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Occupy the SEC, Frustrated With Regulatory Defiance of Volcker Rule Implementation Requirements, Sues Fed, SEC, CFTC, FDIC and Treasury

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Occupy the SEC has filed suit in the Eastern District of New York over the failure of the relevant financial regulators to issue a Final Rulemaking as stipulated in Dodd Frank.

If you read the claim below, you’ll see that the various regulators were given specific dates as to when to complete the rulekmaking. Not only are the out of compliance, they appear to have no intent of finalizing the Volcker Rule.

Occupy the SEC Volcker Rule Lawsuit 2/26/13 by

It is easy to dismiss this sort of undertaking as quixotic or agitprop, but that misses the point. If you look at effective opposition movements in other countries, such as Otpor in Serbia, they used stunts and humor to, as the BBC put it,

…dispel fear among those who want to show their opposition to the government.

And for long periods of time, while the rest of the opposition was in a state of slumber, Otpor demonstrated that there was a group of people who were prepared to overcome an all-pervasive apathy and demonstrate against the regime. Whatever the methods used, Otpor has always given proof of a seriousness of purpose.

In the US, the challenge is somewhat different. While the issue of widespread apathy is the same, one critical difference is that much of the public still fails to understand the degree to which the ruling classes no longer represent their interests. Oh, they may resent the banks, and they may also hate Congress, but most people deeply need to believe they live in a system that is fair and where business and political leaders (some if not all) still deserve respect and admiration. So efforts like this suit, which in a few short pages sets forth regulators have simply refused to do their job, whether out of intellectual laziness or due to their indulgence of bank stymieing tactics, puts another chink in the official defenses of cronyism.

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35 comments

  1. Bob Swern

    Occupy the SEC has done a brave, moving and beautiful thing!

    A quite concise and poignant post about it here at NC, too!

    (Paging judge Rakoff!!!)

    1. Bob Swern

      The closing paragraph of this post is outstanding! I particularly liked this part of it…

      …So efforts like this suit, which in a few short pages sets forth regulators have simply refused to do their job, whether out of intellectual laziness or due to their indulgence of bank stymieing tactics…

      By the way, here’s a link to Lanny Breuer’s explanation as to why he refused to do his job: http://www.dailykos.com/story/2013/02/27/1189876/-The-real-story-behind-Lanny-Breuer-s-Frontline-interview

  2. JGordon

    Don’t worry; a couple days without food in their kid’s bellies will cause people to radically change their apathy. Instantly no doubt. Of course that is what it’s going to come down to. But by then it will be too late so salvage anything.

    1. bulfinch

      It could also be that what you recongize as apathy is really just Americans who’re spread too thin with hustling to keep food in their children’s bellies.

      1. mookie

        I think this is true. I also think that the parent poster is correct in that, should everything head south, a couple of days without food in their bellies will make most people see through the whole charade. “Why are the factories and farms shut down when there are plenty of people to work them and the sun still shines? Why, it’s all just a fantastic illusion! We’ve been playing Monopoly with everything that is and pretending that the board game is reality! What a farce!”

        One can hope…

      2. Me

        I am so sick of hearing this. How many countries, that are much poorer and have much more outwardly oppressive governments, have active social movements? Last time I checked Bolivia was a very poor country and yet they have active social movements. Lots of children with no food in their bellies, lots of people involved in the movements that have hungry children. The labor leaders, the union organizers, the left wing social movements in the US a century ago were the same. The country was poorer then, the oppression just as bad if not worse and there were lots of hungry, poor people. Those people were politically active.

        Our country has no institutions that exist on a mass level that can fill the vacuum left by the retreating state. Unions are a shell of their former self, the left cannot bring itself to move away from a political party that could give two $hits about them or working people in general.

        There is simply nothing, on a mass level, that people can turn to. This is in part the fault of the left itself, and I say this as an ideological socialist. We have done a horrible job of organizing people, educating them about alternatives and rallying around coherent alternatives.
        Beyond that though, there has been a systematic failure.

