Wall Street Demands Exemption From Punishment In Exchange For Guilty Pleas In FX Rigging

Tyler Durden's picture

Just three days ago in “Wall Street To Enter Hollow Guilty Plea On FX Rigging, Return To Business As Usual,” we lamented the fact that the Justice Department’s latest attempt to convince an incredulous public that the government is willing to prosecute white collar crime at TBTF institutions (which includes an amusing 'crack down' on UBS which we outlined herewill ultimately end in nothing more than the payment of a token fine before it’s back to business as usual. We also noted that there are actually SEC regulations in place specifically designed to ensure that so-called “bad actors” are punished in a way that is actually meaningful to them and as such serves to deter the type of behavior that results in the buildup of systemic risk and the rigging, fixing and manipulation of every market and -BOR on the face of the earth. Specifically, we said the following:

Even after Wall Street firms essentially admit to committing egregious fraud by ponying up billions to settle allegations of manipulation, policies put in place to ensure that deep pockets don’t allow big banks to simply sweep scandals under the rug once settlements are doled out are systematically skirted. The latest example of this was Deutsche Bank, who, after paying $2.5 billion to settle allegations its traders conspired to manipulate all manner of -BORs, worked with the CFTC to have language inserted in the settlement agreement exempting the bank from a Dodd Frank rule that restricts so-called “bad actors” from taking advantage of exempt securities transactions.

The excuse for allowing Wall Street to skirt the very penalties that were put in place as a result of the very things for which the banks are now being prosecuted is two-fold: 1) there’s the so-called ‘Arthur Andersen effect’ whereby the decade-old collapse of an accounting firm and the layoffs that accompanied it are somehow supposed to represent what would happen if a Wall Street bank were not able to claim seasoned issuer status, and 2) curtailing a major bank’s ability to issue capital “speedily and efficiently”, participate in private placements, and manage mutual funds represents a systemic risk.

We’ll leave it to readers to determine the extent to which any of that is an accurate portrayal of what would happen if big banks were unable to obtain waivers, but rest assured the waivers will be obtained as the following from Reuters makes abundantly clear:

Banks want assurances from U.S. regulators that they will not be barred from certain businesses before agreeing to plead guilty to criminal charges over the manipulation of foreign exchange rates, causing a delay in multibillion-dollar settlements, people familiar with the matter said…

 

The banks are also scrambling to line up exemptions or waivers from the Securities and Exchanges Commission and other federal regulators because criminal pleas trigger consequences such as removing the ability to manage retirement plans or raise capital easily…

 

Negotiating some of the waivers among the SEC's five commissioners could prove challenging because many of these banks have broken criminal or civil laws in the past that triggered the need for waivers.

 

Many of the banks want an SEC waiver to continue operating as "well-known seasoned issuers" so they can sell stocks and debt efficiently, people familiar with the matter said. Such a designation allows public companies to bypass SEC approval and raise capital "off the shelf" - a process that is speedier and more convenient.

 

Several of the people said another waiver being sought by some banks is the ability to retain a safe harbor that shields them from class action lawsuits when they make forward-looking statements.

The banks involved are also seeking waivers that will allow them to continue operating in the mutual fund business, sources said.

 

The plea deals could be announced as soon as next week, two of the people said, adding that not all the penalties had been finalized yet.

 

Peter Carr, a spokesman for the U.S. Justice Department, declined comment on the timing or reason for a possible delay of any agreements. Citi, JPMorgan, RBS and UBS did not respond to requests for comment. A Barclays spokesman declined to comment.

Note that the original version of this story said that plea deals could be announced as soon as ... well, as soon as two days ago, but just as we predicted, none of the banks will enter guilty pleas without a guarantee from the government that no actual penalties (because monetary fines don’t count when you’ve got access to cheap Fed cash) will apply.

You can expect The Justice Department to cave to these demands in relatively short order because while we know that TBTF guilty pleas represent but a pyrrhic victory (at best) for a regulatory regime that fell asleep at the wheel and allowed Wall Street to run the entire financial system into the ground, there will be no shortage of fanfare and congratulatory handshakes when the DOJ ‘proves’ how very serious it is by sending a few TBTF logos (but no actual people) to prison.

