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Today's New York Times contains a potential blockbuster on the front page.  The Old Grey Lady has learned that the Justice Department has been investigating attempts to rig the London interbank offered rate for the past two years, and is now dotting the i's and crossing the t's on bringing charges of criminal fraud against several people involved in fiddling with that key interest rate.

The department’s criminal division is building cases against several financial institutions and their employees, including traders at Barclays, the British bank, according to government officials close to the case who spoke on the condition of anonymity because the investigation is continuing. The authorities expect to file charges against at least one bank later this year, one of the officials said.

The prospect of criminal cases is expected to rattle the banking world and provide a new impetus for financial institutions to settle with the authorities. The Justice Department investigation comes on top of private investor lawsuits and a sweeping regulatory inquiry led by the Commodity Futures Trading Commission. Collectively, the civil and criminal actions could cost the banking industry tens of billions of dollars.

In addition to Barclays, the DOJ reportedly has at least 10 major American banks, along with employees at those banks, in its crosshairs.  Justice has been working in conjunction with the Commodity Futures Trading Commission in what appears to be a classic slow-motion strangulation.  The CFTC began probing Barclays in 2008, and the DOJ joined it in 2010.

The investigation has dragged on in part because British authorities have been slow to conduct investigations on their end.  In order to get certain documents from overseas firms, the DOJ and CFTC need approval from British authorities--and that approval has been slow in coming.

Still, if I'm reading this story right, prosecutors are salivating at a chance to hold big banks accountable for not only fiddling with interest rates, but other misconduct during the financial crisis.  One official put it bluntly--"It's hard to imagine a bigger case than Libor."

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Comment Preferences

  •  This is good news, except it should be for several (6+ / 0-)

    hundred people, rather than just several. But, these table scraps are a start. Who knows, they might even coalesce into sticking the banks with some real criminal liability.

    I voted with my feet. Good Bye and Good Luck America!!

    by shann on Sun Jul 15, 2012 at 06:51:34 AM PDT

  •  But all will come to naught if W. Mitt wins. If (5+ / 0-)

    he wins, look for these cases to quietly go away with either no prosecutions or settlements of tiny value

    "Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity." --M. L. King "You can't fix stupid" --Ron White -6.00, -5.18

    by zenbassoon on Sun Jul 15, 2012 at 07:00:31 AM PDT

  •  DOJ + banksters + possible criminal charges (4+ / 0-)
    Recommended by:
    sfcouple, leu2500, emal, divineorder

    Waiting all these months and years to hear the above words all together...........

    Is it table scraps? Is it because it is an election year?

    It is at least a start to seeing some criminal action for financial crimes, instead of the small fines and no admission of liability that we have seen thus far.

    The prospect of criminal cases is expected to rattle the banking world and provide a new impetus for financial institutions to settle with the authorities.

    Daniel Ellsberg, “It was always a bad year to get out of Vietnam.”

    by allenjo on Sun Jul 15, 2012 at 07:00:36 AM PDT

    •  Right, sure feels that way to me. Perhaps this (1+ / 0-)
      Recommended by:
      allenjo

      will lead to a cascade of prosecutions that should have been done  much earlier?

      How did Supreme Court decision ACA help the 23 million still uncovered? Ask the 18,000 Doctors of PNHP -- they're not waiting, FORWARD now to pass H.R. 676, the “Expanded and Improved Medicare for All Act .

      by divineorder on Sun Jul 15, 2012 at 09:04:26 AM PDT

      [ Parent ]

  •  Really? (5+ / 0-)

    I will believe it when I see it. The DOJ has been totally missing in action when it comes to anything involving banks or corporate wrongdoing. There is always this big "we will do something", but the something is always "nothing".

    Holder is simply beholden to the elites. Look at his corporate/legal connections and it is no wonder than nothing happens.

    Obama's DOJ And Wall Street: Too Big For Jail?

    Over the past three years,  the Department of Justice has filed criminal charges against hundreds of ordinary Americans for financial fraud.  But no one from the largest banks and firms on Wall Street have been similarly charged for events leading up to the financial crisis.  Could that be because those banks are clients of the firms from which top DOJ officials hail?
    But it also undoubtedly has something to do with the fact that the top leadership at DOJ is drawn almost exclusively from White Collar Criminal Defense Practices at large firms that represent the very firms that Justice is supposed to be investigating. Covington and Burling,  the firm from which both Attorney General Eric Holder and Associate Attorney General and head of the criminal division Lanny Breuer hail, has as its current clients Goldman Sachs, Bank of America, JP Morgan, Wells Fargo, Citigroup, Deutsche Bank, ING, Morgan Stanley,  UBS,  and MF Global among others. Other top Justice officials have similar connections through their firms.

