Thursday, April 11, 2013

Yves Smith — Fed Argues that Mortgage Abuses are Trade Secrets, Meaning Institutionalized Fraud

You can’t have internal knowledge rise to the level of being a trade secret unless their was an institutional decision to keep it secret. That means the Fed is effectively saying that servicer management, and almost certainly bank management (since servicing units don’t have their own corporate counsel) was fully aware of the nature of the practices at issue and chose to keep them secret, supposedly for competitive reasons. This is fact is one of the things lawyers have been eager to establish, namely that bank management knew full well all these servicing tricks were happening, and sought to protect them as important sources of profit. Way to go, Fed! 
Now, of course, this argument is revealing in a lot of other ways. The Fed has also just admitted it thinks it is more important to protect bank knowledge of how to break the law than expose the information. So the Fed has also made explicit that it wants to preserve banks’ ability to rip off people. So the Fed’s official policy is bank profits trump the law. Not that we didn’t know that, but it has now been stated in a baldfaced manner.
Naked Capitalism
Fed Argues that Mortgage Abuses are Trade Secrets, Meaning Institutionalized Fraud
Yves Smith

Fed admits that the game is rigged.

1 comment:

mike norman said...

Not only does the Fed admit that the game is rigged, it is part of the rigging. As in, giving the minutes of its most recent meeting to Goldman Sachs, hedge funds and other select Wall Street players, a day before the official release.