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ThroxxOfVron's picture

Fuck them.  Enough is enough: it's time to get tough on these scumbags.

Jail the criminal management, claw back restitution and provided said restitution directly to those persons and businesses that were defrauded and robbed.

Pull the banking charters and use Dodd-Frank to break up and liquidate the guilty.

Disavow and rescind the outrageous and misguided grant of seniority to Derivatives over Deposits by the FDIC.

Re-institute Glass-Steagal word for word as origianlly written -and break up the TBTF criminal syndicates.

MonetaryApostate's picture

The Kleptocracy will not jail their own underlings who are obeying orders, it'll never happen...

They will simply pick some peon to hang & say "See, justice was served" while they return to stealing.

MonetaryApostate's picture

Is the Digital Age about to be pushed upon us?

 

Are they going to close the markets & Banks soon?

 

Are you even paying attention to the possibilities?

HowdyDoody's picture

Corporations are people? If so, jail the corporation. What does that mean? Deprive the corporation of its liberty - no share transactions, no income, no sales.

MonetaryApostate's picture

Awareness & Understanding leads to solutions....

We must see the problems of the future before they are unavoidable... 

illyia's picture

Such idealism. Tisk-tisk...

This goose looks cooked to me and all the great ideals in the world will not uncook it. I am almost ready to cheer for the overlords - hey, they're going to win anyway, and it leaves some time for sharpening the knives.

Because, that is what it is going to take.

Very sharp knives.

MonetaryApostate's picture

What if I there was an infinite free energy device that could power, heat, & cool cars, boats, yachts, planes, homes, helicopters, etc.?

What if there was a very simple & affordable constructional system that could be used to build almost any known structure without nuts or bolts, that a 3rd grader could use?

What if we stopped destroying the earth digging for precious metals, diamonds, gas, and oil?

There are solutions, but who's willing to move forward with them?

Kaiser Sousa's picture

KILL THEM ALL.

 

that is all.

boattrash's picture

Throxx, and let's not forget about all the asset forfeiture, and civil forfeiture laws we could use on 'em...

mt paul's picture

just wondering

do all these billions of dollars in  fines the banks pay

 

get counted as GDP growth

venturen's picture

hey like the Boston Bomber...DEATH!

Chuck Knoblauch's picture

I hope the children of DOJ employees are watching how mommy and daddy punish the bad people.

And I hope they grow up to be WS crooks.

Your parenting skills are pathetic.

litemine's picture

Isn't this just the American Way?  

The flag will keep you warm. 

America the beautiful ....lalalalalala

A Lunatic's picture

They want to continue to have your cake and eat it too........

boattrash's picture

I heard Pablo Escobar requested a deal like that too...

mt paul's picture

they want to eat

your cake too..

Prober's picture

the proletariat vermin who lied about their incomes on their no-down-payment mortgage applications did not get ANY punishment

the politicians (clinton, barney frank, chris dodd, ALL the democrat vermin and most of the republican vermin) who created the government policies and programs to stuff proletariat vermin into houses they did not deserve and could not pay for, did not get ANY punishment

why should the financial manipulators get any punishment for anything they do ????????

 

chunga's picture

you've got to be kidding, did you forget your sarc tag?

N2OJoe's picture

We have enough lamppost for all of them, no reason not to start with this group.

Cripkuwy's picture

Corrected Version:

Maffioso want assurances from U.S. regulators that they will not be barred from certain businesses before agreeing to plead guilty to criminal charges over the manipulation of foreign exchange hustles, causing a delay in multibillion-dollar settlements, people familiar with the matter said…

The maffioso are also scrambling to line up exemptions or waivers from the Securities and Exchanges Commission and other federal regulators because criminal pleas trigger consequences such as removing the ability to manage retirement scams or defraud capital easily…

Negotiating some of the waivers among the SEC's five commissioners could prove challenging because many of these maffioso have broken criminal or civil laws in the past that triggered the need for waivers.

Many of the maffioso want an SEC waiver to continue operating as "well-known seasoned pushers" so they can sell dope and hookers efficiently, people familiar with the matter said. Such a designation allows public companies to bypass SEC approval and defraud capital "off the shelf" - a process that is speedier and more convenient.

