Posts Tagged ‘the wall street’

The Facebook Fraudster, and the Key To Prosecuting the Robosigners

Friday, November 2nd, 2012

Roy Oppenheim’s commentary was originally published on Yahoo! Homes and is being republished on South Florida Law Blog with their permission.

I love hypocrisy, and try as a I might, I can not escape it.

Here is the latest, and it is a rich one. Federal prosecutors have decided to indict a fraudster who tried to bilk Mark Zuckerberg, founder of Facebook.

Paul Ceglia claimed he had a contract where Zuckerberg gave him half the company years ago in exchange from some coding he did for the young college entrepreneur.

Fast forward and now Ceglia has been accused of being a decent forger but not as good as Frank Abagnale Jr. (the con-man who was memorialized by Leonardo DiCaprio in Catch Me If You Can“).

The U.S. attorney’s office in Manhattan arrested Ceglia, alleging he faked part of that contract by forging it from parts of a real contract he had with Zuckerberg to work on another site that had nothing to do with Facebook.

If you believe the U.S. attorney’s office, Ceglia is the fed’s version of Abagnale 2.0, a huckster out to make billions at the expense of others.

Here’s what U.S. Attorney Preet Bharara said in a press release announcing Ceglia’s arrest, after claiming that he doctored, fabricated, and destroyed evidence involved with his initial lawsuit: “Ceglia’s alleged conduct not only constitutes a massive fraud attempt, but also an attempted corruption of our legal system through the manufacture of false evidence. That is always intolerable.”

And that is where I nearly fell out of my chair.
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Presidential Debates Let Wall Street Off the Hook

Friday, October 26th, 2012

Roy Oppenheim’s commentary was originally published on Yahoo! Homes and is being republished on South Florida Law Blog with their permission.

So we’ve managed to get through all three presidential debates.

But although the presidential election is (thankfully) in the home stretch, did we really learn anything new about either President Barack Obama or Gov. Mitt Romney?

And more importantly, what everyone should be asking is why neither candidate refused to acknowledge the 900-pound gorillas in the room. They were there, but they got a cursory glance at best. These issues are glaring and obvious, yet it is as if they did not exist. It is the reason why many voters are still scratching their heads and asking the following questions.

Why isn’t housing the No. 1 domestic economic issue in this campaign?

Both the president and Romney spent exceedingly too much time on the national debt, when our economy starts and ends with housing. For the first time since the Great Depression, the real estate market has not pulled the economy out of recession. Structurally that is huge, because it was in fact the real estate market that caused the recession in the first place.

But more importantly, the recession was caused by greed and a confluence of people falling asleep at the switch. You have the government that has not properly regulated the banks, who have used their cozy relationship with the regulators to grow larger and more powerful as our nation’s leaders stood idly by.

And now you are left with entire industries, including Wall Street, effectively overshadowing the role of government. At times it seems like moral character has been checked at the foot of Wall Street.
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Wall Street Has Ruled….Because of the Wall Street Rule

Wednesday, October 3rd, 2012

An edited version of this post originally appeared on Yahoo! Homes and is being republished on South Florida Law Blog with their permission.

Wall StreetI am often asked how Wall Street has managed to be so reckless, with little to no regard for its customers and its investors, yet avoid any real consequence for its actions.

The easy answer, if there is one, is that no one has really tried to change the very culture of the banking industry. Corrections have been at the micro level, yes, but these granular solutions have merely chipped away at the problems with mortgage securitization.

No one until this point has been bold or audacious enough to stand up to the banks. Maybe it’s because of fear of blowback from the bankers and their powerful allies, maybe it’s that the regulators and legislators actually don’t know how take them on.

Wall Street has always managed to have a defense that it always seems to fall back on whenever its motives are questioned.

Banks have used it so often there is actually a name for it. It’s called the Wall Street Rule.

Two Brooklyn Law School professors recently, and succinctly, brought attention to the Wall Street Rule and how it applies to the mortgage securitization engine. Bradley Borden and David Reiss correctly argue mortgage backed securities were flawed from the start.

By convincing Congress to ease certain tax restrictions back in 1986, these securities called REMICS were created and became a loophole to allow the banks to avoid paying income tax on millions upon millions of mortgages, which I alluded to back in August.
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