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CFTC Helps Deutsche Bank Avoid "Bad Actor" Tag
Last week, Deutsche Bank agreed to pay $2.5 billion (or around $25,000 per employee) in connection with its role in manipulating LIBOR, EURIBOR, and a few other -BORs. Incidentally, the settlement also gave the world a window into just what star prop trader Christian Bittar (to whom we introduced readers in 2012) said to colleagues on the way to ‘fixing’ the fixings so to speak. Here are some highlights:
“My cash desk will be against us so we’ll have to do some lobbying,”
“LETS TAKE THEM ON !!”
“THEY’RE DOIN IT ON PURPOSE BECAUSE THEY HAVE THE EXACT OPPOSITE POSITION.”
As we noted when the news first broke, no one will go to jail for this of course, but theoretically, the settlement (which included payments to the NYDFS, the DOJ, the UK’s FCA, and the CFTC) should have landed Deutsche Bank on the SEC’s “bad actors” list, which is kind of like the Dodd-Frank equivalent of ‘time out’ and restricts the offender from participating in exempt securities offerings. Well as you might imagine, that’s no fun if you’re a Wall Street bank and it could end up costing you quite a bit of money in lost underwriting fees, but fortunately, there’s a way around it — you simply convince the regulator you settle with to exempt you from the SEC “bad actor” ban. Here’s WSJ with more:
Deutsche Bank AG last week was able to avoid the threat of a ban on selling stakes in hedge funds by tucking specific language into an $800 million agreement it reached with a different regulator—the Commodity Futures Trading Commission—to resolve an interest-rate-rigging probe.
Five other banks had similar provisions included in CFTC agreements resolving allegations of currency manipulation in November.
The language allows the banks to avoid asking the SEC for a waiver—a process that has become fraught with uncertainty amid commissioner disagreements over whether to allow financial firms to avoid a “bad actor” ban…
The 2010 Dodd-Frank law imposed certain restrictions on financial firms when they face securities-related criminal convictions or regulatory orders that involve fraud or manipulation charges.
Companies are restricted from selling private offerings for five years unless they get a waiver from the SEC to bypass the ban.
Institutions raised $903 billion in capital in 2012 through the type of offerings the bad-actor bar would impact, according to an SEC study.
But the SEC’s own rule governing the bad-actor ban allows language waiving the disqualification to be included in a regulatory settlement.
Here’s the specific passage in Deutsche Bank’s CFTC settlement which makes the “bad actor” designation null and void:
Of course it’s not just Deutsche Bank…
The same language was used in the settlements the CFTC reached with Citigroup Inc.,J.P. Morgan Chase & Co, Royal Bank of Scotland PLC, UBS AG and HSBC Holdings PLC in November, which together agreed to pay $1.4 billion in penalties to resolve charges that they tried to manipulate global foreign-exchange benchmark rates to benefit trader positions. The firms neither admitted nor denied the allegations.
...and in the final estimation, no bad actors will end up being classified as bad actors...
Some of the same banks are also expected to plead guilty to criminal antitrust charges in the coming weeks to end related Justice Department probes, which are not likely to trigger the bad-actor bar because they won’t involve securities violations. That means many of the institutions are unlikely to face the bad-actor bar at all.
It’s good to be TBTF.
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Yep
I don't know, this seems like "Good Acting" to me. At least if they pull it off.
"Deutsche Bank AG"
Finally, an Attorney General whose motive is "Transparent".
So the rapest goes home and the case is simply a disturbing the peace event. Amazing how we have gotten to this point.
Oh, so if you want to get away with a crime, just go through the CTFC.
Got it...
aw now I understand, just go thru the CTFC instead of the CFTC and BAM your no longer a bad actor.
That was my attempt at humour. no disrespect intended
"No bad actors were harmed during the filming of this crime scene."
Deutsche bank bad actors. that's all you need to read.
<<no bad actors will end up being classified as bad actors>>
Government regulatory agencies are nothing more than racketeering enforcement, when the government is run by bank racketeers. If they settle with the CFTC, or are praised by the CFTC, then that's how we know they are criminals, since CFTC exists to enable these racketeers to continue their operations by agreeing their cost of doing business.
Centralised government discredited itself when we all began seeing how easy it was for wealthy criminals to buy them off. Now their pretensions to morality are a running joke. Zero Hedge has become way more fun for me to read, when its outrage began to turn into laughter. Outrage takes belief in the system, but laughter comes when a discredited structure is on its way out.
Keep pointing and laughing at the CFTC, Tyler. You make my days a little sunnier with your black comedy. You inspire me to start on a satire, set in a ghetto empire, natch. (Yes, one of the characters should be named Tyler Hedge.) Possible street names: Cufflinks, Lythe, Moochie, Lord Fine... the cast list writes itself.
Pay the troll toll!
"Jimmy Diamonds" "Cash'n'Carry" "Hank the Skank"
Is Deutche bank controlled by Natzis or Jews these days?
Jew Nazis. They're controlled by Jew Nazis.
Hey you! Wanna be a criminal and get away with it?! Come be a banker and work on Wall Street!
Dodd-Frank
TITLE I--FINANCIAL STABILITY
Subtitle A--Financial Stability Oversight Council
Sec. 114. Registration of nonbank financial companies supervised by the Board of Governors.
Sec. 114. Registration of nonbank financial companies supervised by the Board of Governors.
Subtitle C--Additional Board of Governors Authority for Certain Nonbank Financial Companies and Bank Holding Companies.
Dodd-Frank is very good to the Board of Governors, to many to list.
What is a nonbank finacial company? (D) Nonbank financial company supervised by the board of governors.--The term ``nonbank financial company supervised by the Board of Governors'' means a nonbank financial company that the Council has determined under section 113 shall be supervised by the Board of Governors.
Looks like Dodd-Frank consolidated power.
Maybe crowd sourcing class action lawsuits against the banks?
They are all bad actors in a cheesy X rated sodomy lust film of the bankster porn genre.
What must CFTC regulatory capture be like?
Think, a black pawn surrounded by eight black queens.
Where do these big settlements with the DOJ & CFTC go to ??
Hypocrisy thine name is government.
doop
heute-show is makin fun of deutsche bank;)
http://www.zdf.de/ZDFmediathek/beitrag/video/2396272/heute-show-vom-01.0...
go to Min 14:13, im shure the tylers can use this shot;)
Bad actors? Not fit for gay midget porn!