World View: Australian Court Issues Landmark Judgment Against S&P Ratings Agency

This morning's key headlines from
  • Australia's court issues landmark judgment against S&P Ratings Agency
  • Cyprus denies that its bailout money will go to Russian oligarchs

Australia's court issues landmark judgment against S&P Ratings Agency

Regular readers of World View know how much I whine about the fact that not a single person has gone to jail for the financial crisis, despite a huge abundance of evidence of fraud and criminal activity by banks, because the regulators adamantly refuse to investigate and prosecute the criminal activity, since everyone in Washington depends on huge political contributions from banksters. As a result, the same banksters are free to continue to commit new types of fraud with no fear of prosecution. 

The only partial exception to the above is the two fines imposed against Barclays Bank, for criminal activity related to manipulation of Libor and electricity prices. (See "3-Nov-12 World View -- New charges put Barclays at center of climate change financial scam"

Barclays is a British bank, and the fines were imposed by American prosecuters. In my opinion, this has become possible because British politicians, rather than American politicians, receive political contributions from banksters.

Today we have a new illustration of this principle. Nobody in America or Europe has brought the ratings agency (S&P, Moodys, Fitch) to court despite massive evidence that they gave AAA ratings that were not deserved. (See "Financial Crisis Inquiry hearings provide 'smoking gun' evidence of widespread criminal fraud" from 2010.) 

But on Monday an Australian Federal Court issued a judgment against Standard & Poors Ratings Agency essentially for being at best completely incompetent and at worst criminals. In order for the banksters to make their securities fraud work, they needed the cooperation of the ratings agency to give the fraudulent securities AAA ratings. The court found that S&P used fraudulent assumptions and invalid data to arrive at the AAA ratings for synthetic securities issued by the Dutch bank ABN Amro. The court found that the ratings agency and the bank essentially cooperated to defraud investors.

None of this would have mattered, since we all know that prosecuters don't want to prosecute banks and ratings agencies that give enormous sums of money to politicians.

But here the two companies made a huge mistake: They defrauded 12 Australian municipal funds. In other words, innocent townspeople in Australia were defrauded by a bank in Holland and a ratings agency in the United States, with investment losses on the AAA securities amounting to $16.6 million. It doesn't take much to see why they were brought to court.

All the news stories on this ruling emphasize that, unless S&P appeals and wins the appeal, this decision has implications far beyond one case. It will open the doors to similar litigation in Europe and North America.

The amount of money that S&P and ABN Amro will have to pay is just a fraction of the large sums that they made through their criminal activities. Unfortunately, no one is yet threatened with jail. Reuters and Bloomberg and Quartz and Federal Court of Australia

Cyprus denies that its bailout money will go to Russian oligarchs

Cyprus is still negotiating the 10 billion euro bailout it's going to need to keep from going bankrupt, after years of purchasing billions of euros in Greek government bonds that have turned out to be practically worthless. However, a report in Der Spiegel says that any bailout money for Cyprus will immediately go into the pockets of Russian oligarchs who use Cyprus to launder money from illegal activities in Russia. However, Cyprus' government on Monday dismissed the report, saying that was an attempt to sully the country's reputation as an international investment center. Spiegel and AP 

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