it's artsy dot com slash usa you can also follow me on twitter at liz wall for now have a great night. kaiser this is the kaiser report so goldman sachs caught breaking the law. stacy herbert max kaiser indeed s e c fines goldman sachs twenty two million dollars over a puddle 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 in 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 i suppose it shows the the whole it's like a football huddle because the blankfein likes to touch the little guys but behind so i think is the main objective of this organ of this meeting well in fact you

said it was a crime but this is a fine they're paying so i think the f.c.c. is actually treating it like it was cuddles that went a little bit wrong. wrong i mean this is their mollycoddling now we're in pay well what happens when coddles 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 so they have to be careful that they're just whispering little nonchalance so and so's into each other's ears about so and so being bought and sold it's called inside information isn't and they've they've created a weekly meeting at basel called the inside information meeting yeah exactly ok they're trading information back and forth with their between the bank and the analysts and the traders what's not supposed to do any claim of the time they're not doing and they're clean we don't need any more regulation we don't need a restoration of classical because we don't do this work or for 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 it basically is what that amounts to likely they'll get whacked but one of these times are going to get whacked if they keep doing this so max in two thousand and seven according to see 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 they symmetric warfare exactly there's a some of the asymmetry here is that the clients are getting hammered their clients are getting through oily screwed the insiders at goldman and their privileged clients who make money trying to get inside information by lobbyists and by congressmen to pass laws to make it easy to trade inside information just filling the enrolled in weekly asymmetry information meeting with even more grist for their insider trading mark manipulation mill that they use the pot line their pockets i'm told that they're lucky not to be down the sparks at the top well that's where

gangster is hung out in this seventy's and eighty's and these are the new gangsters . new york now they said the f.c.c. said these meetings the so-called huddles these little cuddles and boy blank feinstein happened between two thousand and six and two thousand and eleven they do leave out a very important huddle or several huddles between lloyd blankfein his traders and their analysts and sir. treasury secretary without the racks paulson i mean you go to the two thousand and eight period we find out later that paulson thanks to a whole with the insiders on wall street told folks that the government was going to be bailing out these institutions printing money to do so the banks all crippled and quadruple during that period of time based on hoddle 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 to use 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 and he met with these bankers from goldman sachs he met with hedge funders who used to be at goldman sachs and he 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 cuddle 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 and washington and trading on inside information leading to this amalgam of fraud that's poisoning the waters of our financial system and causing widespread austerity despair discussed outrage pre-revolution well max you

bring up the word fraud and according to joseph devore an attorney at close in o'connor in new york and a former assistant regional director and the s.c.c.s. new york office he said the fine was not in consequential for a settlement that involves technical violations of internal poll season procedure is oh that's the best that's the technical violation that's that's that's we're talking about technically they need to take the money that they make from training us inside information to go and pass laws to eliminate each subsequent sec nicole 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 we're going to blame find came into this room stabbed you multiple times right here on camera it would be a technical violation of knife laws. exactly this is a technical it was

a violation of the no knife into the lunchroom a lot of the fact that there is a pool of blood underneath the t.v. presenter is really not to be just on at this time because technically he's not violating anything of substance so he can. lawk weather is completely rob ing the end of global customers and having the us bail them out it's ok because he was wearing using the right fork at lunch and so finally on this goldman sachs story this guy joseph ever 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 panoply settlement so yes goldman sachs already paid a penalty in two thousand and three for this exact same technical violation but they have more leverage now because of the financial collapse to clean with goldman sachs to pay a little bit more money this background. money for your law breaking in your group

little behavior is totally those who do school good we just want a few good news. but you know this is outrageous that the f.c.c. is begging goldman the to right up the fine that they're comfortable with yeah it's sort of actually you know saying you know what you guys are shameless lawbreaking thugs banks are scum and how about we bring about a sparser wackier you know i love these chinese banks who give you know they take a great result 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 hill and me you kill me over here if you're good to go violations were you prepared to go boots on this new technical violation so this approach of the took ok if i could park anywhere i was too little pony oh what is marked given that good that's me i don't need ok i don't want to well these are