        If you look at our society now, nothing works. The ideas those in power believe in are horrible failures. Not kinda bad, disasters. The institutions, from corporations, to government, the media and increasingly to unions have all failed, been corrupted or never really worked. People have no faith in any of these institutions.

        If we had a functioning democracy and if the left was an organized, coherent force those in power would be rightfully scared. The left however hasn’t rallied around alternatives and our democracy is now dead beyond repair, at least if you want to work within existing institutions.
        I have to say, IF there is any hope to change any of this, the first thing that needs to be done is the shattering of illusions. The first illusion to go down is that the Democratic Party can do a damn thing to change the system it has helped to corrupt. The Democratic Party is the graveyard for progressive social change. The second is that we can make some relatively moderate changes to the economic system and social relations. If you take into account the systematic problems of the economy and throw in the environment and ecological issues, there is no chance anything will change for the better without radical changes.

        Having said all of that, we haven’t even begun to shatter illusions and if you look at the way that Obama defenders, and before them Bush defenders, have an aversion to reality and the nature of their dear leader, I have little hope any of this will get better any time soon. The working and middle class people in both parties are out to lunch and THEY are bringing us down. Yes, those in power are corrupt crooks. Many of them should be in jail or pariahs. None the less, we still have a nominal democracy in place. Lindsay Graham had to get voted in by people, he didn’t just assume the position.

    2. different clue

      Could you recommend some good books and/or sites and/or links about permaculture methods for growing food?

      1. JGordon

        Yeah, I can actually. I’m in the process of writing an article about that in fact, which hopefully some kind souls will post. I am slow though.

        For a cheap (as in low cost but with good info) book to get you started have a look here:

        http://www.amazon.com/Gaias-Garden-Second-Edition-Permaculture/dp/1603580298/ref=sr_1_1?ie=UTF8&qid=1362043641&sr=8-1&keywords=gaia%27s+garden

        If you want to do an intense study of agroforestry, which should, uh, it’s kind of hard with how to put this, but agroforestry is sort of like the holy grail of permaculture studies, then these are the very heavy and very dense books you’ll want to start studying (they’re what I’m working my way through right now, and man are they good):

        http://www.amazon.com/Edible-Forest-Gardens-2-set/dp/1890132608/ref=sr_1_1?s=books&ie=UTF8&qid=1362043813&sr=1-1&keywords=edible+forest+gardens

        The permaculturish sites I’ve found around the internet are kind of disjointed and all have very basic information (without much in the way of context). But they are good as far as they go. Just use Google (or duck duck go as Yves suggests).

        If you want to go deeper into the subject, you’ll just have to take a permaculture design course I’m afraid. Seriously. But the benefit of that, along with the in-depth information there you’ll also form community connections with really interesting people (not to mention gain familiarity and facility with ways of living outside of the market economy–a surprising bonus most people wouldn’t be aware of).

        I suspect that a cheap design course would run you about a thousand dollars, although more expensive and elaborate ones could run you into the multiple thousands. You’ll have to do your own research on finding them though, unless you happen to live in the Florida Tampa Bay area. In that case I could offer you suggestions.

        1. different clue

          Good, and thanks. I have that Gaia’s Garden book so I am making a start on reading and thinking prep to doing maybe. Forest Gardens would be good for people in a position to do something about that. Certainly some people could set up a forest minigarden backyard.

      2. AbyNormal

        permaculture is growing on youtube video’s, which is a good for personalizing designs for location, time etc
        scroll thru:
        http://www.youtube.com/results?search_query=permaculture+this+week&oq=permacult&gs_l=youtube.1.5.0l10.360.729.0.12689.4.3.0.0.0.0.797.1801.4-1j1j1.3.0…0.0…1ac.1.FdE_cgkmzFg
        an introduction documentary
        http://dotsub.com/view/b3997f3e-8074-4e3b-918b-b61465375427

        here’s a site with a strong forum…offers video’s too
        http://www.permaculturenews.org/

  3. jake chase

    Very interesting from a legal perspective. Named plaintiffs probably lack standing, particularly as their deposits are FDIC insured. Yes, I know the FDIC is hopelessly insolvent but the fantasy of insurance remains, legally speakingwise.

