Justice Department To Announce Historic Wall Street Crackdown, Expose Over 300 Criminal Defendants

Tyler Durden's picture

Something big is afoot: Bloomberg has just announced that The Justice Department today will announce arrests in a crackdown on investment frauds including Ponzi schemes and stock market manipulations, according to a U.S. law enforcement official familiar with the matter. It is unclear how much if any of this will be related to the recent investigation into SAC, aka expert networks. But it appears the sting will be one of the biggest in history: "The law enforcement operation, which began in August, involves more than
300 criminal defendants and 180 civil defendants, according to the
official, who wasn’t authorized to speak publicly and spoke on condition
of anonymity." We will closely follow and report as we see any news.

Update: it appears the revalation is nothing but the Justice Department patting itself on the back for (lack of) work already done. Apparently somehow Wall Streeters have already gone to jail in some parallel universe in which the Justice Department actually operates.

  • DJ US Announces Results Of Largest-Ever Investment Fraud Probe
  • DJ Alleged Frauds Caused $8.3 Billion In Losses
  • DJ Schemes Allegedly Harmed 120,000 Victims
  • DJ Nearly 350 Criminal, And 189 Civil, Defendants Netted In Probe
  • DJ Probe Has Resulted In 87 Prison Convictions
  • DJ Schemes Allegedly Harmed 120,000 Victims

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Ragnarok's picture

Obama trying to set the tone for the next couple of months. Nothing concrete will come of this, more settlements.

espirit's picture

Are the 300 all Waddell & Reed employee's?

Slash's picture

they're sacrificing some small timers/hedge funders to appease the sheeple and make it appear like there is a cop on the beat. I'll believe it when I see lord blankfein and dimon in cuffs next to madoff.

LongSoupLine's picture

yep, so what's the over/under that none of them are from Fed "Primary Dealers"?

Kobe Beef's picture

Exactly. Big Fascist fish (Primary Dealers) eat the little ones. The White House gets to put on a little "Justice Theater".

Thanks all Z'edge commenters for spotting this little fake out early.


StychoKiller's picture

"The Colonel has been shot!  ROUND UP THE USUAL SUSPECTS!"

caconhma's picture

The Urgent.

Martha Stuart ans Sam Waksal alike will be arrested & convicted all over the USA and will be sent to Guantanamo jail.

Just in a preparation for the 2012 election.

Sudden Debt's picture

and some moron will take all the blame and get a deposit into his account after the sentence of a few million and that's that.


I've already seen that movie.

TheGreatPonzi's picture

Good news, but we should remember that the only reason they got caught is that they've been abandoned by the bigger crooks, just like Madoff.

"In a closed society where everybody's guilty, the only crime is getting caught. In a world of thieves, the only final sin is stupidity."

Hunter S. Thompson

Popo's picture

Number of upper management at TBTF banks?  Zero.


Anyone want to take the over on that?

H. Perowne's picture

Nah. I was born at night, but not last night.

weinerdog43's picture

Me either.  It would mean Inaction Jackson (Eric Holder) would actually have to, you know, prosecute someone.  Can't let that happen.

been there done that's picture

So tomorrow when we pull out funds, ask for 100$ bills. It seems they are low on them.



Res ipsa loquitur's picture

Just a bunch of tiny sacrificial lambs. No one big.

doggis's picture

.....and i guarantee everyone, not one person will be implicated from a money center bank..................... crackdown my ass!

wiskeyrunner's picture

Yep, just cull the little ones. 

Cognitive Dissonance's picture

 "The law enforcement operation, which began in August,......

Sorry, but the dead-to-the-world Justice Department just noticed there were problems this past August? Bullshit.

They're beginning to notice the natives are getting restless and they needed to appear to be doing something. So they're cracking on the most egregious (and obvious) examples of fraud and corruption gone wild.

SheepDog-One's picture

Theyve been crackin down since August...OH yea sure....in other words Wikileaks is about to make some Wall St bankster bigwigs, and Big Dummy Obama, very uncomfortable so lets shift some focus to some little wigs.

Minion's picture

Yo, sheepdog, whassup?

You've been wearing yourself out, thrashing against the tide of currency debasement. Go long.

Dantzler's picture

*** Ding ding ding! ***


We have a winner

Shameful's picture

"So they're cracking on the most egregious (and obvious) examples of fraud and corruption gone wild."

Going to have to disagree.  They will gather heads to show the restless natives, but it will be the heads of the least connected to the great ponzi machine, not the most blatant examples of fraud.  The chances of this hitting the bit well known frauds is nearly 0, it's not GS is in danger.  The people may be asleep but even some of the dull know GS has been involved in screwing them.  Get a few smaller players to show when the people start sniffing around. 

Makes me wonder if they are doing this because they expect a market turn and want a few people to show off as the reason.

Cognitive Dissonance's picture

We are in basic agreement, but you are seeing this through your informed eyes.

I'm talking about average Joe and Jane here. So I'm talking about egregious and obvious from the uninformed public's point of view. Which doesn't mean JPM or Goldman to name just two.

We will see a parade of "no names" as far as the public is concerned and the public will be told they are the egregious and most corrupt and their crimes were obvious to the Justice Dept. And they will trot out evidence of how obvious it was because Justice will tell us it's obvious. And the public will accept what they are told because the authorities told them.

Shameful's picture

I nominally agree, but hasn't GS hate gone quasi main stream?  It was in Rolling Stone after all.

The issue with the public being told that these are the bit players of fraud is it will happen again.  It's a good trick to use.  But not sure how many times "the major ring leaders" can round up time after time an the masses accept it.  They are pretty dumbed down and brainwashed but not sure it's to the level of full crime stop yet.

