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Conspiracy & Corruption

Conspiracy Theories

What Is Jade Helm, and Why Are People Worried About It?

It's a question on the minds of many Americans, especially Texans: What is Jade Helm? Is it a military exercise? Or is it something much more sinister than that?

Well, the government and the military say one thing, the people of Bastrop, Texas say something else entirely.

Here are the Jade Helm conspiracy theories everybody's talking about...

Wall Street

Don't Believe the Headlines – Big Banks Are Still Screwing You

When it comes to big banks' bad behavior and the fines they pay to settle "allegations" – which are actually civil charges and which would be criminal charges if applied to any other business or in any parallel universe – things aren't even close to what they seem.

Sure the headlines scream victory, at least monetary victory, for some ripped-off consumers, some hard-charging regulators, and our vaunted (NOT) Justice Department.

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Top News

How I Know JPMorgan (NYSE: JPM) Was Complicit in the Biggest Ponzi Scheme Ever

I've said it before, and even though I've been threatened, in not so subtle ways, and been warned not to piss off certain people in power, I'm going to keep on saying it:

JPMorgan (NYSE: JPM) is a criminal enterprise.

Yesterday (Monday) the mega enterprising bank began talks to settle civil and criminal charges that it ignored signs its banking client Bernie Madoff was a Ponzi-running, lying, cheating crook. (Which he was.)

Some might even call it criminal...

Washington

Volcker Rule Means "Sleepless Nights Ahead for Bankers"

After two years of review and lengthy revisions, all five regulatory agencies unanimously passed the controversial Volcker Rule on Tuesday.

The 953-page new version of the Volcker Rule imposes a strict ban on proprietary trading (when banks use their own funds to make trades). In effect, it bans banks from trading for their own gain. Included in the revised version is new wording targeting the sort of risk taking that was responsible for last year's $6 billion trading loss at JPMorgan.

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Top News

The Five Biggest Corporate Fines Ever in the United States

The JPMorgan Chase & Co. (NYSE: JPM) $13 billion settlement finalized Tuesday tops the list of the biggest corporate fines ever in the United States.

The Department of Justice, attorney general, and other agencies have said that the JPM deal will serve as a framework for resolving other lender issues, meaning more record-breaking fines could be on the way.

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Top News

What Can You Buy For $616 Million? Not Much, If You’re Steven A. Cohen

Steven A. Cohen's SAC Capital Advisors was one of the biggest, most powerful and profitable hedge funds on Wall Street. Cohen himself is a legendary figure, replete with odd, personal eccentricities that are the hallmark of the truly brilliant.

Famous for spending hours as a younger man watching the tape roll by, and for keeping his Stamford, CT, trading floor at a steady 68 degrees, Steve Cohen made billions for his clients – and himself.

Now the sharks are circling, the dominos are falling – nearly any hackneyed metaphor a writer could think of to evoke a doomstruck sentiment applies.

The SEC and Manhattan U.S. Attorney Preet Bharara have pursued Cohen and SAC Capital with a rare, almost indecent zeal. The charge is insider trading, allegations which Cohen vehemently denies, but which the SEC is pursuing.

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What is CISPA?

The Cyber Intelligence Sharing and Protection Act has kept the Internet buzzing this week, leading many to ask, "What is CISPA?"

Basically, CISPA would allow companies and government agencies to share information they considered to be a "cyber threat" with other private companies or the government and not be penalized for such sharing.

The divisive cybersecurity legislation comes up for a vote in the House Friday, and civil liberties groups, Internet groups, and a swarm of political leaders are taking a strong stance against the bill.

The American Civil Liberties Union (ACLU) maintains CISPA is a serious threat to domestic privacy laws and threatens to undercut vital privacy protections.

The ACLU argues the bill is even more insidious than the Stop Online Piracy Act (SOPA), stating that the legislation "would give the government, including military spy agencies, unprecedented powers to snoop through people's personal information–medical records, private emails, financial information-all without a warrant, proper oversight or limits."