    I was interested to know what attorney would file such a case. Federal judges and bar associations can be nasty sticklers about lawyers who file what they deem frivolous complaints. This filer seems to be a non lawyer. I forget what pro hoc vice actually means, but I seem to recall it’s Latin euphemism for serving as one’s own attorney (when lawyers do it it’s called having a fool for a client).

    Now before Lambert starts, I also know there is nothing frivolous about this shocking disregard of Congressional mandates, even if the Congress (and Barney too, while he was down there) is a collection of nitwit poseurs masquerading as scholars and statesmen, nearly all of whom are first and foremost corporate bagmen. I wonder how many of them even understand the ‘reform’ legislation which somehow oozed out as a public relations headslap at the banks (oh my God, Harry, we have to do something, lets just pass the ****ing thing and let OCC worry about it)?

    Should the legal case proceed nevertheless, the ideal legal defense might be that none of the individual defendants has been able to figure out what if anything should be done to implement a rule that none of them can even manage to wade through, not to mention the utter impossibility of their understanding it. We might imagine defendants’ oral argument along the following lines:

    Your Honor, our clients…that is I mean the banks.. tell us that implementation of the Volker Rule will end civilization as we know it, and more importantly that it will cost them money, without which compensating the hideously expensive but clearly indispensable executive talent necessary to keep the whole financial fantasy going would be quite impossible, because even faking asset values and fantasizing earnings and managing a far flung criminal enterprise with tentacles everywhere requires considerable financial dexterity, as anyone who has tried it will be among the first to admit, and where can this executive compensation money possibly come from without an even bigger addition to the Fed balance sheet, and how much more toxic drek can poor Ben possibly absorb, since even he hasn’t yet figured out how to reduce short rates below zero, although I suppose he could start charging people to keep money in banks like they used to do in Switzerland, although, unfortunately, most of the people who still have money (although most of those people don’t have very much money, indeed about 95% of them don’t have enough money to be anything other than an object of envy for those who have none) are old and decrepit (what is known euphemistically as retired) and physically incapable of doing anything even remotely resembling work, particularly since few of them ever did any work when they were younger, if you don’t count driving to offices and showing up at meetings, and moving paper from one side of the desk to the other, and answering the telephone, and saying ‘no’ and ‘I’m sorry for your inconvenience’?

    Allow me to point out, your Honor, that the Fed has already impoverished an entire generation of retired people with ZIRP as it is, and not only has our economy lost the effective demand previously created by the squandering on frivolous trinkets and idle pastimes of interest on their savings over a prudent if otherwise meaningless lifetime, but we now face the spectre of millions of retired golfers living in pricey gated communities but forced to abandon the links and take up welcoming shoppers at Walmart and other places even worse (if you can imagine any), and this, your Honor, will throw out of such work an equal number of minimum wage greeters who do not live in gated communities, or even over Mom’s garage or in their old room at home, most of whom are old and decrepit and otherwise useless themselves, and let’s not forget the cumulative snowball effect of this rolling unemployment on other workers, many of whom have very expensive college and university degrees the value of which now seems limited to a single nasty use for which, fortunately, a much cheaper alternative product is still available at every day low prices trumpeted day and night in all major markets, and…..

    1. Yves Smith Post author

      The person who filed the brief is most assuredly an attorney. Member of the New York bar, I believe. Also filed an amicus brief before the Supreme Court and an appellate court amicus on the Rakoff case, SEC v. Citigroup Capital Markets.

