Finally, One Banker Gets Sizable Jail Term. But Will Others Follow?

Sentence in LIBOR manipulation case is ‘one of the harshest penalties meted out against a banker since the financial crisis’

by: Deirdre Fulton

“A message needs to be sent to the world of banking,” said UK Judge Jeremy Cooke on Monday as he handed down a 14-year sentence to former Citibank and UBS trader Tom Hayes, convicted in a London court on eight counts of conspiring to manipulate a global benchmark interest rate known as LIBOR.

While many of the world’s leading banks have paid heavy financial penalties for tampering with the key benchmark, 35-year-old Hayes is the first individual to face a jury trial for manipulating the London Interbank Offered Rate, which is used by the world’s biggest banks for trillions of dollars of global borrowing and lending.

The Guardian reports:

Hayes, from Fleet, Hampshire, was accused of being the ringleader in a vast conspiracy to fix the London interbank offered rate (Libor), a benchmark for $450tn (£290tn) of financial contracts and loans worldwide, between 2006 and 2010.

Motivated by greed and a desire for higher pay, the court heard that Hayes set up a network of brokers and traders that spanned 10 of the world’s most powerful financial institutions, cajoling and at times bribing them to help rig rates – designed to reflect the cost of interbank borrowing – for profit. Hayes would then place large bets on financial markets that were sensitive to Libor moves.

Justice Cooke said Hayes was the “center and hub” of the manipulation, according to theBBC‘s Mark Broad, reporting from the Southwark Crown Court.

“You succumbed to temptation because you could…to gain status, seniority and remuneration,” Cooke reportedly said, adding that Hayes’ actions were “dishonest and wrong.”

But Hayes claimed he was taking part in an “industry-wide” practice, the Guardian reports. “He described the broking market he worked in as the wild west, a place with no rules and where relationships relied on lavish entertainment. He said it was this high-pressure environment which took its toll on him, prompting him to threaten brokers and pick fights with colleagues to move interest rates to aid his trading.”

The UK jury’s unanimous verdict, followed about an hour later by Cooke’s 14-year prison sentence, is said to be “one of the harshest penalties meted out against a banker since the financial crisis.” The Wall Street Journal has a run-down of how Hayes’ sentence stacks up against others who have been convicted of white-collar crimes.

The New York Times notes that Hayes’ case “was seen as a bellwether for British authorities, who have been criticized in the United States for not being as aggressive as the Justice Department when it comes to pursuing financial crime.”

Six other traders from three other financial institutions will go to trial in London in September on charges related to the manipulation of LIBOR. 

 

Source: Finally, One Banker Gets Sizable Jail Term. But Will Others Follow?

 

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In St. Louis, Black Youths Bear Brunt of Dysfunctional Justice System

‘In short, Black children are subjected to harsher treatment because of their race,’ the US Justice Department found

by: Deirdre Fulton

Black kids in St. Louis, Missouri are being disproportionately impacted by unconstitutional and discriminatory miscarriages of justice within the Family Court system, according to a two-year investigation by the U.S. Department of Justice.

According to a statement on Friday from the agency’s Civil Rights Division, the probe found multiple constitutional violations, including:

  • Failure to ensure youth facing delinquency proceedings have adequate legal representation;
  • Failure to make adequate determinations that there is probable cause that a child committed the alleged offense;
  • Failure to provide adequate due process to children facing certification for criminal prosecution in adult criminal court;
  • Failure to ensure that children’s guilty pleas are entered knowingly and voluntarily;
  • An organizational structure that is rife with conflicts of interest, is contrary to separation of powers principles and deprives children of adequate due process; and
  • Disparate treatment of Black children at four key decision points within the juvenile justice system.

“In short, Black children are subjected to harsher treatment because of their race,” thefindings report reads.

For example, the probe found that Black youths are almost one-and-a-half times more likely than White children to have their cases handled “formally,” even after introducing control variables such as gender, age, risk factors, and severity of the allegation. “Processing a case informally is considered more desirable for youth because after successful completion of an informal disposition, the case is dismissed,” the report explains.

In other words, the investigation indicates that Black children have less opportunity to benefit from diversion alternatives—such as drug counseling or educational programming—when compared with White children. 

“The findings we issue today are serious and compelling,” said Vanita Gupta, head of the Justice Department’s Civil Rights Division.

“Missouri was at the forefront of juvenile corrections reform when it closed its large juvenile institutions and moved to a smaller, treatment-focused system and we are hopeful that Missouri will rise to this challenge to, once again, be a leader in juvenile justice reform,” she added. “This investigation is another step toward our goal of ensuring that children in the juvenile justice system receive their constitutionally guaranteed rights to due process and equal protection under the law.”

