Category Archives: Ridiculously obvious scams

Rolling Jubilee: A Wolf in Sheep’s Clothing?

Yves here. As much as we we’ve been vocal supporters of many of the initiatives of the Occupy Wall Street movement, such as the excellent work of Occupy the SEC, the impressive relief efforts of Occupy Sandy, the success of local Occupy Homes groups in combatting foreclosures, the many projects of the Alternative Banking Group (including both a book explaining the crisis and its 52 Shades of Greed card deck, and last but not least, Strike Debt’s Debt Resistors’ Operations Manual.

However, Rolling Jubilee is a notable exception.

Another Private Equity Scam: Clawback Language Does Not Work As Advertised

As the SEC, reporters, and analysts dig into the operations of private equity firms, it is becoming obvious that one of the reasons that these financiers have cornered the best legal talent in America is for the express purpose of better fleecing their investors.

A prime example comes up in the use of clawbacks in private equity agreements.

New Zealand: How Crooks’ Buddies at WhaleOil Bounced Out the Chief of the Serious Fraud Office, and More

New Zealand: a tangled writhing heap of politicians on the make, spin merchants on commission, journalists looking for copy, chattering policemen, and bloggers on a sort of nihilistic spree. Like everywhere else.

Pump and Dump: How to Rig the Entire IPO Market with just $20 Million

How much does it cost to manipulate an entire market? Not much. And it’s getting cheaper!

It was leaked on Tuesday by “people with knowledge of that matter,” according to the Wall Street Journal, that VC firm Kleiner Perkins Caufield & Byers had decided in May to plow up to $20 million into message-app maker Snapchat, for a tiny portion of ownership. An undisclosed investor also committed some funds. The deal, which apparently hasn’t closed yet, would give Snapchat a valuation of $10 billion.

New Zealand Companies Office’s $612Mn Money-Laundering Snooze

The Organised Crime and Corruption Reporting Project recently (21st August) published one of their periodic investigations, concerning a rather large moneylaundering scheme: Call it the Laundromat. It’s a complex system for laundering more than $20 billion in Russian money stolen from the government by corrupt politicians or earned through organized crime activity. It was designed to not only […]

New Jersey Funneling Pension Fund Cash to Wall Street Investment Managers

David Sirota has carved out a much-needed niche lately by poking around in the unseemly deals between public pension funds and Wall Street predators, and he brings yet another scoop, this time in New Jersey:

Burger King the Latest to Jump on the Corporate Tax Inversion Bandwagon

A number of corporations have engaged in corporate tax “inversions” this year, which typically involves a large U.S. company merging with a smaller counterpart in a lower-tax country abroad, then moving the corporate billing address to the lower-tax country to reduce the overall tax burden. The actual headquarters and the executives go nowhere, but the nominal address changes so the company can avoid U.S. tax rates. A number of corporations in the pharmaceutical space have pulled this off in 2014, but it took the drugstore giant Walgreen to flirt with the idea (through a merger with the Swiss company Alliance Boots) for the non-financial press and the public to really catch on. Outcry actually stopped Walgreen from going through with the inversion; they merged with Alliance Boots, but kept their headquarters in the U.S. Clearly, it was easier to rally public scrutiny to a consumer-facing brand attempting to skip out on America while still using the public resources afforded any company selling their wares here.

Now, the same coalition that stopped the Walgreen inversion will get another chance with Burger King:

How Much of a Short Position Did Paul Singer Take in Argentina? And Who Were the Bagholders?

With the Argentine default, we are seeing a replay of a strategy that established Naked Capitalism readers will remember from the crisis: use a complex structure to disguise risk so that short sellers can place their wagers at far lower prices than they would be able to otherwise. And that raises the interesting question of how large a net short position Paul Singer, the instigator of the litigation that has undone Argentina’s restructuring deal and put the country in default, took against Argentina, as well as the relationship among the parties that put on the positions on behalf of short sellers.

New York Fed Worried About Gambling in Casablanca, Um, Ethics Problem at Big Banks

This story would be funny if it weren’t so pathetic. Yesterday, the Financial Times reported that the New York Fed woke up out of its usual slumber and realized that the crisis has changed nothing and that banks still ~~are in the business of looting~~ have unaddressed ethics issues.

Financial Predators Move On From Foreclosure Rescue, Enter Student Debt, Military Lending Spaces

At one level, a crackdown on foreclosure rescue scams and not the overarching mortgage and foreclosure fraud is like letting the arsonist who set fire to the house go while busting the guy who took five bucks off the dresser before the house started to burn. Nevertheless, these scams do represent some of the worst elements of our society, featuring the kind of people who see suffering and vulnerability and think about dollar signs. One of my first entrees into this world of foreclosure nightmares was through a friend who had fallen behind on his payments, and then paid somebody up-front money to help him secure a loan modification. That person did nothing to help and then skipped town with the cash.

So it’s good to see CFPB finally take a crack at this, in conjunction with the Federal Trade Commission and 15 states.

Cigna: Crapification or Insurance Fraud?

We’ve been slowly working toward a theory of crapification and if we manage to sort it out, we might even develop a school of craopnomics. But in reality, Corporate America presumably already has that well codified but has yet to release the playbook to the great unwashed masses.

As much as I am of two minds about sharing personal anecdotes with readers, my recent experiences with the health insurer Cigna amount to several case studies in crapification in one nasty package. Moreover, since the American health care policy is to force even more Americans into the health insurance regime and call it “health care,” I thought my tale might elicit similar accounts from readers, as well as input from people who’ve worked in the insurance industry as to how much of what I am experiencing is incompetence versus design.

Fed Hubris: Central Bank Ignores That It is on Thin Political Ice

A shot across the Fed’s bow from Simon Johnson, former IMF chief economist and bank critic, on the surface looks to be a good bit of news. Johnson, in a recent Project Syndicate article, warns that the notoriously cloistered central bank is overly confident about its political position.

Maine Supreme Court Hands Major Defeat to MERS Mortgage Registry

Yesterday, we wrote about a major loss by the electronic mortgage registry, MERS, in a major Federal court case in Pennsylvania. MERS suffered an additional blow via an important adverse decision in the Maine Supreme Court, against Tom Cox, the attorney who first made robosigning a national issue.

Bill Black: Obama’s Latest Betrayal in Favor of the Big Banks: TISA

Yves here. I’ve taken the liberty of editing down Bill Black’s post slightly to bring readers more quickly to his correctly outraged discussion of the latest Wikileaks expose on a trade deal that has managed to go completely under the radar: the Trade in Services Agreement, otherwise known as TISA. We wrote about this troubling news when the story broke. Astonishingly, the mainstream media has taken no notice of this release. Black’s discussion is accessible to lay readers, and I hope you’ll circulate it in the interest of raising awareness of how the Administration intends to sell out the US to banks, Big Pharma, and other multinationals.

Black explains how TISA is designed to replicate, indeed, optimize the criminogenic environment that made fraudulent financial CEOs wealthy by “looting” “their” banks.

Buying Health Insurance: A Pig in a Poke

You’d never buy a house if you couldn’t look at the interior first, or if the price might double after you signed the contract. But health insurance….