Several of the people said another waiver being sought by some maffioso is the ability to retain a safe harbor that shields them from class action lawsuits when they make forward-looking statements.

The maffioso involved are also seeking waivers that will allow them to continue operating in the mutual racketeering business, sources said.

The plea deals could be announced as soon as next week, two of the people said, adding that not all the penalties had been finalized yet.

Peter Carr, a spokesman for the U.S. Justice Department, declined comment (quid pro dough, wink, wink) on the timing or reason for a possible delay of any agreements. Citi, JPMorgan, RBS and UBS did not respond to requests for comment. A Barclays spokesman declined to comment.

/ END correction

Bobbo's picture

That just sounds right, no?

ch25061's picture

There is either one law or no law....looks like we will have to revisit the painful lessons of history a few more times before they

finally sink in.

LawsofPhysics's picture

Well of course.  No prison time, no deal.

Besides, I have a printer/computer too, I amd going to finance myself...

 

fuck em, money creation no longer require COLLATERAL etc. fuck em right to hell...

Stoploss's picture

COLLATERAL

 

Absolutely no clue what that word means.

Is it a rayciss slur?  Sounds rayciss..

 

ThroxxOfVron's picture

"COLLATERAL "

Mortgages don't pay themselves.

Ore doesn't mine itself or process itself into iron, steel, or thenceforth into finished girders, tools, rails, etc...

Oil doesn't drill wells or refine itself into unleaded.  Neither does water pipe itself up out of the aquafers and into the sinks and bathtubs..

The fields to not till or plant or harvest themselves.  

Cattle do not fry themselves as hamburgers and fish do not swim over to Red Lobster and jump onto plates.

 

There is only ONE collateral in the world: human productivity.

 

LawsofPhysics's picture

Bingo, and I will produce for me and my tribe.  fuck you.

you enjoy myself's picture

what's a "waiver"?  i'm not going to freaking read Dodd-Frank, but does the law actually provide for waivers?  if it does, then being a 'bad actor' means nothing in practice.  if it doesn't, then this is completely lawless.

Buster Cherry's picture

I want them to get what Tsarnaev got.

They did a hell of a lot more damage....

czarangelus's picture

Uh ok, let's make good on that threat and try you.

Bryan's picture

Where there is no consequences, there is no change.

 

Joebloinvestor's picture

There should be an escrow setup where they pay 10 billion per exemption.

Forfeited for cause.

CHC's picture

WALL STREET.........................KISS  MY  ASS!!!!!

Fun Facts's picture

Clearly, obviously, the central banking cartel owns the USA.
They own the politics, the money, the media and the foreign policy [military].

As it was intended.

"And the banks -- hard to believe in a time when we're facing a banking crisis that many of the banks created -- are still the most powerful lobby on Capitol Hill. And they frankly own the place," - Sen. Dick Durbin

"Give me control of a nations money and I care not who makes the laws" - M.A. Rothschild.

America is no longer a sovereign nation. Instead, it is a globalist property full of human resources. An idiocracy. The citizens will be used until they're used up.

GRDguy's picture

Hey, just because THEY got caught lyin' and stealin' in one area of finance, THEY think they should be allowed to continue lyin' and stealin' in other areas of finance. The wolves among the sheep. You'd think that sheep would at least migrate out of the wolve's territory. That must be why they're called "muppets."

kchrisc's picture

The guillotines are watching, listening, and listing.

Liberty is a demand. Tyranny is submission..

gwar5's picture

Next time I get pulled over by a cop I'll be sure to get my assurances before I hand him my license.  Who knew you could even do that? What a country.

In.Sip.ient's picture

Ah yes, the TBTF... LOL

 

With the FEDs about to hike interest rates to

ward off the existential threat to US$ reserve status,

the TBTF are busy trying to get US ( or maybe

its bankster  CB ) allies to lower their rates again.

 

Just like they did last winter.

 

And y'all think its all rosy being scam artists...

er... I mean bankers... on WS.

 

 

 

 

Bobbo's picture

Exemption from punishment.  Plead guilty.  Keep the loot.  Teach at Stanford.  Sounds OK to me.

Do they have to promise not to do it again?