Mind-Blowing Way Small Business Loans Finance Fraud
Citicorp, JP Morgan Chase & Co. and three other mega-banks got caught with their hands in the cartel cookie jar. Now that they are facing criminal penalties, ?it seems likely the super-banks will be looking for you to pick up the?tab once again.?So, if you are in the market?for small business loans, get ready to feel some financial pain.
Like a card player with a marked deck,?they used electronic chat rooms and code words to manipulate exchange rates. Citicorp, JPMorgan Chase, Barclays and the Royal Bank of Scotland manipulated the price of U.S. dollars and euros traded on the foreign currency exchange spot market from December 2007 to January 2013.
On top of that, the Justice Department caught UBS?s hand in the cookie jar violating the terms of a previous settlement involving manipulation of a key global interest rate known as Libor.
Unfortunately, this cartel is responsible for one in every four dollars. Assistant Attorney General Bill Baer said in a press conference,
?The banks pleading guilty today are not ordinary market participants. They are ‘market makers,’ representing 25% or more of dollar?euro exchange rate transactions each year.”
“As such, they were uniquely positioned to manipulate the market. And that is what they did.?
After Justice Department prosecuted?this cabal of global banks for committing international theft,?Lynch said,
“For years participated in a brazen display of collusion. The penalty all these banks will now pay is fitting considering the long-running and egregious nature of their?anti-competitive conduct.?
Regulators started cracking down on the big bangs after the 2008 too-big-to-fail bailouts. U.S. and European officials announced the settlements Wednesday. Each bank holding company agreed to one felony count of conspiring to fix prices and rig bids for foreign currency exchange.
These over-stuffed banks pled guilty to rigging foreign currency exchange rates, and they were slapped with U.S. felony charges.
The international banks? settlements includes:
- $925 million for Citicorp
- $650 million for Barclays;
- $550 million for JPMorgan Chase
- $395 million for Royal Bank of Scotland.
Citicorp paid the largest individual antitrust fine in history, and the big four banks paid the largest set of antitrust fines ever. That may seem like a ton of money,?but it really?amounts to little more than?pocket?change for these guys.
As the LA Times reported, the big bank bad guys also agreed to three years of ?corporate probation? with ?federal court supervision and regular reporting to authorities to determine that the firms had ended all criminal activity.?
Thankfully,?the?agreements?do not prevent the Justice Department from prosecuting individual executives and other bank employees illegal activity.
“UBS promised not to commit additional crimes, but it did. The Department of Justice, under my watch, will not hesitate to file criminal charges for financial institutions that re-offend.”
“It is commensurate with the pervasive harm done. And it should deter competitors in the future from chasing profits without regard to fairness, to the law or to the public welfare.”
Of course the banks blamed a few lackeys for the problem. UBS Chairman Axel A. Weber and Group Chief Executive Sergio P. Ermotti said they,
“Made significant investments to strengthen our control framework and compliance programs. The conduct of a small number of employees was unacceptable and we have taken appropriate disciplinary actions.?
What This Means For Small Business Loans
Of course these banks will not change their ways or pay any real price. They will simply look for another way to run their racket,?and there is?no?way to keep them from raising rates on small business loans to offset the fines. Get ready for?trickle-down rate increases small business owners.
Every small business needs to budget additional?funds to compensate for the coming rate increases. Regardless of how much these mega-banks take in, like a starving shark, they are always hungry for more. Until something major changes, you may as well get used to it and plan accordingly.