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

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 factthat not a single person has gone to jail for the financial crisis,despite a huge abundance of evidence of fraud and criminal activity bybanks, because the regulators adamantly refuse to investigate andprosecute the criminal activity, since everyone in Washington dependson huge political contributions from banksters. As a result, the samebanksters are free to continue to commit new types of fraud with nofear of prosecution. 

The only partial exception to the above is the two fines imposedagainst Barclays Bank, for criminal activity related to manipulationof 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 Americanprosecuters. In my opinion, this has become possible because Britishpoliticians, rather than American politicians, receive politicalcontributions from banksters.

Today we have a new illustration of this principle. Nobody in Americaor Europe has brought the ratings agency (S&P, Moodys, Fitch) to courtdespite massive evidence that they gave AAA ratings that were notdeserved. (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 againstStandard & Poors Ratings Agency essentially for being at bestcompletely incompetent and at worst criminals. In order for thebanksters to make their securities fraud work, they needed thecooperation of the ratings agency to give the fraudulent securitiesAAA ratings. The court found that S&P used fraudulent assumptions andinvalid data to arrive at the AAA ratings for synthetic securitiesissued by the Dutch bank ABN Amro. The court found that the ratingsagency and the bank essentially cooperated to defraud investors.

None of this would have mattered, since we all know that prosecuters don’twant to prosecute banks and ratings agencies that give enormous sums ofmoney to politicians.

But here the two companies made a huge mistake: They defrauded 12Australian municipal funds. In other words, innocent townspeople in Australiawere 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 winsthe appeal, this decision has implications far beyond one case. It will openthe 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 afraction of the large sums that they made through their criminalactivities. 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 toneed to keep from going bankrupt, after years of purchasing billionsof euros in Greek government bonds that have turned out to bepractically worthless. However, a report in Der Spiegel says that anybailout money for Cyprus will immediately go into the pockets ofRussian oligarchs who use Cyprus to launder money from illegalactivities in Russia. However, Cyprus’ government on Monday dismissedthe report, saying that was an attempt to sully the country’sreputation as an international investment center. Spiegel and AP 

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