technical violations from the other big. mystery who the bigger group car then we pull suit look good for. the look but it's j.p. morgan state we dilute god is the shiksa of the. this is like a little blown here 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 diamond 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 triple that they tripled it 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 pyrrhic prerelease achilles mattress. achilles and the killers of mackerel this comes into the into the coliseum where the plan to transform yet another market into an over secure 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 counts on wind 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 drawing a comparison to federal reserve chairman ben s. bernanke used power in the government bond market well briganti is to the treasury market excell is to the derivatives market but they're too big to unwind right without causing massive financial disruption they get too big to unwind by accident no that's the idea we get too big to unwind on purpose so that we don't need to on the wind because this is a skiing were we are out there struggling rants from everybody who is even tangentially connected to this economy they must go through this interest rate scheme 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 mention mafioso so let's turn to this

further information about this story here the cia is growing size and market power have made it an increasingly important customer to wall street's trading desk in a market influenced by heads. loans and other investors the former employees said positions in credit derivatives have become so large that some market participants dubbed him voldemort 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 then brings us back to that first story about goldman sachs the f.c.c. is afraid to mention goldman sachs is crying spy name so it's called a technical violation please don't tell us lloyd blankfein right so this whole idea that too big to fail was a problem so we need to rein in we need a 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 a time table there for a couple of congressmen down the smarts and say you know to try to stop all this

was a complete farce because it got much greater they've gotten much worse the whole thing is going completely out of control say sarah thanks so much for being on the kaiser report thank you max that way much more coming away so stay right there. with. the official. called touch from the. lights on the. video on demand. my old car. ownership street now with the palm of your. car. there hasn't been anything good on t.v. . used to get the maximum political impact on. the source material is for soaps true it was

a point we. we wanted to visit. something else if. you know how sometimes you see a story and it seems so appalling you think you understand it and then you glimpse something else you hear or see some other part of it and realized everything is off you don't know i'm sorry welcome to the big picture. more news today violence is once again flared up. and these are the images the world has been seeing from the streets of canada. trying to cook orations to rule

the day. i am asked as a welcome back to the kaiser report special in studio guest matt taibbi 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 quick 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 lately is just convince readers that it's not really a you can you can amik story or a fine and 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 so highfalutin and they use these are the full swaps and derivatives and collateralized debt obligations but they

could just as well be talking about you know whack and a guy behind the dumpster at sparks total essentially the same thing so you're right gangster banks keep winning public business they're the 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 so tell us about yeah this is an example where it's exactly like the old mafia business in the old days we had municipal bid rigging and it was a mafia group that would prey upon some local municipality and the 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 town goes

out 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. it's. 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 bones that are garbage well our junk bonds us they're called your face which runs right exactly so now another instant aspect of this is that they know the mob as gone global right all street mob and you see and has seen no italy there's a big story race of ray and other and you've covered this extensively so couple of highlights there again given that global the globalization of this absolutely that's one of the problems with prosecuting this kind of crime is that it's it's so good it's so cross territorial and you're 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 they seek out the areas where the

regulations of the weakest are the regulators who are the weakest and that's where the base their operations but the laws are are less powerful so it's very hard to nail them down for things like the swat manipulations or the really big story i think that's about it this year is the manipulation of libel war which is the this 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 call this one or not but bank of new york was caught and the multi-trillion dollar custodian business for pensions and and whatnot they were stepping in front of all the trading of the form of stroke running four x. four and just scalping the pennies billions and billions and now they're saying well 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 a great magazine and you 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 at the in the magazine in the writing is different then you're going to find the wall to wall street journal. financial 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 that as a writer one of the challenges it's kind of a bit of a tangent story but most want to ask you this as a writer when you're talking in this space because the material so ok for any crimes are when you talk about inflation it's a crying that no one is really aware of it happening it's creeping it's all around you how do you deal with that and you know 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 it three thousand words it takes sometimes six

