- Federal judge refuses to dismiss suit against prosecutor Preet Bharara, FBI agents by hedge funder David Ganek over treatment in now-dismissed Chiasson inside trading case [Peter Henning, New York Times “DealBook”; Business Insider] SEC agrees to return $21.5 million extracted from Ganek’s Level Global Investors [BNA via Ira Stoll]
- CFPB follies: “Government-Directed Lending Comes to America” [Ike Brannon, Cato] Agency casts its eye on marketplace, otherwise known as peer-to-peer, lending [Thaya Brook Knight, Cato]
- SEC inspector general sides with agency against allegations of undue sway over ALJs [Reuters, earlier here, here, etc.]
- Third party liability for crime: “HSBC Sued Over Drug Cartel Murders After Laundering Probe” [Bloomberg]
- Former Ally Bank CEO: administration extorted race-lending settlement by threatening to derail regulatory approvals [Paul Sperry/New York Post, more]
- Bellevue, Wash.: $213,000 award to complainant Leticia Lucero “could mean other cases where homeowners argue lenders [cause] emotional distress during negotiations.” [AP/Yakima Herald]
Posts Tagged ‘banks’
Lyndon McLellan, target of structuring/forfeiture case, beats IRS
We covered this case last year:
…despite the U.S. Department of Justice’s promise to stop seizing bank accounts in future in cases where violations of laws against bank deposit “structuring” (keeping them under the $10,000 reporting threshold) are not connected with any underlying crime, it continues to hold on to money already in the seizure pipeline. That includes the $107,000 grabbed from Lyndon McLellan, who runs L&M Convenience Mart in rural North Carolina, according to the New York Times. “You work for something for 13, 14 years, and they take it in 13, 14 minutes.”
To make matters worse, a “prosecutor wrote menacingly to McLellan’s lawyer about the publicity the case had been getting,” warning that press attention “ratchets up feelings within the agency.”
In June of last year the IRS agreed to drop the charges and return McLellan’s money, and now a federal judge has told the agency to pay the store owner $20,000 for his legal costs, according to my Cato colleague Adam Bates, who has other links and thoughts on the case: “If the government cannot prove beyond a reasonable doubt that a person engaged in criminal activity, it should not be able to punish them as if they’re guilty.”
Banking and finance roundup
- “The business model of Wall Street is fraud” line is, well, vintage B.S. (that’s Bernie Sanders to you) [Steve Chapman/Chicago Tribune, Bret Stephens/WSJ. More: “Sorry Bernie, Wall Street Wasn’t Deregulated Pre-Crash” [Jared Meyer, Forbes]
- Auto lender shakedowns by Obama CFPB and DoJ continue, latest is Toyota for $21.9 million [WSJ] “Obama bullied bank to pay racial settlement without proof: report” [Paul Sperry, New York Post]
- Delaware Chancery Court takes step toward countering plaintiff lawyers who sue on almost every deal, still has many miles to go [Ronald Barusch, WSJ “Dealpolitik”]
- New York Times endorses financial transactions tax with unconvincing regulatory rationale [Peter Van Doren/Cato, earlier]
- California insurance commissioner pushes politicized investing, which can actually complicate solvency risk by harming portfolio diversification [Business Insider]
- “Smaller community banks appear to have a valid concern that their compliance burden is rising and the playing field is becoming more uneven” [Preston Ash, Christoffer Koch and Thomas Siems, Dallas Fed via Kevin Funnell] Marshall Lux/Robert Greene study ties trend to Dodd-Frank law [Harvard Kennedy School via Todd Zywicki]
- Laws against money laundering hurt more good guys than bad guys, latest installment [Jeff Miron, Cato]
Law enforcement for profit roundup
- Montgomery County, Maryland officials help plant letters praising speed cameras in local papers [The Newspaper] “Chicago issued $2.4 million in bogus traffic tickets from speed cameras” [David Kravets, ArsTechnica citing David Kidwell and Abraham Epton, Chicago Tribune]
- “DEA Promised TSA Agent a Cut of Passengers’ Seizable Cash” [Jacob Sullum, Reason]
- “Cops Seized Over $107,000 From Couple; Didn’t Charge Them With A Crime” [Rock Island, Ill.; Amy Alkon citing Quad Cities Dispatch-Argus]
- I was among those speaking at an Annapolis event unveiling a new bill to restrain and better control asset forfeiture [Frederick News-Post, WBAL, Scott Shackford/Reason, Grant Zeigenfuse/Maryland Reporter; earlier on South Mountain Creamery case; more on margarita machines as forfeiture perk]
- Texas: “Cops Getting Free License Plate Readers In Exchange For 25% Of The ‘Take’ And All The Driver Data Vigilant” [Tim Cushing, TechDirt]
- Cato podcast on asset forfeiture with Adam Bates. More: What the President should do;
- How does Manhattan District Attorney Cy Vance spend his $800 million slush fund from bank settlements? Any way he pleases? [Scott Greenfield]
Banking and finance roundup
