Mobs of Angry Investors Fight Market Rigging, Maul Deutsche Bank in Class-Action Lawsuit, other Banks Next

Since none of the criminal bankers responsible end up in prison…

Clint Siegner, a Director at Money Metals Exchange:

Prior to last week, Deutsche Bank made headlines for a string of huge losses and massive exposure to risky derivatives. The last time the firm’s shares traded at prices this low, the world was in the midst of 2008’s financial apocalypse.

Deutsche Bank didn’t need more bad news, but a group of investors who brought suit against the massive German bank for cheating them by rigging the London “fix” price for gold and silver certainly must be smiling. Last week, the bank offered to settle their class action suit for an undisclosed amount.

Perhaps more importantly, DB promises to provide evidence to help the plaintiffs in their suit against the other banks who participated in manipulating the fix: Bank of Nova Scotia, Barclays, HSBC and SocGen. In a letter to U.S. District Court Judge Valerie Caproni, the plaintiff’s attorney said, “In addition to valuable monetary consideration, Deutsche Bank has also agreed to provide cooperation to the Plaintiffs, including the production of instant messages and other electronic communications, as part of the settlement.”

If the information DB provides is incriminating, as the plaintiff’s expect, it won’t be the only recent example of bankers getting caught talking smugly amongst themselves about swindling investors and clients. A year ago Citigroup, JPMorgan Chase, Barclays, and RBS pled guilty to criminally rigging the foreign exchange markets following the leak of some embarrassing communiques.

That case rested, in large part, on logs from an exclusive chat group participants dubbed “The Cartel.”

Here is a good example of the type of conversations contained in those logs. The banker representing Barclays “mentors” another member:

“…whats the worst price I can put on this where the customers decision to trade with me or give me future business doesn’t change…if you ain’t cheating, you ain’t trying.”

It is not only typical of the kind of thing members discussed. It also pretty well sums up bankers’ attitudes toward the public and their clientele generally.

Big banks have paid nearly $200 billion in fines in nearly 200 cases involving rotten dealings since 2009. Of course, bank CEOs claim no involvement and that each case is an isolated incident involving a few bad apples in the lower ranks. Perhaps there are even a few naive people around who still believe that to be the only extent of the problem.

Authorities, including the CFTC, might find a basis for criminal charges in material that DB provides. It would be nice to see bankers going to jail. The scale of fraud and theft makes Bernie Madoff look like a piker. But don’t hold your breath.

It was the corporations that pled guilty to criminal charges in the Foreign Exchange scandal a year ago, not individuals. The people involved seem to have immunity.

There have been exactly zero “perp walks” by high ranking executives at any of the major banks over the past decade. This despite overwhelming evidence of pervasive fraud in mortgage underwriting, derivatives, commodities trading, and currency markets. Instead, taxpayers pay for the bailouts and company shareholders get to pay the fines or settlements, which are often substantially smaller than the ill-gotten gains. None of the criminal bankers responsible end up in prison.

At least last week’s news is a signal that civil courts may provide some recourse for crowds of people who have been cheated. Since the news, Canadian investors filed two additional class-action suits seeking $1 billion in damages. More suits are likely on the way.

While regulators may be captured by these mega banks, it’s harder to control mobs of angry investors in civil court. Clint Siegner, a Director at Money Metals Exchange

When the Fed heard the screaming from Wall Street earlier this year about the chaos in the markets, it brushed rate hikes off the table and changed its verbiage. What ensued was a marvelous rally all around, particularly in bonds. But Moody’s pours some cold water over it. Read…  OK, I Get it, this Junk-Bond Miracle-Rally Is Doomed

Enjoy reading WOLF STREET and want to support it? You can donate. I appreciate it immensely. Click on the beer and iced-tea mug to find out how:

Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here.

  22 comments for “Mobs of Angry Investors Fight Market Rigging, Maul Deutsche Bank in Class-Action Lawsuit, other Banks Next

  1. michael says:

    It is a fallacy to say that these banks are too big to jail. There is a revolving door between government and the banks. Therefore there is no interest in jailing bankers because one day you want to be one and get paid too for looking the other way.

    • NotSoSure says:

      I like the Japanese term for “revolving door” the best. Amakudari, which literally means “descend from heaven”.

  2. Si says:

    A while ago I would have been moved by this news. Now… not at all.

    Looking at gold today, a ramp up followed by a smash down. The price of of PM’s cannot be allowed to get away from those who control it, so all this about Douche Bank is part of the theatre.

    Call me when there are prosecutions and senior execs in jail.

    Wont happen I am sad to say.

    Libor rigging………. silence
    FX rigging …….. crickets
    Mortgage fraud ….. nothing to see here

    Fraud is the new normal


    • Chris says:

      Fraud is indeed the new normal. The revolving door between politics and the finance sector is being laid naked for all to see. Note the disenfranchisement evident in the GOP primaries. Note the rise of Bernie Sanders on the Democrat side. The average citizen is fed up. People will tolerate a lot if the money is flowing and times are good. When times are tough then they start to pay attention.

  3. MC says:

    A while back I read that Deutsche Bank was just one major scandal away from losing its license to operate in New York… here we are. Somehow I doubt this prophecy will come true.

    Regarding gold price rigging, UBS was caught doing the same in Zurich. Like DB they are “turning Queen’s evidence” on their accomplices… I wonder if DB gave in so easily because their name was in the evidence provided by UBS to Bern, which apparently includes a paper trail going all the way to London and Dubai.
    This scandal is major and those involved have every interest in settling out of court to avoid even more troubles than they already have on their (greedy) hands.