If I was the Gov I wouldn't even claim they are big players.  I would point out investigations are ongoing and this is just preliminary, but that we are doing out best to protect the American people...and do the announcement holding a puppy.

Have to ask why now?  Zimbabwe Ben was kinda pleading with the masses to put their money up to be robbed and I can't imagine this will fill people with confidence.

Cognitive Dissonance's picture

Have to ask why now?  Zimbabwe Ben was kinda pleading with the masses to put their money up to be robbed and I can't imagine this will fill people with confidence.

Shameful, you're an educated and aware person. So the mind of the asleep or desperate to remain asleep is foreign to you. It's simply incomprehensible, even impossible to understand why so many people want, need and demand that their leaders continue to lie to them.

To those who are not in denial, those in deep denial are impossible to understand. It helps to see them as severely addicted and that they just can't stop seeking more denial. It's an obsession on par with drugs and alcohol and one of the reasons I use the addicted as examples when writing about those who are in denial. While we may think we can understand, there is no way of really knowing without actually experiencing it.

As a male, I may try to understand what it's like to give birth. I can read about it and talk to women who have given birth. I may be extremely empathetic and even convince myself I know what it's like. But unless I actually experience giving birth I'll never know. Until you actually experience the absolutely desperation of denial and the control it has over you, it's impossible to understand.

Ripped Chunk's picture

That is how it has worked for years and years. The upstarts and those deemed to be making too much $$ at the expense of the old line oligarchs are "offered up" for prosecution.

This has happened over and over and over again.

been there done that's picture

I went to see the movie "Inside Job" last night. After the movie I was in the lobby and people seemed pretty pissed of. I said "Bank Run on Tuesday! and one of the guys said ya! I'm moving it into my credit union.

Popo's picture

Final Verdict:  "You naughty boys.  Two slaps on the wrist, and a fine representing 10% of this years bonus.  Now get back to work you silly things."

flacon's picture

Are they going to arrest Blythe Masters? Wouldn't that be a stunner if they did?

Bring the Gold's picture

No it wouldn't. I actually have called for it. She looks like a bag holding chump to me.

I don't give two poops about Blythe Masters. I want Dimon or better yet Lord Rothschild, David Rockefeller or whoever he takes orders from.

Quintus's picture

I expect that 'Stock market manipulations' will only be prosecuted if they have a downward bias, and that commodity market manipulation will be excluded completely, or limited only to those schemes not aimed at suppressing commodity prices.

Spalding_Smailes's picture

Got DRYS ? Up 30% in the last month. Up 6% today.... Lots of volume.


Traded over $100 in 2008. Today $6.25


As of April 6, 2010, the Company owned, through its subsidiaries, a fleet of 39 drybulk carriers consisted of seven Capesize, 28 Panamax, two Supramax vessels and two Panamax newbuilding vessels, which have a combined deadweight tons of approximately 3.3 million dead weight tons. Its drybulk fleet principally carries a variety of drybulk commodities, including major bulk items, such as coal, iron ore, and grains, and minor bulk items, such as bauxite, phosphate, fertilizers and steel products.

Debt remained much dominant in its capital structure as the most recent quarter total debt was $ 2.91 billion and total cash included $ 367.14 million.

hbjork1's picture


Held Drys for about a year.  Sold a little too soon.

T-888's picture


Oh, sorry. Thought that was a joke for second....

Pining for the Fjords's picture

It is.  Trust your instincts.

Oh regional Indian's picture

Pat. Pithy. Great advice.

A joke, only not funny.

Now that, is a joke.

Justice department, double speak, like defense department.



Pining for the Fjords's picture

Hey ORI- you post regularly, why not get yourself an avatar?  I often skip over those with the anon. bag-head, but you comment regularly and thoughtfully and shouldn't be skipped.  And you can't do worse than a dead stuffed parrot ;)

mtomato2's picture

I know!  I really like him/her...

Bring the Gold's picture

Me too ORI is a great poster. One of the many jaw droppingly brilliant posters on this site. ZH is one of the few places I go where I feel I'm in the bottom 30% IQ wise. Amazing stuff here.

mtomato2's picture

I know.


"I'm not really a dummy, but I have to play one on Zero Hedge..."

hbjork1's picture


IMO only, (I say only because I have seen only a 75 year slice of history.  All the rest is assumed based upon the writings of other people.)

These are times of change with some people being pulled out of a stone age culture and others being forced into an awareness of a larger world.  

I consistently tout Eric Hoffer's little book "The True Believer", and its extension "Ordeal of Change" as an element of background for thinking about human behavior in the western world during times of change.  Because it relates to Maslow's "Heirachy of Needs", it may be universal as the more primative parts of the world are ;ulled into different lifestyles. 

Hoffer himself is interesting.  You may find him ro be an interesting intellectual associate.

nathan1234's picture

A few sacrificial lambs for the Wall Street altar. And then life carries on as normal

lizzy36's picture

When someone is convicted, actually serves jail time and writes the government a check for $500m (see michael milken), then i might get interested.

Further, can someone find me a strategist/forecaster/astrology major, from a bulge bracket firm who has forecast a DOWN year for the S&P at any time in the past 10 years? Anyone?

Cognitive Dissonance's picture

I love rhetorical questions. They usually answer themselves.

kaiserhoff's picture

There was one old Ozzie Aborigine divining wallabee guts..., oh wait, that was a Harvard economist who just looked like..., never mind.

Kali's picture

Milken was given a presidential pardon out of prison.  He has been back playing his games for a long time.  I don't think that is a good example.

the not so mighty maximiza's picture

I am sure all 300 can't snitch on the bigger guys.