- Bernie Sanders still rants and raves about Glass-Steagall Act. Who will break the news to him? [Catherine Rampell/WaPo, P.M. Carpenter (Krugman, Pearlstein in accord with Rampell), earlier] “Hillary Clinton vows to go ‘well beyond’ Dodd-Frank” [Housing Wire via Kevin Funnell]
- “In the past, ‘financial institutions were unwilling, for relationship reasons, to litigate against each other…That has changed dramatically.'” [Daniel Fisher quoting New York attorney Brian Fraser]
- “Government Thinks You’re Too Dumb To Try Crowdfunding” [Ben Weingarten, The Federalist]
- “If every bank behaved like Abacus, the financial crisis wouldn’t have occurred.” So guess which bank got prosecuted [Jiayang Fan, The New Yorker back in October]
- Billions in free money for consumers, just by regulating credit card fees! Sorry, it’s not that simple [Todd Zywicki]
- “The war against cash”: government vs. the cash economy [Daniel Mitchell, Cato, first and second post]
- New IRS authority to secure revocation of passports should give pause to everyone concerned about American liberty [Investors Business Daily]
Banking and finance roundup
- Trying to buy gift cards in bulk as an employee bonus, Coyote discovers anew that the government hates cash;
- Initial public offerings are drooping again, regulation one reason [Thaya Knight, Cato]
- A dissent from the lamentations, here and elsewhere, on the decline of small community banks [Ira Stoll] “Fed’s Tarullo says looking into smaller banks’ concerns” [Business Insider]
- Berned out? Financial transactions tax “one of the more overrated ideas in American Progressive political discourse” [Tyler Cowen, Wikipedia on Sweden’s experience via @aClassicLiberal on Twitter] And Sen. Sanders continues to express incredulity on Twitter about college loans’ carrying higher interest than home mortgages do, despite attempts to enlighten him on the whole topic of secured lending and collateral [@tedfrank]
- Video of Federalist Society convention panel on constitutionality of administrative law judges at SEC and elsewhere with John S. Baker, Jr., Stephen Crimmins, Todd Pettys, Tuan Samahon, moderated by F. Scott Kieff;
- Consumer Financial Protection Bureau ban on contractual arbitration will help class action lawyers, few others [Todd Zywicki, Mercatus]
- “How US policies to stop terrorist financing end up hurting innocent families abroad” [Dylan Matthews, Vox] Money laundering regs, “de-risking” result in many bank closures in U.S.-Mexico border areas, hassles result for local residents and businesses [Kevin Funnell]
Here comes the fantasy-sports litigation
Game of skill, or game of chance? “The [class-action] suit, filed in Manhattan federal court on behalf of FanDuel and DraftKings players nationwide, accuses Visa, MasterCard, American Express and other defendants of participating in a racketeering scheme to facilitate illegal gambling operations.” [Alison Frankel, Reuters]
Community banker: it’s better in the U.K. at this point
“When I went to Britain I thought the regulatory environment would be much worse,” he says. “It’s infinitely better there,” says Vernon Hill, who headed for the U.K. after a career in the community bank sector in the United States. The founding of new banks has fallen virtually to zero in the U.S. since the enactment of Dodd-Frank [Stephen Moore, W$J via Kevin Funnell]
Banking and finance roundup
- Robert Litan in Fortune on why Elizabeth Warren went after him;
- “Economists have no idea how to measure the value created by the financial sector.” [Arnold Kling]
- W$J at end of August had an investigative report on the (opaque, high-discretion, unaccountable) system of installing “monitors” in banks and other financial institutions to settle civil or criminal charges;
- Update: in a sidebar to my City Journal piece on New York Attorney General Eric Schneiderman this summer, I covered his charges of “redlining” against small upstate banks that did not operate in inner cities; now Schneiderman has extracted $825,000 from a Buffalo bank [NY AG press release]
- No kangaroo courts at the SEC, please [Bloomberg View editorial on in-house adjudicators, earlier here, etc.]
- How the FATCA law, deplored in this space for years, makes life hard for U.S. expatriates/spouses [Colleen Graffy, WSJ]
- “Except for the ten to twelve million people who use them every year, just about everybody hates payday loans.” [New York Fed “Liberty Street Economics” via Tabarrok] Despite reports of FDIC back-off, Operation Choke Point controversy not over [Ballard Spahr via Kevin Funnell]
We’re from the government and we’re here to help, part 726,914
The Consumer Financial Protection Bureau (CFPB)’s campaign against disparate impact in car loans is raising costs for some borrowers. Thanks, Sen. Warren! “The results highlight the sometimes unpredictable consequences of attempts to regulate lending practices…. Efforts by the CFPB to police the fairness of auto loans have accelerated in recent years under Director Richard Cordray.” [Morningstar/Dow Jones, W$J]