    • Oneyedjack says:

      Bankers Reap Forfeited Souls As Millions Turn to Prostitution: This is the headline for Greece. Girls sell their bodies just to eat. Now E U has same problem as there is no work.US next? The bankers all protected by politicians to do anything they want.When are people going to say enough?

  4. Oneyedjack says:

    Obama and Holder gave bankers the green light to loot investors and taxpayers.Now they are vultures picking the bones clean.Get fined,huge profits.So who’s pockets are being filled?Audit President,Michelle,her mother,down through congress. Both Obama and Michelle’s mothers where prostitutes.The apple never falls far from the tree. Holder was a radical anyone else would have been in prison ,Holders charges dropped in armed takeover of campus building,hostages?I believe Holder recruited as Obama.

  5. david says:

    Wonder if JPM will be “allowed” to be outed. My stack and I want in on that class action.

  6. Bruce Adlam says:

    Yes and who went to jail for causing the near collapse of the world financial markets back in 2007 .The regulators have not done there job. The buck stops at the top and he is way to weak instead of fixing it back then they have only made it alot worse the time bomb is ticking.The whole thing is rigged and corrupt .With wall street at a near record high you would think the US and the global economy was firing on all four cylinders but with the collapse of the commodities market and massive amounts of debts in the us and around the world how can that be.

    • Chicken says:

      “Firing on all four cylinders”

      This illustrates my point, more proof we’re constantly being managed downward to an inadequacy is acceptable mentality. Four cylinders are slightly more than paint shakers, the phrase is supposed to be: “Firing on all eight” but you’ve been brainwashed to the point 4 cylinders has become the common phrase.

      Why do you think pickup trucks (full frame vehicles) are so popular, it’s b/c the all-purpose family truckster is no longer an option and after all, where’s the incentive to create a family anyway knowing your savings will be stolen no matter? So buy a truck and a boat, enjoy your summer and who needs or cares to raise a family, it should be discouraged and illegal from a man-made climate change perspective.

  7. OutLookingIn says:

    The two Canadian class action lawsuits against Bank of Nova Scotia will in all likelyhood, result in criminal investigations and criminal charges brought upon B of NS and include all those who had in hand in the fraud.

    Once the civil action has run it’s course, watch for those who will begin to line-up at the crown prosecutors office looking for plea deals. This is where loyalty among thieves gets thrown under the nearest bus!

    Unlike American jurisprudence, Canadian law courts take a very dim view of fraud committed against the public and will not hesitate to proffer charges against those responsible, no matter how high their position may be. You can hear the office shredders and hammer blows to hard drives emitting from Bay Street already!

    • Petunia says:

      The biggest fraud being committed in Canada now seems to be the bidding up of real estate by the Chinese. Just because it seems they are flipping properties higher doesn’t mean they really are paying the higher prices. In the mean time the real buyers, Canadians, are getting gouged by the market the Chinese have created. How come the crown isn’t making sure all those transactions and transfers in China are real.

      • Chicken says:

        Exactly, when was the last time any insider special interest group cartel member actually went to jail? Yeah sure, the small fish trader employee who got caught but no whales, not a one.

        That’s how we know the real intention.

  8. Chicken says:

    “Big banks have paid nearly $200 billion in fines in nearly 200 cases involving rotten dealings since 2009.”

    Probably a drop in the bucket in comparison to the amount looted by these criminal enterprises, members of insider special interest groups.

    Is there any wonder the public doesn’t trust them, come on man what’s with their argument taxpayers should cover their losses when their recklessness should be cause for jail?

    I thought the people voted for change, it’s doubtful the change delivered by the POTUS was anything near the change they had in mind, programs implemented at the worst time, weakening global growth.

    That’s why I’m convinced the entire goal is all about minimizing growth, think about it.

  9. nick kelly says:

    Hey! Show some respect for Bernie. Piker indeed. He didn’t have thousands of employees. As I often have to remind Americans- Lindy was not the first to fly the Atlantic he was the first SOLO flight. (First- Brits Alcock and Brown in WWI vintage Vickers Vimy)
    Bernie has a street cred to hold up in the yard so don’t go dissin so multi- billion hit .

    Ok, to be serious- good piece. I wonder how much more Deutschland Inc. wants on its plate- it can’t let VW go and it can’t let DB go. Methinks there may be some VERY high level talks between Berlin and Washington.

    • Chicken says:

      Yes, Berlin is being beat into submission, and they will. I sincerely believe Bernie has no intention of stopping the transfer of wealth, what contrary assurances do you have besides personal opinion?

      • nick kelly says:

        By Bernie I mean Bernard Madoff. I do not have an opinion on his plans for the transfer of wealth in the pen. My remark was a obviously a joke about referring to the largest personal fraud in history as a ‘piker’

  10. walter map says:

    Oh please. A few hundred billion is just a cost of doing business to these guys. Trillions might get their attention if you keep it up for a few years.

    I searched here for the phrase “corporate death penalty” without success and with considerable disappointment. Really, if you’re not going to get serious you must expect it to keep happening. Banksters have been pulling these stunts for centuries and they’re not going to stop unless you make them.

    Up next: literal pikes and pitchforks. You still have plenty to look forward to.

    • Chicken says:

      Every time pitchfork and tar sales jump, gold is allowed to lift, briefly. Used to be Sunday nights ~3am were the smack down session now it seems to occur some time mid week.

  11. Spencer says:

    “fix” says it all in our e-con-omy.

  12. Kent says:

    The Derivatives monster is now 1,500 trillion US dollars in nominal value (1.5 quadrillion) and all five too-big-to-fail US banks, plus HSBC & Barclays are exposed by trillions of dollars. Who will save them when the Derivatives monster implodes?

Comments are closed.