seven eight thousand words to explain how manipulative the municipal bond market works or you know what a i g 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 so i find somebody who actually ended up losing money and then i'll try to sort of connect 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 you show how j.p. morgan chase's the solution to this 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 it's definitely a challenge to i mean you yourself know the verbiage you know is this is

a count of laws for all these crimes that it's very very difficult to sort through and the crisis that happen in two thousand and eight the result of this was not any reform but that the too big to fail. got even more too big to fail they got too big to fail yeah let's talk about that specifically a piece that you've written bank of america to 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 we just try to do with this piece this is kind of walk people through what the consequences of too big to fail are and what what it really means are people going under stand as when these companies get this big and bank of america this is back up make america should get out of business in two thousand and eight they made two catastrophic decisions back during the crash one was to acquire countrywide which is the giant subprime lender and the other one was 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 do conversely had the opposite effect the company got so big so artificially big because of these acquisitions but now we couldn't let it go out of business and now we're stuck with this company and it 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 if you wish ans to reading live boards to all the mortgage backed securities reports that these guys were involved with ripping off the hamp program you know that obama's mortgage program ripping off people who have prepaid bank of america cards to get their unemployment insurance benefits is just one scam after another but we have to turn the other cheek and to sort of let it happen what most mainstream media like and less basic which is cable network dedicated to the ticker

tape basically as a cheerleader for all this so you've got it like a warren buffett will come on is celebrated as america's sweetheart billionaire he's got a big position a bank of america wells fargo. a bank he's directly involved in this fraud well fargo bank the story with the drug laws on the mexican cartel. acquired by wells hundreds of billions of dollars are regularly connected to the chain changing in mexico twenty two tons of cocaine basically what that what it what they covered well and so they have a warren buffett will go on c.b.c. he's investing in these companies right and they get these are the 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 i was in the meeting very early or it 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 and 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 wanted to stick it to the man if he was doing something wrong different he kind of what we've been taught that that was their role to kind of take people down a peg when they when they got too big for their britches but i don't know maybe i don't know if you see 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 crawl in 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 they have the presumption of correctness every time they come out with some new horrible scam they do they're always given the benefit of doubt by reporters and it's just that it's an unfortunate thing again whistleblowers are being attacked because you know ministration much more than any

other administration history is attacking whistleblowers great britain journalists are under attack all over the world and stopped at borders and our own country and us and it's become a. you know as you say the dynamic has completely changed but leslie got to touch on this john chorus and scandal on the m.f. global because here it's kind of a new chapter because what we what we have discovered is that the press corps 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 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 what brought against him was right talk about this all 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 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 technically right so we actually put people that they need to 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 mean 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 one sort of rules over here well it

would be to make the trayvon martin comparison it know here's a guy who's getting murdered in the street already late and karzai is committing a fraud openly. within the street in the glare of the spotlight and people are wondering what is that really a crime there's a similarity there life is only just got murdered in the street. i wonder if that's wrong right here he got course and he just blew in as he just stole his money and like tom is that is that wrong oh finally that's a being given the arc of the story here you think are going to run out of stories in this on this topic so it's funny i was just talking about that with another journalist and we both we both talk about how it's like a lot of time job security thing with this with this topic there's a sleep and was bottomless well of these of these scams and you know if you do appeal to your sense of humor i mean there are incredibly dark in there and some of them are quite ingenious actually but they just never end i mean is that your experience is just simply never run out of the going to be live in this post

anytime soon right exactly and that's a big thank so much being on the kaiser report thank you all right that's going to do it for this mission of the kaiser report with me max geyser and stacy herbert with my guest matt taibbi of rolling stone going to send me an email please do so at kaiser reported r t t v dot are you guys are saying. you know sometimes you see a story and it seems so you think you understand it and then you glimpse something else you hear or see some other part of it and realized everything you thought you knew you don't. charge locums a big picture. there

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