MF Global Looted Customers’ Accounts Via Internal Bank Run Paul Joseph Watson Infowars.com Wednesday, November 16, 2011 Big players got warning ahead of time that financial broker was set to collapse Days before the doomed financial broker filed for bankruptcy, MF Global conducted “unexplained wire transfers” that led to a $900 million shortfall in client funds, leading customers like Gerald Celente to learn that their accounts had been looted and setting the precedent for internal bank runs as more big firms go bust. 1. According to Bloomberg, “Examiners from CME Group Inc., the world’s largest futures exchange, found unexplained wire transfers at MF Global Inc. and a $900 million shortfall in client funds during the weekend the failing broker was talking with possible buyers, a person briefed on the matter said.” CME noticed the missing funds on October 30, but MF Global didn’t inform the Commodity Futures Trading Commission until the day after, suggesting that the transfers were made, “in a manner that may have been designed to avoid detection,” according to CME. The suspicious cash movements are now being probed by the U.S. Justice Department. MF Global trustee James Giddens said in a court filing yesterday that customers would get back 60 per cent of their account funds, prompting fury amongst clients, many of whom used their accounts for business collateral and living expenses. Although individuals were burned by the broker’s downfall, larger clients were protected from the fallout because they had the miraculous fortune of withdrawing all their funds just weeks before the collapse. “Both the Commodity Futures Trading Commission and the Chicago Mercantile Exchange were charged with overseeing MF Global, their clearing member. If we are to believe them, they had no idea of any difficulties within the firm before customer accounts went missing just a few days before the collapse. But someone clearly knew of the cratering positions and imminent collapse of MF Global, as billions of dollars of accounts were “coincidentally” withdrawn,” writes Huffington Post’s Daniel Dicker, noting how funds in accounts owned by the billionaire Koch brothers were withdrawn just in time, clearly suggesting that big players got a “heads up” that MF Global was going down.
Although the collapse of MF Global was assured when it came to light that the broker was heavily exposed to the European debt crisis, causing the broker’s stock price to plummet, Fox Business reports that numerous circumstances indicate the downfall was in the works weeks before, drawing attention to the fact that employees didn’t receive commissions for the third quarter and were fired two weeks before the firm filed for bankruptcy. One of the victims of the scandal, popular trends forecaster Gerald Celente, joined Alex Jones on Infowars Nightly News to detail how a six figure sum was looted from his gold futures account, which, unbeknownst to Celente, was being held under the auspices of an MF Global subsidiary. As the Financial Times reported, the hundreds of millions in looted funds from customers’ accounts later “turned up at JPMorgan Chase, the failed broker-dealer’s custody bank.” Despite his account being fully funded, Celente was hit by a margin call as Chapter 11 trustees stepped in to take control of his funds, leaving his account empty thereby closing his positions and preventing him from taking physical delivery of his gold which was due in December. When Celente rejected demands to transfer more money into the account it was hastily closed. Speaking with Alex Jones, Celente expressed his fury at the move, labeling it an example of “economic martial law,” and speculating that the real reason for the looting was because the broker never had the gold and silver to deliver in the first place. Celente encouraged Americans to cash out of all gold ETFs and withdraw their funds from the bank because “they are going to steal all our money”. The trends forecaster savaged MF Global CEO Jon Corzine, labeling him a “cheap SOB” who was responsible for the collapse because of his using customer funds to bet on losing European bonds. “How come he’s not in jail, because he’s one of the white shoe boys from the Goldman Sachs crowd,” Celente fumed, going so far as to say Corzine “should have died” in his recent car accident. Celente said that he had sufficient funds stored in a safe place that could not be looted and that if anyone did try to steal them and threaten his life he wouldn’t hesitate to ‘blow their brains out’. Celente reiterated his plea to Americans to withdraw all their money from the banks and leave only operating capital in their accounts, warning that “the merger of state and corporate powers” has brought “fascism” to America. Zombie Banks Drain Celente's Account! 1/3 http://www.youtube.com/watch?v=J5OxXGjJBnM Zombie Banks Drain Celente's Account! 2/3 http://www.youtube.com/watch?v=5DLtHLSWMX0 Zombie Banks Drain Celente's Account! 3/3 http://www.youtube.com/watch?v=Sf9HIo8NJBg
Postal Service Logs Loss in Billions By 1. JENNIFER LEVITZ
