Aug 14, 2012
London-based Standard Chartered Bankagreed to pay $340million to settle New York state charges that it illegally funneled hundreds of billions of dollars to Iran, even as other probes by federal regulators are continuing.
New York's Department of Financial Services surprised fellow regulators last week when it unveiled a blistering report accusing Standard Chartered of conspiring with Iran to launder $250billion from 2001 to 2007 to bypass US economic sanctions.
Note that no criminal charges apply here, just a fine of $340 million (with an "m") to settle up on a conspiracy where over $250 billion (with a "b") was involved. Even the idea of "punitive' seems to be beyond the grasp of current regulators and enforcers. Crime does pay and is virtually risk-free from a criminal perspective, but it has to be really big crime and it has to involve a bank.
Meanwhile, the US Commodity Futures Trading Commission (CFTC) is reportedly set to drop a four-year investigation (mainly held in private meetings) into silver manipulation, concluding -- surprise! -- that no such manipulation exists. Heading up the panel is ... wait for it ... wait for it ... Gary Gensler, a former Goldman executive.
Here we might not be overly impressed with the CFTC for having already missed both the MF Global and Peregrine Financial debacles that happened right under their ineffective regulatory noses, but the real damage is the constant erosion of faith in their obviously broken and sometimes crooked model that selectively enforces rules depending on whether or not the alleged miscreant is a very large institution.
Listen, it is really simple and has always been true: If someone can scam a market and make money, they will. Here's another potential example:
Jul 15, 2012
Motorists may have been paying too much for their petrol because banks and other traders are likely to have tried to manipulate oil prices in the same way they rigged interest rates, an official report has warned.
Concerns are growing about the reliability of oil prices, after a report for the G20 found the market is wide open to "manipulation or distortion".
Traders from banks, oil companies or hedge funds have an "incentive" to distort the market and are likely to try to report false prices, it said.
Petrol retailers use oil price "benchmarks" to decide how much to pay for future supplies.
The rate is calculated by data companies based on submissions from firms which trade oil on a daily basis - such as banks, hedge funds and energy companies.
However, like Libor - the interest rate measure that Barclays was earlier this month found to have rigged - the market is unregulated and relies on the honesty of the firms to submit accurate data about all their trades.
I have no idea if or to what extent the oil markets have been manipulated, but given the fact that the system apparently relies to some degree on the "honesty of the firms to submit accurate data," I will have to reiterate that anything that can be rigged for profit will be rigged for profit.
While we might gnash our teeth, or become enraged or depressed at this state of affairs and lack of accountability, I think it's just as healthy to observe that it is what it is and plan accordingly.
The groundbreaking video I just recorded with the excellent team at Money May Press addresses the heart of the Ponzi scheme dynamic written about here. It focuses on the strategies and steps we as individuals can take to decrease our vulnerability to the myriad of exponential schemes that threaten not only our freedoms but very our way of life. To watch the video click here.
Also, there is a follow-on to this article, Part II: Protecting Your Wealth, in which we focus on the strategies and steps we as individuals can take to decrease our vulnerability to the dysfunction, manipulation, and sleight of hand discussed above.
The positive reality here is that there are alternatives to playing the game in the casino by the casino's rules.
Republished from Money Morning with permission.
Chris Martenson will make a newsletter presentation on "Peak Prosperity: How to Prosper In A Word of Peak Everything" and give an expert view on "The Crash Course: The Unsustainable Future of Our Economy, Energy & Environment" on Saturday, Sept. 22, during the Chicago Hard Assets Investment Conference.