Posts Tagged ‘banks’

As the space race slows, the race to break up America’s biggest banks gains speed

Thursday, May 16th, 2013
<em id="__mceDel">CSA Astronaut Chris Hadfield strums his<br />guitar in the International Space Station's Cupola.<br />Credit: NASA</em>

CSA Astronaut Chris Hadfield strums his guitar in the International Space Station’s Cupola. Credit: NASA

Have you seen the YouTube video of Canadian astronaut Chris Hadfield singing David Bowie’s “Ground Control to Major Tom” from the International Space Station? The social media loving space man has become a YouTube sensation with more than 10.5 million (yep that’s million) hits and growing. And that’s only within the span of about a week.

While the space race slows down, the rest of the planet (which you can see clearly from Hadfield’s video) pretty much has lost interest in space travel, The Canadian astronaut has single-handedly created what might be considered a Renaissance for space exploration.

It’s this kind of adventurous spirit, ingenuity and creativity that have made the world a better place to live. And it’s that kind of creativity and out-of-the-box thinking that we need to bring to America’s financial sector and in particular the banking industry.

Oppenheim Law was recently interviewed by banking, legislation, regulatory policy, and litigation publisher Bloomberg BNA on many legal topics – from the “dubious constitutionality” of so-called rocket dockets, to why the planet’s biggest banks must be broken up to remain competitive.

Ironically, the sub headline that BNA gave to the section relating to the breaking up of the banking industry was “Science Fiction” and appropriately so.

I talk about how if we turned the country’s five or six largest banks into 20 or even 30 smaller ones – we would unleash a type of capitalism and creation of new products and concepts that we can’t even begin to envision.

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ATM thieves turn tables on banking industry with $45M cybercrime

Tuesday, May 14th, 2013
Computer hand

Computer hackers, like banks, manage to get away with financial malfeasance.

It used to be that the underworld was where you would expect to find ATM thieves. But the world has changed, and with it the way that bank crimes are being committed.

Take for example news reports about a “global posse” of cyber thieves who made off with some $45 million from bank ATMs in 26 countries in what authorities are calling a first-of-its kind cybercrime heist.

Armed not with guns, but with laptops, this group of hackers managed not only to get into the computer networks of financial companies in the U.S. and India, but also to do away with the ATM cash withdrawal limits on prepaid debit cards.

The good news here is that no individuals lost money. Instead, the crooks plundered money held by banks.

Just seven people have been indicted. An eighth, considered to be the ringleader, was found dead in the Dominican Republic.

It was a sophisticated crime that essentially turned the tables on the banking industry – which over the years has found ways to manipulate the financial markets and create one of the largest economic crises in U.S. history.

The difference between what happened with the ATM heist and what some of the country’s biggest banks have, and continue to do, is that those thieves got caught and will be punished – and the ringleader is dead. But America’s banks continue to manipulate the market and get away with this financial malfeasance because, as we all know, they are considered too big to fail
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Bangladesh and Banks: Why Both May No Longer Be Too Big to Fail

Sunday, May 12th, 2013
It’s not much different for the banking industry. While no lives have been lost as a direct result of the banks’ committing fraud, many people’s lives have been financially ruined.

Much like the banking industry in the US, the Recent tragedy in Bangladesh is “Too Big To Fail”

What do the recent tragedy in Bangladesh and the state of this country’s banking industry have in common? At first blush you might say nothing, but scratch just below the surface and you will see there are many parallels.

First Bangladesh – which we all know by now is a corrupt country being run by an ineffective government where rich factory owners sit in Parliament thumbing their collective noses at building codes that no one enforces.

Then, there are the “too big to fail” banks whose CEOs know that, by virtue of their size, the government won’t let them fail for fear they will, just like the garment factory in Bangladesh, come crashing down taking the innocent with them.

Last month’s accident, which killed more than 1,000, isn’t the first one involving garment factory workers. Still, the Bangladesh government has done little to protect those who are just squeaking out a living in what’s estimated to be a $20 billion industry that accounts for more than 75 percent of the country’s exports.

Why are these things allowed to happen? The answer is simple – much like the banking industry in the U.S., the garment industry in Bangladesh is too big to fail.

But the tide may be turning, both in Bangladesh and in the U.S.

In Bangladesh there’s been a groundswell of protests with factories being burned to the ground, and demands for regulation. Those demands, which not only are being heard overseas, but also in this country where many retailers rely on those factories for cheap labor, may serve as a bellwether for the future. In the wake of massive public outcry some retailers are scrambling to respond. But for those who died, it’s too little, too late.

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Banks open Pandora’s box by taking on federal judge

Friday, April 12th, 2013
Pandora's box

Pandora’s box

Seventeen of the nation’s “too big to fail” banks also apparently think they are “too big to lose in court.” They have joined forces to go up against a federal judge whose rulings they simply don’t like.

In doing so, the banks may have opened a Pandora’s box that ultimately could benefit the same group of people they have been going after – homeowners facing default on their mortgage.

First the back story:

A bunch of corporate attorneys representing JP Morgan Chase, Bank of America, Wells Fargo, Goldman Sachs, Morgan Stanley and Barclays, to name a few, recently took on U.S. District Court Judge Denise Cote by filing what is known in legal jargon as a “writ of mandamus” the purpose of which is to toss out a number of rulings she has made regarding the discovery process. Someone who believes they are denied a legal right generally files such a writ.

That’s a bold step to take against a member of the judiciary who holds your case in her hands. And, even bolder because of whom filed it. But if it works for them, what’s not to say it will not work for attorneys seeking to preserve the due process of homeowners who have been whisked through the courts like cattle off to slaughter?

Known as a no-nonsense judge who emphasizes efficiency in large, complex cases, Cote is handling one of the highest-stakes cases against the banks to date. The lawsuit, which was brought against the banks by the Federal Housing Finance Agency, alleges that the banks duped it into buying $200 billion in mortgage-backed securities without revealing the sloppy underwriting job. The agency, which oversees Fannie Mae and Freddie Mac, wants the banks to repurchase the bad loans.
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