The U.S. Postal Service said it ended another fiscal year with billions of dollars in losses, an expected announcement that continued to illustrate the agency's shaky financial picture. The Postal Service said it lost $5.1 billion through Sept. 30 and that the loss would have hit $10.6 billion without recent legislation allowing it to delay a required annual $5.5 billion payment into a fund for future retiree health benefits. But the payment postponed by Congress is now due by Nov. 18, and the agency repeated that it could run out of cash by the end of fiscal 2012 without congressional action. The Postal Service is an independent government agency whose operating budget isn't funded by taxpayers, other than a subsidy to serve overseas voters and the disabled. Postal Service heads said the agency could regain its financial footing by cutting annual costs by $20 billion by the end of 2015. The service "can become profitable again if Congress passes comprehensive legislation to provide us with a more flexible business model so we can respond better to a changing marketplace," Postmaster General Patrick Donahoe said in a statement. Lawmakers are weighing legislation that could let the postal service close more branches, drop Saturday delivery, venture into non-mail businesses and be relieved of certain retiree health costs. Revenue was $65.7 billion for the latest fiscal year, down from $67.1 billion the year before. Total mail volumes fell by three billion pieces, or 1.7%, from 2010. First-class mail, the agency's most profitable product, continued its steady decline as consumers continued to pay bills online and communicate digitally. The postal service lost more than $8 billion in fiscal year 2010. It has already begun closing post offices and some 300 mail-sorting facilities Write to Jennifer Levitz at jennifer.levitz@wsj.com
Analysis: SEC targets low-level bankers, spares top execs By Aruna Viswanatha Reuters – Tue, Nov 15, 2011 WASHINGTON (Reuters) - The U.S. government is not taking advantage of an enforcement tool that could potentially hold top Wall Street figures accountable for their role in the recent financial crisis, despite its prior success. Broker-dealers, investment advisers, and others regulated by the Securities and Exchange Commission are required to supervise their representatives. If a trader engages in misconduct, the SEC can sue the management with "failure to supervise." But in some of the biggest cases the SEC has brought in recent months -- against units of JPMorgan, Goldman Sachs, and Citigroup -- the agency has sued only low-level bankers. Public anger following the U.S. government bailout of major banks in 2008 is fueling such disparate movements as Occupy Wall Street and the Tea Party, but government lawyers say they are bringing cases based on the evidence they have. Some experts argue the agency could be doing more. "There is an affirmative obligation of supervisors to supervise their subordinates, but not a hint of that here," Duke University law professor James Cox said, referring to the SEC's recent cases against broker-dealer units of the top banks. "What I see as a method of operation is big entity fines, but not holding any responsible person responsible, thereby robbing enforcement of substantial deterrent effects," he said.
An SEC spokesman declined to comment on its enforcement strategy. The banks in question have paid between $153 million (JP Morgan) and $550 million (Goldman) since last summer to settle charges that they misled investors on complicated mortgage bond deals. Citigroup agreed to pay $285 million last month to settle similar allegations. Bankers at the three institutions, the SEC said, hid the fact that they structured the deal to bet against it themselves or on behalf of clients who planned to do so. A failure-to-supervise claim may have been challenging to bring in these mortgage cases. If the manager's actions, for example, didn't violate any of the firm's policies, it could be a tough case to make. In some of the deals at issue, it was the policies themselves that were at fault. But the SEC has used the tool in the past to go after some of the most iconic figures on Wall Street. When the SEC sued Salomon Brothers in 1992 over illegal bidding in Treasury auctions, for example, it didn't stop with the trader, Paul Mozer. It charged three members of the firm's top management with "failure to supervise" the trader: Salomon's chief executive, John Gutfreund, a vice-chairman and a president. The SEC extracted from Gutfreund an agreement never to run a securities firm again, while the others agreed to brief suspensions from Wall Street. All paid fines of $50,000 to$100,000. Such sanctions could be more difficult today, when companies often demand implicit agreement from the SEC to leave senior management alone in exchange for settling. "Generally, I think there is a desire by most companies to try to not have their employees be on the firing line," said former Republican SEC commissioner Paul
Atkins. Companies also seek to settle, while individuals will fight back, making the cases more difficult and time-consuming to bring. The SEC brought its case against Gutfreund for knowing about the misconduct but failing to alert authorities. Whether higher-ups knew about the conduct at issue in the mortgage cases is unclear. Defenders of the SEC say the agency is sensitive to public pressure to hold Wall Street responsible and is doing everything it can to bring those cases. If the actions against JP Morgan and Citigroup had been brought several years ago, the SEC likely wouldn't have charged any individuals, even lower-level ones, said one securities lawyer, who declined to be named. "They are looking for these cases, they are just not finding the evidence to support them," the lawyer said. But other securities experts say failure-to-supervise cases are important to pursue due to the reputational impact they have, and the related deterrent effect. "Maybe the facts weren't there, but I find that hard to believe," Duke's Cox said. (Reporting by Aruna Viswanatha; Editing by Gary Hill)
