Subscribe

Finally, a Few Bankers Face Criminal Prosecutions for Conspiracy

Media coverage fails to connect bankers’ crimes to harm done to society

By Danny Schechter Created: December 27, 2012 Last Updated: December 31, 2012
Related articles: Opinion » Viewpoints
Print E-mail to a friend Give feedback

Businessmen walk toward the offices of Swiss bank UBS in the city of London on Oct. 30. On Dec. 19 the United States charged two former UBS bankers with conspiracy to commit fraud. (Carl Courtt/AFP/Getty Images)

Businessmen walk toward the offices of Swiss bank UBS in the city of London on Oct. 30. On Dec. 19 the United States charged two former UBS bankers with conspiracy to commit fraud. (Carl Courtt/AFP/Getty Images)

When most mainstream media outlets discuss conspiracy theories, it is usually to debunk the views of dissenting and critical thinkers who are routinely denounced as simplistic, paranoid, or worse.

You have frequently seen the mantra questioning their motives and conclusions as if the idea of people or officials acting together covertly to advance their interests in illegal ways is something new in history.

If the law doesn’t apply equally to everybody, then you don’t really have a system of law.

Until recently, U.S. press outlets characterized conspiracy arguments as rants that lacked any factual basis, engaged in guilt by association and stretched the facts.

The only conspiracy charges they tended to look at uncritically were criminal complaints against the Mafia under anti-racketeering statutes like the RICO statutes. Prosecutors loved these cases because normal concerns with protecting the rights of defendants didn’t apply when hearsay evidence was permitted.

But now, four years after the financial crisis, prosecutors have finally discovered what critics have been alleging repeatedly: that big banks were crooks, engaging, among other illicit practices, in secretive, illegal, and conspiratorial schemes to rig baseline interest rates and manipulate credit markets.

Scandal Breaks

It has now been admitted that traders at two major financial institutions were fixing LIBOR—the London Interbank Offered Rate, used to set the interest rates of $800 trillion worth of financial products, including credit cards and mortgages.

That figure again: $800 trillion!

The banks: Barclays and UBS. At first, regulators got them to agree to pay fines in so-called “settlements,” which are viewed by these institutions as a cost of doing business.

Barclays shelled out $450 million, but UBS went further paying a whopping $1.5 billion fine, to be split between the United States, the U.K., and Switzerland. They also admitted to fraud and bribery. (Usually banks settle such complaints without any admission of responsibility).

The Brits took the money, but U.S. prosecutors went further and also lodged criminal charges against two former UBS senior traders for the Libor manipulation. They are the first individuals to be charged in what Reuters called “the wide-ranging investigation that involves more than a dozen big banks.”

‘Systemic Corruption’

Only two were charged, and neither works for UBS anymore. The Naked Capitalism site scoffed: “So far, the top echelon of UBS is unaffected by this epic scandal. Until we see executives suffer (and fines are insufficient if they remain wealthy), it’s a no-brainer that this type of behavior will continue, albeit in different businesses and new guises.”

The practices were “absolutely rampant” between 2005 and 2010, according to the Daily Beast which also noted:

“Both the Barclays and UBS settlements show a combination of systemic corruption—senior officials who did not seem to care about illegal activity going on—and a tight-knit, foulmouth fraternity among the traders themselves.

“While the Barclays boys talked about buying each other Bollinger, (ie. pricey champagne), the UBS fixers deployed nicknames, profanity, and a total disregard for the fact that their communications with each other might one day be made public.”

We keep hearing reports about our economic woes without any discussion of what is behind it.

The Wall Street Journal couldn’t ignore the story and reported that regulators “alleged” a vast conspiracy, even after the banks admitted to some of what they had done. Rupert Murdoch couldn’t resist his tabloid training by having two UBS stars quoted in large type on the front page:

• Said a broker to a trader: “Mate your getting bloody good at this Libor game … think of me when yur on your yacht in Monaco won’t yu.”

• Said the man called “Trader A”: I need you to keep it as low as possible … if you do that … I’ll pay you, you know, “$50,000, $100,000 dollars … whatever you want. … I’m a man of my word.”




  • http://twitter.com/httpSerendipity An Anarchist’s Voice

    800 trillion … that makes the Rothschilds 280 trillion or the Bush family’s 70 trillion look like not so much.

  • John Doe

    People who invested with Bernie Madoff certainly were taken advantage
    of. Just like millions of people whose taxes are used to subsidize
    unethical things so that some politicians can gain favor and donations.
    One thing comes to mind: if people don’t understand what’s going, if
    they don’t ask “why is this how it is?” just for the sake of
    understanding the world they live in– they’ll inevitably drift with the
    current of what’s going on, be it good or bad. When unethical people
    try to use the circumstance for their personal gain, who’ll be there to
    stop it? Only those who have valued understanding as a virtue. Those
    who don’t understand what’s going on have no recourse. Understanding
    the world is in of itself a virtue to cultivate, while ignorance leads
    to sloth, helplessness. Everyone who has the ability then must do their
    best to understand what they can, and to seek to understand. The
    world’s a harsh place, but this is why people are granted the faculty to
    overcome evil, at the very least by opening their eyes to the world
    around them. It’s those people themselves who remain unaware that suffer
    the most.

    FYI: look up– “Harry Markopolos” uncovered Madoff’s scheme NINE years before he was exposed. He brought his findings to the chair of the Securities and Exchange Commission. He was ignored. Why? One reason is that the people charged with policing the system where themselves profiting from the scheme. Much like the regulators who allowed massive bank fraud to happen right under their noses. Some of them where personally invested in those banks. Some of them were directed by politicians who were getting huge lobbying donations to look the other way or whose political agenda prevented them from asking questions.


GET THE FREE DAILY E-NEWSLETTER


Selected Topics from The Epoch Times

James Goodlatte