial literacy.
TITLE XIII. Funding
The costs of the reform bill would be met by funds raised from shutting down the $700 billion Troubled Asset Relief Program, and increasing the amounts of money that banks must pay to insure their deposits.
An earlier funding plan that targeted a new tax at large Wall Street banks and financial firms was dropped after some Senate Republicans complained about it.
TITLE XIV. Mortgage Reform
Mortgage lenders would have to assess borrowers' ability to repay before making a loan. Pre-payment penalties against borrowers and bonuses to lenders known as "yield spread premiums" would be barred, with violators facing penalties.
Other new protections would be set up for borrowers aimed at ending predatory and abusive mortgage lending practices.
Our economy is driven by debt bubble waiting for Americans to spend. The old economic cyclical pattern is not working as usual because Americans are now aware of the WS schemes. In that regard, the long term K-cycle is indeed working out fine economically, however, financial markets are pumped up unreasonably using media propaganda while literally robbing Treasury. What is solution for Americans? Deal with the mess as soon as possible. Higher tax and lower financial markets until everyone cries out, then, all will deal with reality. With hedge fund tax and other tax, it would help as well as other spending cuts - especially the war cost -- and deal with wars using cost-less strategies.
WTH ~ Sell ~ Stock Values Are 'Better Now,' Big Rally On the Way: Cohen
Cohen = misery
666 has spoken ~ the nightmaress from living hell
The wobbly stock market in 2010 has resulted in attractive valuations that should see a rally of more than 16 percent between now and the end of the year, Goldman Sachs analyst Abby Joseph Cohen told CNBC. http://www.cnbc.com/id/37982373
The Supreme Court struck down Monday part of the 2002 law that created a national board to police auditors of public companies, ruling that it violated the constitutional requirement on the separation of powers among the branches of government.
Sen. Robert Byrd's death Monday morning could affect the passage of the financial reform bill, said Sheila Bair, the chairman of the Federal Deposit Insurance Corporation.
President Barack Obama said following through on a pledge to rein in soaring budget deficits would involve presenting Americans with "some very difficult choices" next year.