Fake terror plots, paid informants: the tactics of FBI 'entrapment' questioned By 1. Paul Harris in New York David Williams did not have an easy life. He moved to Newburgh, a gritty, impoverished town on the banks of the Hudson an hour or so north of 1. New York, at just 10 years old. For a young, black American boy with a father in jail, trouble was everywhere. Williams also made bad choices. He ended up going to jail for dealing drugs. When he came out in 2007 he tried to go straight, but money was tight and his brother, Lord, needed cash for a liver transplant. Life is hard in Newburgh if you are poor, have a drug rap and need cash quickly. His aunt, Alicia McWilliams, was honest about the tough streets her nephew was dealing with. "Newburgh is a hard place," she said. So it was perhaps no surprise that in May, 2009, David Williams was arrested again and hit with a 25-year jail sentence. But it was not for drugs offences. Or any other common crime. Instead Williams and three other struggling local men beset by drug, criminal and mental health issues were convicted of an Islamic terrorist plot to blow up Jewish synagogues and shoot down military jets with missiles. Even more shocking was that the organisation, money, weapons and motivation for this plot did not come from real Islamic terrorists. It came from the FBI, and an informant paid to pose as a terrorist mastermind paying big bucks for help in carrying out an attack. For McWilliams, her own government had actually cajoled and paid her beloved nephew into being a terrorist, created a fake plot and then jailed him for it. "I feel like I am in the Twilight Zone," she told the Guardian. Lawyers for the so-called Newburgh Four have now launched an appeal that will be held early next year. Advocates hope the case offers the best chance of exposing the issue of FBI "entrapment" in terror cases. "We have as close to a legal entrapment case as I have ever seen," said Susanne Brody, who represents another Newburgh defendant, Onta Williams. Some experts agree. "The target, the motive, the ideology and the plot were all led by the FBI," said Karen Greenberg, a law professor at Fordham University in New York, who specialises in studying the new FBI tactics.
But the issue is one that stretches far beyond Newburgh. Critics say the FBI is running a sting operation across America, targeting – to a large extent – the Muslim community by luring people into fake terror plots. FBI bureaux send informants to trawl through Muslim communities, hang out in mosques and community centres, and talk of radical Islam in order to identify possible targets sympathetic to such ideals. Or they will respond to the most bizarre of tip-offs, including, in one case, a man who claimed to have seen terror chief Ayman al-Zawahiri living in northern California in the late 1990s. That tipster was quickly hired as a well-paid informant. If suitable suspects are identified, FBI agents then run a sting, often creating a fake terror plot in which it helps supply weapons and targets. Then, dramatic arrests are made, press conferences held and lengthy convictions secured. But what is not clear is if many real, actual terrorists are involved. Another "entrapment" case is on the radar too. The Fort Dix Five – accused of plotting to attack a 1. New Jersey army base – have also appealed against their convictions. That case too involved dubious use of paid informants, an apparent overreach of evidence and a plot that seemed suggested by the government. Burim Duka, whose three brothers were jailed for life for their part in the scheme, insists they did not know they were part of a terror plot and were just buying guns for shooting holidays in a deal arranged by a friend. The "friend" was an informant who had persuaded another man of a desire to attack Fort Dix. Duka is convinced his brothers' appeal has a good chance. "I am hopeful," he told the Guardian. But things may not be that easy. At issue is the word "entrapment", which has two definitions. There is the common usage, where a citizen might see FBI operations as deliberate traps manipulating unwary people who otherwise were unlikely to become terrorists. Then there is the legal definition of entrapment, where the prosecution merely has to show a subject was predisposed to carry out the actions they later are accused of. Theoretically, a simple expression, like support for jihad, might suffice, and in post-9/11 America neither judges nor juries tend to be nuanced in terror trials. "Legally, you have to use the word entrapment very carefully. It is a very strict legal term," said Greenberg. But in its commonly understood usage, FBI entrapment is a widespread tactic. Within days of the 9/11 terror attacks, FBI director Robert Mueller issued a memo on a new policy of "forward leaning – preventative – prosecutions". Central to that is a growing informant network. The FBI is not choosy about the people it uses. Some have criminal records, including attempted murder or drug dealing or fraud. They are often paid six-figure sums, which critics say creates a motivation to entrap targets. Some are motivated
