i'm out here watching aren't you live from moscow these are the headlines a ravenous appetite for security the world's biggest five days draws a marathon of protests over fears it could contribute to a new arms race seen since the cold war. ceasefire crossfire u.n. monitors in syria and for a look come under a barrage of bullets with both the opposition and the regime trading to blame while influential rebel backers prepare to lower the oxen you sanctions on us attack. and an ugly tran the u.s. newspaper shows pictures of soldiers posing with bodies of limbs of data afghans the latest in a string of similar violations emerging monthly and since the start of the year.

and of next artie's cause a report exposes the fraud and scandal behind the world's top financial had lines. kaiser this is the kaiser report so goldman sachs caught breaking the law again stacy herbert max kaiser indeed s.e.c. fines goldman sachs twenty two million dollars over. the securities and exchange commission on thursday fined goldman sachs group twenty two million dollars over allegations that the wall street bank didn't how policies to prevent analysts from sharing nonpublic information to the firm's traders the exchanges took place and weekly huddles where goldman's research analysts met to provide their best trading ideas to the firm's traders and later passed them on to

a select group of top clients the f.c.c. said well yeah a lawyer called glass steagall was present prevented this exact thing from going on the communication between the analysts of the bankers within the organization and this was there after the glass crash and depression in america and they pass some laws to try to keep these groups from talking to each other but now goldman has formalized their fraud with this weekly huddle that they get together it shows the the huddle is like a football huddle because the blankfein likes to touch the little guys but behind so i think is what the main objective of the sort of organ of this meeting well in fact you said it was a crime but this is a fine pang so i think the f.c.c. is actually treating it like it was cottle's that went a little bit wrong i mean this is their mollycoddling peg well what happens when cuddles turn into something more than that you say and you know they should sign

when you join one of these firms very strict rules and regulations about getting a little bit too cuddly but so they have to be careful that they're just whispering a little nonchalance so and so's and see each other. cares about so and so being bought and sold it's called inside information isn't and they've they've created a weekly meeting it was a called inside information meeting yeah exactly ok they're trading information back and forth with their the between the bank and the analysts and the traders what's not supposed to do and they claim all the time they're not doing and they're claiming we don't need any more regulation we don't need a restoration of glass steagall because we don't do this we're perfect guys and if we do we'll pay our for the crime right that but they're paying just a small fine twenty two million dollars how much does that represent of their profits it represents six months bill it sparks steakhouse basically is what it amounts to get whacked and one of these times are going to get whacked if they keep doing this so max in two thousand and seven according to the f.c.c. the new york investment giant began a program known as

a symmetric service initiative where analysts shared information and trading ideas for meetings with some investor clients yeah asymmetric warfare exactly there's the asymmetry here is that the clients are getting hammered their clients are getting royally screwed the insiders at goldman and their privileged clients to make money trying to get inside information by lobbyists and by congressmen to pass laws to make it easier to read inside information those filling the end of all the weekly asymmetry information meeting with even more grist for their insider trading marketplace mill that they used to pot line their pockets i'm told that they're lucky not to be down at stark's inappropriate oh that's where gangsters hung out in the seventy's and eighty's and these are the new gangsters of new york now they said the f.c.c. said these meetings these so-called huddles these little cuddles blankfein steam happened between two thousand and six and two thousand and eleven they do leave out

max a very important huddle or several huddles between lloyd blankfein his traders and their analysts and certainly. treasury secretary who would that be max go. paulson i mean you go to the two thousand and eight period we find out later that call sin thanks to a whole with the insiders on wall street told folks that the government was going to bailing out these institutions printing money to do so the banks all tripled in quadruple during that period of time based on all between thank paulson congress and wall street and billions of dollars were siphoned out of the economy and put into the pockets of few folks who used most of that money to pass laws to make it easier to commit the same crimes over and over again yes those hurdles you were talking about with hank paulson they were actually involved he met with these bankers from goldman sachs he met with hedge funders who used to be at goldman sachs we told them despite going in front of congress and telling congress. we will

not bail out fannie mae and freddie mac. they will not be put into receivership into conservatorship and in fact he was telling them that we're going to do it so you cannot this is our little huddle our little cult yeah i won't but that's exactly right and this is a one of the most blatant examples of really this modern crypto engineer financial fascism when you've got the hank paulson's in the revolving door between wall street in washington trading on inside information leading to this amalgam of fraud and poisoning the waters of our financial system and causing widespread austerity despair discussed outrage pre-revolution womack's you bring up the word fraud and according to joseph devore an attorney at cozen o'connor in new york and a former assistant regional director and the f.c.c. s new york office he said the fine was not in consequential for a settlement that involves technical violations of internal policies and procedures