    Those who make peaceful revolution impossible will make violent revolution inevitable. - JFK

    by taonow on Sun Jul 15, 2012 at 07:02:39 AM PDT

    •  They'll find a couple of "fall guys", (2+ / 0-)
      Recommended by:
      divineorder, KenBee

      call them the "Bernie Madoffs of banking", and claim that everything (and everyone) else is "clean".

      You will not see the CEO, CFO or Chairman of the Board of Goldman, BofA, Chase or JP Morgan in jail . . . and the fines (if any) will be at most a couple years profits (and probably less).  There will be no "clawback" of bonuses or executive compensation, and no "civil forfiture" of the properties on which the crimes were committed.

      Penalties with teeth are reserved for Medical Marijuana Dispensaries . .

      Fake Left, Drive Right . . . not my idea of a Democrat . . .

      by Deward Hastings on Sun Jul 15, 2012 at 07:27:34 AM PDT

      [ Parent ]

    •  Almost felt this was just tossing a bone (1+ / 0-)
      Recommended by:
      divineorder

      To the masses...especially this quote here from the article

      The authorities expect to file charges against at least one bank later this year, one of the officials said.
      And further down you read it as UBS...Swiss bank. Will they be the scapegoat? The token fall guy?

      Of course I am happy to hear this and hope it is a start, but just feel as you...Words are cheap, actions are what I am waiting for here ...I too will believe it when I see it.

      There's way Too much political and regulatory capture from the banking industry to really get my hopes up.

      The Plutocratic States of America, the best government the top 1% and corporations can buy. We are the 99%-OWS.

      by emal on Sun Jul 15, 2012 at 07:30:52 AM PDT

      [ Parent ]

    •  you expect them to rush a case this big? (1+ / 0-)
      Recommended by:
      KenBee

      You do realise that any targets involved have piles of money with which to lawyer up? And that rushing a case against just a few risks not only fucking it up but also missing the opportunity to go after even more people?

      Perhaps you and the others bemoaning the DoJ's prudence simply watch too much tv.

      All things in the sky are pure to those who have no telescopes. – Charles Fort

      by subtropolis on Sun Jul 15, 2012 at 11:15:39 AM PDT

      [ Parent ]

      •  if the fix was in, rushing it would work (0+ / 0-)

        looks 'good' politically, cases reduced or dismissed later

        'we HAD to do something, it was an election year!'

        From those who live like leeches on the people's lives, We must take back our land again, America!...Langston Hughes

        by KenBee on Sun Jul 15, 2012 at 12:06:59 PM PDT

        [ Parent ]

  •  CFTC? Bwahaha. (1+ / 0-)
    Recommended by:
    divineorder

    I mean, it's great to see a government agency trying to do something.   But CFTC has been gutted beyond recognition.  Back when Brooksley Born was at CFTC trying to do something about unregulated swaps, Treasury and the Fed squashed her like a bug.

    Nowadays, honest Liberals are trying to get people like Elizabeth Warren elected, people who might actually do something about these crooks.  But nothing's going to happen with Tim Geithner at the controls.   I know, there are plenty of people around here outraged by his behaviour in all this... but Geithner was up to his neck in all this deregulatory crap and Obama's not going to shove him out.

    Let's put it this way, all the hue and cry over ACA?  Karen Ignagni looked Obama straight in the eye and told him she'd run a billion dollars of attack ads if he tried to get Single Payer enacted.  Obama blinked.  ACA was a Sunday School picnic compared what will come of any serious effort to regulate these multinational banks.  Geithner knew, Treasury has known for years.

    I'd love to be proven wrong on this.  I sure would.  But let's not kid ourselves here, LIBOR has been screwing American municipalities for years with the connivance of the Fed.    Save a little of your entirely-justified wrath for Tim Geithner and yes, for our president, who continues to employ this crook.

    People are usually more convinced by reasons they discovered themselves than by those found by others.

    by BlaiseP on Sun Jul 15, 2012 at 07:08:30 AM PDT

  •  Can this be real? (1+ / 0-)
    Recommended by:
    YucatanMan

    There has been essentially no criminal justice for the banks involved in destroying the economy.  I hope it comes to fruition.  

  •  It took a long time to restructure the DOJ (2+ / 0-)
    Recommended by:
    virginislandsguy, subtropolis

    after Ashcroft, Gonzales, Mukasey.  And it takes a long time to collect the evidence to file cases.  I am not surprised it took this long, especially with the UK reportedly stonewalling the investigation.  Hopefully, the evidence will lead to indictments, plea bargains, bigger fish, etc.

    There is enough on Earth for everybody's need, but not enough for everybody's greed. - M. Gandhi

    by Singing Lizard on Sun Jul 15, 2012 at 10:05:36 AM PDT

  •  Lots of noise about indictments before November (0+ / 0-)

    and then

    ..crickets?

    A leak to the Times that is politically useful, I'm sure there will be a careful investigation of how the leak happened.

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