by the promise of debts forgiven or immigration violations wiped clean. There has also been a relaxing of rules on what criteria the FBI needs to launch an investigation. Often they just seem to be "fishing expeditions". In the Newburgh case, the men involved met FBI informant Shahed Hussain simply because he happened to infiltrate their mosque. In southern California, FBI informant Craig Monteilh trawled mosques posing as a Muslim and tried to act as a magnet for potential radicals. Monteilh, who bugged scores of people, is a convicted felon with serious drug charges to his name. His operation turned up nothing. But Monteilh's professed terrorist sympathy so unnerved his Muslim targets that they got a restraining order against him and alerted the FBI, not realising Monteilh was actually working on the bureau's behalf. Muslim civil rights groups have warned of a feeling of being hounded and threatened by the FBI, triggering a natural fear of the authorities among people that should be a vital defence against real terror attacks. But FBI tactics could now be putting off many people from reporting tip-offs or suspicious individuals. "They are making mosques suspicious of anybody. They are putting fear into these communities," said Greenberg. Civil liberties groups are also concerned, seeing some FBI tactics as using terrorism to justify more power. "We are still seeing an expansion of these tools. It is a terrible prospect," said Mike German, an expert at the American Civil Liberties Union and a former FBI agent who has worked in counter-terrorism. German said suspects convicted of plotting terror attacks in some recent FBI cases bore little resemblance to the profile of most terrorist cells. "Most of these suspect terrorists had no access to weapons unless the government provided them. I would say that showed they were not the biggest threat to the US," German said. "Most terrorists have links to foreign terrorist groups and have trained in terrorism training camps. Perhaps FBI resources should be spent finding those guys." Also, some of the most serious terrorist attacks carried out in the US since 9/11 have revolved around "lone wolf" actions, not the sort of conspiracy plots the FBI have been striving to combat. The 2010 Times Square bomber, Faisal Shahzad, only came to light after his car bomb failed to go off properly. The Fort Hood killer Nidal Malik Hasan, who shot dead 13 people on a Texas army base in 2009, was only discovered after he started firing. Both evaded the radar of an FBI expending resources setting up fictional crimes and then prosecuting those involved. Yet, as advocates for those caught up in "entrapment" cases discover, there is little public or judicial sympathy for them. Even in cases where judges have admitted FBI tactics have raised serious questions, there has been no hesitation in returning guilty verdicts, handing down lengthy sentences and dismissing appeals. The Liberty City Seven are a case in point. The 2006 case involved an informant, Elie Assaad, with a dubious past (he was once arrested, but not charged, for beating his pregnant wife). Assaad was let loose with another informant on a group of men in Liberty City, a poor, predominantly black, suburb of Miami. The targets were followers of a cult-like group called The
Seas of David, led by former Guardian Angel Narseal Batiste. The group was, perhaps, not even Muslim, as its religious practices involved Bible study and wearing the Star of David. Yet Assaad posed as an Al-Qaida operative, and got members of the group to swear allegiance. Transcripts of the "oath-taking" ceremony are almost farcical. Batiste repeatedly queries the idea and appears bullied into it. In effect, defence lawyers argued, the men were confused, impoverished members of an obscure cult. Yet targets the group supposedly entertained attacking included the Sears Tower in Chicago, Hollywood movie studios and the Empire State Building. Even zealous prosecutors, painting a picture of dedicated Islamic terrorists, admitted any potential plots were "aspirational", given the group had no means to carry them out. Nonetheless, they were charged with seeking to wage war against America, plotting to destroy buildings and supporting terrorism. Five of them got long jail sentences. Assaad, who was recently arrested in Texas for attempting to run over a policeman, was paid $85,000 for his work. This year the jailed Liberty City men launched an appeal and last week judgment was handed down. They lost, and officially remain Islamic terrorists hell-bent on destroying America. Not that their supporters see it that way. "Our country is no safer as a result of the prosecution of these seven impoverished young men from Liberty City," said Batiste's lawyer, Ana Jhones. "This prosecution came at great financial cost to our government, and at a terrible emotional cost to these defendants and their families. It is my sincere belief that our country is less safe as a result of the government's actions in this case."