The Art of the Smoke Screen

The Securities and Exchange Commission along with frustrated and defrauded shareholders of Bank Of America (past and present) await a Federal Court's ruling on a $150 million consent judgment stemming from an investigation of B of A's multi-billion dollar losses and bonuses cover-up. The single issue being litigated: concealment. That's right. Despite heavy handed SEC regulations and the plethora of alleged "safeguards" in place, the B of A's of the financial world somehow forget to disclose material information to shareholders. What's material? How about $15 billion in losses. Marginal. Right?

But you see, one must understand the sophisticated circuitry of a publicly traded company's financial smokescreen (e.g. magic - now you see it, now you don't).
If B of A didn't:
1. hide $15 billion in losses,
2. fire their former general counsel Timothy Mayopoulos for advising against the Merrill merger,
3. hide 7-figure bonus checks, and
4. ask, beg, and steal for $20 billion palm-grease in bailout funds in January 2009 to mitigate losses from the Merrill transaction...
...how could they have possibly successfully dooped shareholders into voting for the merger??

You see, the smokescreen was all necessary, because $50 billion is a lot of money to pay for a failing publicly traded investment bank, never mind paying $50 Bils for the additional 1 -4 above. After all, that's $50 Billion in OUR money that subsidized a FAILED merger. :)

So what's the remedy? Independent disclosure counsel? Independent compensation counsel? I thought Sarbanes Oxley took care of that? I thought it already costs $3-5 million to setup compliance measures, and several million a year after that to maintain safeguards.

But I suppose justice will be served --B of A may actually have to pay [drum roll] $150 million to shareholders and the big bad SEC. This is a beautiful microcosm of a much larger grand deception. Now, who's in for some insider trading? Anybody?

SEC Complaint filed against Bank of America Corp.: http://www.nylj.com/nylawyer/adgifs/decisions/011310sec_complaint2.pdf

NY Attorney General Andrew Cuomo's Complaint filed against Bank of America for Concealment: http://www.nylj.com/nylawyer/adgifs/decisions/020510complaint.pdf

White Collar Black Market: Allen Stanford's $8B Fraud Scheme

If you haven't heard about this yet, it's likely you are still trying to figure out Mr. Madoff's grand scheme. That guy was a former NASDAQ Chairman, and another "trusted" member of our financial society. The new "Sir" is Allen Stanford. He's from the Bush homeland of TX, where the frauds are always bigger and better. Stanford is the Chairman of Stanford Financial and has managed to support the Mexican drug cartel, launder money through off-shore accounts, create false certificates of deposits, etc... BTW, Stanford has mysteriously disappeared. Just in time for a nice investigation. The irony.

These guys are well connected. Remarkably, Vice Prez's Joe Biden's son managed some interesting hedge funds marketed by Stanford's firm. Some of Stanford's directors held prominant positions. Two were financial regulators: Fredrick Fram and Lena Stinson. They were both at FINRA! [I wonder if they are also related to Madoff's FINRA family members? Like the ones he used to cover up his $50B ponzi scheme.]

So it's bad enough these guys continue to perpetuate fraud with innocent money. But even worse is the fact that people at the top of these schemes are politicians/elected officials/regulators that are supposed to protect our interests, right?. Wait, you mean centralized unchecked power yields corruption?

DO YOUR OWN RESEARCH AND SEE WHAT'S REALLY GOING ON.

References:
http://www.stanfordfinancial.com/sir_allen
http://www.huffingtonpost.com/2009/02/24/allen-stanford-had-links-_n_169361.html
http://www.reuters.com/article/allenStanford/idUSTRE51N5RO20090224