    2. Ms G

      Jake,

      Pro Hac Vice — admitted to be a lawyer on a case in a state different from the one you’re admitted in

      Pro Se — defending yourself w/o a lawyer

      just FYI (and not to be pendatic) :)

    3. diptherio

      Come on Jake…the very first line of the complaint reads, “plaintiffs, by and through their attorney Akshat Tewary…”

      From the Kamlesh Tewary P.C. website:

      Akshat Tewary focuses primarily on employment-based immigration, employment law and corporate law issues. Prior to joining the Law Offices, he served as an Associate at Kaye Scholer LLP, an international law firm with approximately 500 lawyers in nine offices around the world. At Kaye Scholer he was involved in sundry legal matters relating to antitrust, contracts, Internet practices, advertising, securitization, credit default swaps, and intellectual property. He also served various clients on a pro bono basis. Akshat is currently a member of the American Bar Association, the American Immigration Lawyers Association and the New Jersey State Bar Association. He is also qualified as a FINRA Arbitrator and has been recognized nationally as an advocate for banking reform. He has played basketball in college and professionally in India.

      1. jake chase

        Thanks to all for the above observations. My legal training is quite stale after 22 years of retirement, and I didn’t practice any more than absolutely necessary during the 25 years before that.

        I am not saying he did the wrong thing; not saying he did a bad job, either, but anyone who thinks this case gets past a motion to dismiss (or even a stern phone call from a court clerk) is barking up the wrong legal tree. In a state court, maybe. You can do almost anything in most of those. Federal courts are different. The judges have no sense of humor, as well as life tenure. But we’ll see.

        And don’t expect the State bar association to lie down for this, either. The next thing you know, they’ll be suing BHO for failure to live up to campaign promises, or Congressmen for taking bribes, or Agency Administrators for cashing out stock options while running the Treasury Department.

        IMHO, the named plaintiffs should have filed pro se.

    4. reslez

      You’re missing the point. They already know the case will be thrown out. The point is to demonstrate how corrupt the so-called regulators have become. And perhaps courts too, in this instance.

    5. Nathanael

      In actual fact, having FDIC-insured deposits gives the people filing the lawsuit standing against the FDIC. The corrupt courts may decide not to recognize this.

      1. Nathanael

        On top of that, it can’t be too hard to find someone with deposits over the FDIC insurance limit.

  4. Ms G

    Otpor? Isn’t this an organization that some believe is a CIA-funded fake “grass roots” org. that started in Serbia? Or is that just tin-foil “noise”?

    1. diptherio

      It has continued to demand free elections, the restoration of the rule of law, the annulment of repressive legislation and co-operation with the International War Crimes Tribunal for the Former Yugoslavia which has indicted, among others, President Milosevic.

      Otpor’s hardline opposition to the regime has carried with it an increasingly heavy price-tag.

      In recent months hundreds of activists have been detained by the police. Others have been beaten up by plain-clothes security personnel.

      The repressive measures have been accompanied with an official propaganda campaign that depicts Otpor as the shock-troops of Nato and Serbia’s other enemies that are allegedly bent on the country’s destruction. ~BBC

      That doesn’t sound like a CIA operation to me. I would imagine that that story comes from the Serbian PTB, much like the paranoid conservatives here are always warning of an imminent invasion by the UN.

  5. Chris Sturr

    I like this post–especially, as someone else said, the last paragraph. But am I missing something? Why is it “easy to dismiss this sort of undertaking as quixotic or agitprop”? (And why is “quixotic” linked to the Wikipedia page on mandamus? Is the implicit point that, as one commenter suggests, the plaintiffs lack standing?)

  6. JEHR

    Occupy the SEC is a wonderful group. It lifts one’s spirit to know there are young people out there who understand corruption/fraud AND fight against it.

  7. Susan the other

    What ever happened to cui tam lawsuits? Are they strictly criminal prosecutions? Can’t really sue the government, can we? What a catch 22. The government cannot sue itself. And we are the government. But not to worry, it will soon be taken over by Tony Scalia. Can you imagine what this SC could do with Dodd-Frank? I mean the Volcker Rule is so yesterday. We no longer need it because our society has evolved beyond the need for financial regulation.