Even the Obama Administration opposes the bill, siding with the Internet forces on this one. President Barack Obama said Wednesday he would veto the bill if it passed in current form.

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Are Federal Reserve Presidents Gaming the System?

The presidents of the U.S. Federal Reserve may not have used their knowledge for personal gain, but a look at their assets does show several apparent conflicts of interests. More than 600 pages of disclosure documents were released last week after Bloomberg News filed a Freedom of Information Act request. The most troubling revelation concerned […]

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Bankers Committed Fraud to Get Bigger Bonuses

In case you didn't catch the article titled "Guilty Pleas Hit the 'Mark'" in the Wall Street Journal, I'm here to make sure you don't miss it.

This is too good.

Three former employees of Credit Suisse Group AG (NYSE: CS) were charged with conspiracy to falsify books and records and wire fraud. They were accused of mismarking prices on bonds in their trading books by soliciting trumped-up prices for their withering securities from friends in the business.

By posting higher "marks" for their bonds in late 2007, they earned big year-end bonuses.

What a shock!

What's not a shock is that, after a bang-up 2007, Credit Suisse had to take a $2.85 billion write-down in the first quarter of 2008. No one knows how much of that loss was attributable to the three co-conspirators who were fired over their "wrongdoing."

Two of the three accused pled guilty. Also not shocking is the reason David Higgs – one who pled guilty – gave for his actions. He said he did it "to remain in good favor" with bosses, who determined his bonus and who profited handsomely themselves from his profitable trading and inventory marks.

As for Salmaan Siddiqui, the other trader who pleaded guilty? His attorney Ira Sorkin, the former Securities and Exchange Commission (SEC) enforcement chief, said of his client: "What he did was the result of his boss and his boss' boss directing him to do it."

You know what else is shocking?

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How JPMorgan Aided and Abetted the Largest Municipal Bankruptcy in U.S. History

Alabama's Jefferson County filed for bankruptcy protection on Wednesday, making it the largest municipal bankruptcy in U.S. history.

But believe it or not, that's not the biggest story here.

The big story is how JPMorgan Chase & Co. (NYSE: JPM) – specifically, JPMorgan's Securities arm – has a filthy hand in the whole Jefferson County saga.

This isn't breaking news. I've written about it before and so have others. You just may have missed it because the spin machine was so effective that the story got buried fairly quickly.

It's really an interesting story – albeit a long one. But unfortunately, I don't have the space and you don't have the time for all the grisly details, so here's the short version.

Jefferson County is full of characters – and a few who made it into the local government turned out to be good old boy crooks.

Jefferson County, home to Birmingham, had an aging and stinky sewer system. The Environmental Protection Agency (EPA) demanded that the county do something about it as far back as 1996.

And it did.

County administrators decided that a brand new sewer system needed to be built at an expected cost of about $1.5 billion. With that decided, the county commission had to decide who would run the financing operations, craft a plan to manage the debt, and float bonds to pay for the project.

Here's where I'm cutting out all the starch and getting to the meat of the story: Local politicians, who were in cahoots with local broker-dealers (securities firms), wanted a piece of all the money that was going to be sloshing around. They ended up demanding, and getting, hefty bribes from big securities firms to let them become the chosen ones to run this lucrative muni finance deal.

I'm not going to get into how Goldman Sachs Group Inc. (NYSE: GS) got involved in 2002 and ended up being paid some $3 million (some of which it passed along to "consultants") to get in on the deal – which incidentally it ended up doing nothing on, other than participating in a back-door swap arrangement with JPMorgan Securities. Nor am I going to get into Bear Stearns' dealings, nor the small securities dealers who acted as conduits for money being exchanged between JPMorgan and others.

Instead, I'm going to focus on JPMorgan, which ended up constructing the finance arrangements and doing most of bond deals that served to finance the building of the new sewer system – because that's where the story takes a truly ugly turn.

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