so that's the sea bass that's the technical violation it's about that's that's i'm talking about technically they need to take the money that they make and training us inside information to go and pass laws to eliminate each subsequent technical aspect of the laws that were there to stop this violation of these chinese wall conversations from happening to begin with so when you replace the word law when you hear the word technical no matter what they do if lloyd blankfein came into this room stabbed you multiple times live here on camera it would be a technical violation of knife laws. exactly this is technically he was a violation of the no knife into the lunchroom a lot the fact that there is a pool of blood underneath the t.v. presenter is really not to be focused on at this time because technically he's not violating anything of substance so he can. lawk weather is it's completely rob ing

the end of global customers and having the us bail them out is ok because he was wearing using the right fork at lunch and so finally on this goldman sachs story this guy joseph devore the former f.c.c. guy he says that it makes sense that the commission was able to negotiate a penalty settlement over four times the two thousand and three panel for the saddle meant so yes goldman sachs already paid a penalty in two thousand and three for this exact same practical my aleisha but they have more leverage now because of the financial collapse to plead with goldman sachs to pay a little bit more money this time around here pollute a little ball money for your law breaking in your group little behavior please go to those who do school good reviews what if you could use. poor bureaucrats to do most government but you know this is outrageous that the f.c.c. is begging goldman to to write up the fine if they're comfortable with yeah it's

sort of actually you know saying you know what you guys are shameless lawbreaking thug banks are scum and how about we bring it out of sparks and back here you know i love these chinese banks who give you know they take the breakers out back and like to kill them that's a deterrent death is a deterrent now speaking of technical violations we have some more technical violations from another big day you and me you kill me over here did took the girl violations were you prepared to go boots i don't need the technical violation of the note so this approach of the goods ok if i could park anywhere on was the little boy you know what is bucktown i don't give a hoot back good that's me i don't need ok i don't want to well these are technical violations from the other big. on the street who's a pretty good group bob. cole sued look good for over good. good good little j.p. morgan stanley guy with a god he's the shiksa of the. this is like

a little blood there the. dollar j.p. morgan said to transform treasury to prop trading this is again brings us back to glass deagle j.p. morgan chase and company chief executive officer jamie dimon has transformed the bank's chief investment office in the past five years increasing the size and risk of its speculative bets according to five former executives with direct knowledge of the changes achilles machree hired in two thousand and six as the chief investment officer as top executive in london led an expansion into corporate and mortgage debt investments with a mandate to generate profits for the new york based bank three of the former employees said diamond fifty six closely supervised the shift from the c.i.s. previous focus on protecting j.p. morgan from risks inherent in its banking business such as interest rates and currency movements. oh or do we begin first of all they said they're increasing the size and the risk yes by a triple that they tripled it we're living in an era of the too big to fail banks

acting like purana eating our everyone's lunch so here's a guy name ecus purity prerelease a killie's mattress. achilles mattress pillars of miraculous comes into the into the coliseum with a plan to transform yet another market into an over secured toxic waste dump the jamie dunn is going to extract these from well max some of macro says bets are now so large that j.p. morgan probably can't online them without losing money or roiling financial markets the former executive said based on knowledge gleaned from people inside the bank and dealers at other firms bruno excel another london based trader in mattresses group gained attention last week after moving markets with his trades drawn comparisons to federal reserve chairman ben s. bernanke use power in the government bond market where briganti is to the treasury market excell is to the derivatives market but they're too big to unwind right

without tossing massive financial disruption did they get too big unwind by accident no that's the idea we get too big to unwind on purpose so that we don't need to on wind because this is a scheme where we are out there extract ing rant from everybody who is even tangentially connected to this economy they must go through this interest rate scheme perpetuated by the bernanke and the j.p. morgans of the world and the costs are rising and they end up suffering and these guys are mafioso they're the mafioso well you mentioned mafioso so let's turn to this further information about this story where the cia is growing size and market power have made it an increasingly important customer to wall street trading desk in a market influenced by heads. loans and other investors the former employee said excell positions in credit derivatives have become so large that some market participants

dubbed him baltimore after the villain of the harry potter series who is so powerful he can't be called by name this is not good when you have bankers who people are afraid to mention their name yet and who brings us back to that first story about goldman sachs the s.e.c. is afraid to mention goldman sachs is crimes by name so it's called a technical violation please don't tell us lloyd blankfein i so saw idea that too big to fail is a problem so we need to rein in we need great granddad we need to bring in the volcker rule we need to bring in new legislation we need to have a elizabeth warren do it type table dance for a couple of congressmen down of sparks in d.c. you know to try to stop all this was a complete farce because it got much bigger they've gotten much worse both things going completely out of control say sarah thanks so much for being on the kaiser report thank you max dugway much more coming away so stay right there.