  8. John Regan

    This is an example of just the kind of thing I think lawyers should be doing. It’s a well drafted and clear complaint. Very professional.

    But the judge will throw it out on the ground that the Plaintiffs do not have “standing”. And here’s the thing: the judge could get around that if he wanted to, and he routinely would get around something like that to favor the government or the bank or some other favored litigant. But he won’t do that here. He’ll regard this lawsuit as a pain in the ass and dismiss it as soon as he can.

    Until judges change, or are changed or replaced, bringing lawsuits will accomplish nothing.

    Meanwhile, Jamie Dimon continues to be invincible, and he obviously knows it:

    http://strikelawyer.wordpress.com/2013/02/28/insufferable-and-incorrigible/

    1. Nathanael

      The plaintiffs do have standing. If the court decides to make a bogus claim that they don’t have standing, well, that’s one more chink in the credibility of the court system.

      Eventually we may have to set up our own court system and find these corrupt judges guilty.

  9. kevinearick

    Tell me. Where in the Supreme Court Rules of Court does it say anything about merit. Either you complete the process, bypassing all the clerks trained to stop you or you do not. And when the Supreme Court “chooses” not to hear your case, it throws the evidence of it away, except for the copies it keeps for “other” purposes.

    It’s a lot like pre-med. Just get into the frat with all the answers given to it by the prof, or don’t and expect stupidity to close in all around you.

  10. steelhead23

    Two comments. First it is gratifying to see reference to Senator Merkley in the complaint. He is Oregon’s junior senator and from my perspective has done an admiral job of trying to rein in the Fed and TBTFs. Second, the cause for standing in the case seems a tad weak – based upon the plaintiffs holding accounts in affected banks. Those deposits are insured by FDIC and I believe it is accurate to say that FDIC-insured accounts have never lost money. Hence, the specter of potential injury seems a bit weak – particularly in light of the recent SCOTUS ruling on standing in the recent FISA case. On the other hand, the financial crisis of 2008 cost every U.S. citizen tens of thousands of dollars in bailouts. I suppose it might be tough to claim that we all have standing to protect us from prospective losses, I’m just suggesting that it is likely the government would attack the complaint on standing issues.

    But, so what. I am very glad the plaintiffs filed this complaint. It would also be gratifying if the Senate Banking Committee subpoenaed all of the defendants and grilled them under oath as to why they should not be charged with contempt of Congress. The transcripts from Merkley and Warren would make great reading. I suspect that these two have each other on speed dial right now.

  11. Tommy Strange

    Hey when I hit search, I just go to occupy site. Was looking for bailout review.
    anyway,
    These kinds of court actions are completely valid IMO. There is no militant left, and as another poster correctly stated. ‘we’ have not made a real bottom up socialist (and anarchist) mass organization. When we learn to let the people lead, with some leaders walking alongside (megaphones, and big minds really influencing us not deciding for us) …and actually do the hard work that needs to be done to make this happen, then all these ‘band aids’ and ‘actions’ are completely valid in this anarchist’s opinion. I have no time whatsoever for spectacle or holding up signs to mass murderers…have not for twenty years, but doesn’t mean I think the people doing are a joke. Peoples’ compassion and anger at injustice no matter how much it fails, is no cause for
    snarky or belittling comments. Now when people say a ‘third party’ is gonna drastically change things…..then ….you should bring on the scorn. Don’t promise anything, especially that working in such a corrupt system can somehow ‘change it’.

  12. TC

    Definitely not the sort of “Occupy” action I am inclined to dismiss. Furthermore, I doubt there’s widespread apathy in Beijing, and most definitely not in London, either. However, the question is are these with their massive investments in U.S. Treasury and agency securities bigger saps than the average American?

Comments are closed.