will be. science technology innovation all the least of elements from around russia we've gone to the future coverage. something. lies beneath. thousands of teachers police control. the lovers. for many. but dangerous even to those who keep it to distance. he's. the one. i am asked as are welcome back to the kaiser

report special in studio guest that i beat that welcome to the kaiser report it's great to see you and course reading all your stuff in the rolling stone and first of all chris a quick question i mean you're writing all these stories about banks and and what's going on on wall street but are you writing about finance or are you writing about about crime stories basically it's funny the winds have gotten so blurred it's basically an organized crime story and that's really that's what i'm trying to do legally is just convince readers that it's not really a you canonic story or a finite story it's organized crime there's no difference at all yeah i mean there's a language that people use the bankers it sounds self i flew in the right the full swaps and derivatives and collateralized debt obligations but they could just as well be talking about you know whack a guy behind a dumpster at sparks total essentially it's the same thing so you write gangster banks keep winning public business they're that in the business of doing the business of the public in essence and they even though they're clearly violating

the law they're continuing to get these contracts that tells about yeah this is an example where it's exactly like the old mafia business in the old days we had a municipal bid rigging and it was a mafia group that would prey upon some local municipality and two different mafia groups would divide up between each other which tear which town they got to service their garbage who got the service the laundry here who got to do this and that the cement the construction and that's exactly what we have with modern. investment banking all these investment banks have essentially divided up their territory they are artificially lowering their bids for investment banking business so a town goes out and it wants to issue a bond and all the banks all of them will suspect bank of america chase they're all colluding to submit artificially low. kids and everybody's losing out and it's exactly the same activity that we had with mafia groups it's just that it happens

to be bonds that are garbage well junk bonds as they're called. which runs right exactly so now another interesting aspect of this is that they know the mob has gone global right wall street mob and you see in casino italy there's a big story race of ray and other and you've covered this extensively so it couple highlights there again given that global the globalization of this absolutely the that's one of the problems with prosecuting this kind of crime is that it's it's so . it's so cross territorial and jury across jurisdictional that there is no one law enforcement body that can really aggressively prosecute this kind of crime and they also have a tendency to go. regulatory shopping essentially a bit if they seek out the areas where the regulations of the weakest are the regulators who are the weakest and that's where they will base their operations but the laws are are less powerful so it's very very hard to nail them down for things like the swap manipulations or the really big story i think this is that it this

year is the manipulation of libel for which is the new burgeoning case that's coming out and nobody really knows where they're going to prosecute that case yeah that story and i don't know if you follow this one or not but bank of new york was caught and multi-trillion dollar custodian business for pensions and and what not they were stepping in front of all the trading the form of stroke running for explorer and just scalping the pennies billions and billions and now they're saying oh we're not sure we can prosecute that story it's like office space that movie it is exactly one period of time but you do it a million times right now that's an interesting rolling stone of course is a pop culture magazine and it got back to the hunter s. thompson days and the coverage of the politics of the sixty's and the nixon and there you are you're in a magazine in the writing is different then you're going to find the wall to wall street journal. sure natural ties because you bring in a real literary sense to it it's great to read even if you're not interested in the in the details of the stories it's well written so as

a writer one of the challenges kind of a bit of a tangent story but most want to ask this as a writer when you're talking in this space because the material so a paid for any crimes are when you talk about inflation it's a crime that no one is really aware of happening it's creeping it's all around you how do you deal with that i mean as a writer as a journalist and go through your thought process on that a little bit yeah it's incredibly complicated challenging because the and this is part of the reason that these guys get away with as much as they get away with because the isn't in trying to explain some of these crimes you know you can't do it in a thousand words you can't even do with three thousand words it takes sometimes six seven eight thousand words to explain how many people ation of the municipal bond market works or you know what p. was doing before the crash all those things so the first thing that i try to do always is i try to connect the activity to

a real world consequence i'll find somebody who actually ended up losing money and then i'll try to sort of connects that that consequence to the crime so for instance in jefferson county alabama you start with you know somebody who got laid off or somebody you had to pay a sewer rate that was five or six times what it should have been and then you kind of work back from there and show how j.p. morgan chase's the citizen to sort of bribe its way into the lap of the local infrastructure resulted in that person having to pay all that money and so it's definitely a challenge to i mean you yourself know the verbiage you know is this is a camouflage for all these crimes that it's very very difficult to sort through and the crisis that happened in two thousand and eight the result of this was not any reform but that the too big to fail. well it got even more to big to fail it got too big to fail yeah i list a lot of specifically a piece that you've written the bank of america too crooked to fail. so it's

a great other fantastic you know home run piece to walk us through it a little bit talk about it you know we just try to do with this pieces is kind of walk people through what the consequences of too big to fail are and what what it really means what people don't understand is when these companies get this big and bank of america this is back opec or america show you going out of business and see a thousand and eight they made it's two catastrophic decisions back during the crash one was to acquire countrywide which is the giant subprime lender and the other one was the one money when they were essentially forced to acquire merrill lynch so they had these two gigantic albatross around their neck but instead of putting it out of business it had to be conversely had the opposite effect the company got so big so artificially big because of these acquisitions and now we couldn't let it go out of business and now we're stuck with this company and essentially no matter what they do no matter how many different kinds of ethical misdeeds they get an involved with we really don't have

a choice anymore but the slap them on the wrist kind of hope to get better and continually bail them out and this is this is what we tried to show in the piece we sort of just listed all the different things that they're involved with from municipal bond going to pollutions to reading live boards to all the mortgage backed securities reports that these guys were involved with ripping off the hamp program you know the obama's mortgage program ripping off people who have prepaid bank of america cards to get their unemployment insurance benefits and just one scam after another but we have to turn the other cheek and to sort of let it happen oh no mainstream media like and miss teen basic which is cable network dedicated to the ticker tape basically innocent cheerleader for all this so you got it like a warren buffett autobahn is celebrated as america's sweetheart billionaire he's got a big position a bank of america wells fargo. bank he's directly involved in this fraud rolls fargo bank the story with the drug laws on the mexican cartel right roy tokyo was

acquired by wells hundreds of billions of dollars regularly connected to the chain late changing in mexico twenty two tons of cocaine basically what that what it what they covered well and so you have a warren buffett will go and see him b.c. he's investing in these companies and yet these are places you go alley you know i mean he's the great genius the oracle again from the pop culture side the rolling stone side you go from jimi hendrix star spangled banner you know it was stock to warren buffett playing a ukulele as anyone meeting. and people are celebrating that as a milestone and cultural you know achievement how did we get this far down the slide what happened it's amazing you know i remember i'm not i grew up in a family of journalists and i remember when i was a kid reporters hated powerful people it was a sort of a thing that was part of this business we we have a thing we want to stick it's a man if he was doing something wrong if we put it kind of what we thought that

that was their role to kind of take people down to pay when they when they got too big for their britches but i don't know maybe i don't know if you see i have the same experience but in our business something's changed there's a completely opposite dynamic now in the media which is that we worship powerful figures we grovel and slobber at their feet and it's been a terrible thing for america because there's nobody really asking these questions and these guys are allowed to get away with a lot more because they have the presumption of correctness every time they come out with some new horrible scam made they're always given the benefit of doubt but by reporters and it's the unfortunate thing yeah whistleblowers are being attacked there's no ministration but much more than any other administration in history is attacking whistleblowers right and journalists are under attack all over the world and stopped at borders in our own country in the u.s. and it's become. you know as you say the dynamic has completely changed but listen we've got to touch on this john corson scandal and m.f.

global because here is kind of a new chapter because what we what we have discovered is that this core zine scandal he reached into customer accounts write a took money a segregated customer money so it's not just billionaires playing with each other in ways that ultimately do cause problems for it this was a direct this is just stealing stealing you know no way to round it it's so but of course iran is nothing has been for brought against them straight talk about this and this is an incredible thing i was just out in california last week and i'm doing some research about how we prosecute say welfare fraud in america right and there was a case that i heard about where a woman who was on welfare she was on public benefits and she she used a public. daycare at a time when she was not allowed to use it and they prosecuted for fraud and put her in jail because she used the government service at

a time when she wasn't supposed to be technically right so we actually put people with the meat they make forty or fifty felony cases a month in these california counties against these very very small time. people but you know john course i'm he steals how many how many hundreds of millions of dollars it was i mean and again it wasn't a sophisticated operation it was just like you're talking about it's like when did you know a businessman gets desperate he reaches that embezzles his own company to pay off a drug habit or whatever that's what this was how is this guy still walking around how is there no case it's worse than the trayvon martin thing and this is this well in a way i mean it's it's just it shows you we live kind of in these two different worlds where there's one set of rules over here and what sort of rules over here well it would to make the trayvon martin comparison it oh here's a guy who's getting murdered in the street over italy and karzai is committing a fraud openly. we're in the street in the glare of the spotlight and people are wondering what is that really a crime and there's

a similarity there like there's some just got murdered in the street. i wonder if that's wrong right here the guy course i he just blew in this he just stole this money and like tom is that is that wrong oh finally that's eighty given the arc of the story here you think are going to run out of stories in this on this topic. and it's funny i was just talking to about that with another journalist and we both we both talked about how it's like a lifetime job security thing with this with this topic there's this new and was a bottomless well of these of these scams and you know if you do appeals to your sense of humor i mean they're incredibly dark in there and some of them are quite ingenious actually but they just never end i mean is that your experience that you simply could never run out of is only going to be leaving this post anytime soon great exactly that's amy thanks so much being on the kaiser report thank you all right that's going to do it for this edition of the kaiser report with me nice geyser and stacy herbert i think my guest matt taibbi of rolling stone got some e-mail please do so at kaiser report r t t v dot ru until next time nice guys are saying.