But to do so will require the sweeping structural overhaul of a system that Gupta describedto the Huffington Post as “just rife with conflict.”

“It is assembly-line justice, if you can call it justice at all,” she added.

As HuffPo journalist Ryan J. Reilly reports:

The Justice Department’s report found that the St. Louis County Family Court’s organization structure “presents inherent conflicts of interest” that are “contrary to constitutional separation of powers principles” and deprive children of due process. The court’s own legal officers play the role of prosecutors in the court, but are not “ethically constrained to pursue justice or act in accordance with the public interest,” according to the report. Those legal officers—the quasi-prosecutors—instead are obligated to advocate zealously for the interests of their clients: deputy juvenile officers, who are responsible for “virtually every aspect” of the operations of the court.

According to the St. Louis Post-Dispatch, the Justice Department will seek a mutual agreement to resolve the violations, but otherwise could litigate.

“The action is similar—but unrelated—to a different Justice Department report issued in March that was highly critical of police and municipal court practices in Ferguson,” thePost-Dispatch notes. “The new report references Ferguson as well, suggesting the that the conflicts of interest in the Ferguson municipal courts and Family Court are similar.”

 

Source: In St. Louis, Black Youths Bear Brunt of Dysfunctional Justice System

As ‘Do-Or-Die’ Talks End In Failure, Could TPP Be Derailed for Good? 

Global justice campaigners say disintegration of Maui negotiations ‘good news for people and the planet’

by: Sarah Lazare

This week’s closed-door Trans-Pacific Partnership (TPP) negotiations in Maui, which President Barack Obama hoped would be the last round, ended Friday in failure to reach a final agreement, thereby pushing a U.S. ratification fight into the tumultuous 2016 presidential election cycle at the earliest—and raising hopes that the corporate-friendly accord could be derailed for good.

Global justice campaigners, who will now have more time to organize against the pact, were buoyed by the development, with Sujata Dey of Council of Canadians declaring on Saturday: “This stall in talks could mean the death of the deal, and a win for the public interest all over the world.”

The TPP ministers claimed in a joint statement released Friday that they have “made significant progress and will continue work on resolving a limited number of remaining issues.”

But analysts say that the ministers’ failure to close a deal strikes a significant blow against Obama’s agenda. Under the timeline set in the controversial Fast Track legislation passedin the U.S. last month, a minimum of roughly four-and-a-half months is required between the conclusion of negotiations and a yes-or-no vote in Congress, according to thecalculations (pdf) of watchdog group Public Citizen.

“This stall in talks could mean the death of the deal, and a win for the public interest all over the world.”
—Sujata Dey, Council of Canadians

“It’s good news for people and the planet that no deal was done at this final do-or-die meeting given the TPP’s threats to jobs, wages, safe food, affordable medicines and more,” said  Lori Wallach, director of Public Citizen’s Global Trade Watch, in a press statement. “Only the beleaguered negotiators and most of the 600 official U.S. trade advisers representing corporate interests wanted this deal, which recent polling shows is unpopular in most of the countries involved.”

Friends of the Earth said on Saturday that U.S. negotiators “are trying to divert attention from this failure by claiming that an agreement concluded in Maui on the TPP environment chapter is a major success. This is incorrect.”

“Environmental chapters in recent U.S. free trade agreements with Peru, Colombia, Korea, and Panama are narrow in scope dealing mainly with conservation issues,” the environmental organization continued. “Not a single one of these agreements has resulted in a U.S. suit to enforce obligations to curb trade in illegally-harvested timber or illegal trade in endangered species. Now, it appears that the TPP environment chapter may be even weaker than its predecessors, and that many of its provisions will be merely aspirational and not legally binding.”

Under negotiation since at least 2008, the TPP includes the U.S. and 11 Pacific Rim countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. These nations together represent 40 percent of the world’s GDP, making it poised to be the largest such deal in history.

The accord has been negotiated in near-complete secrecy, and the vast majority of what is known about its contents has been revealed through leaks. Global social movements and civil societies have raised alarm about provisions that they say dramatically expand corporate power at the expense of people and the planet.

“Only the beleaguered negotiators and most of the 600 official U.S. trade advisers representing corporate interests wanted this deal, which recent polling shows is unpopular in most of the countries involved.”
—Lori Wallach, Public Citizen
One such measure was revealed this week when WikiLeaks published a secret letter from a TPP ministerial meeting in December 2013, which shows that the United States is pressing for the privatization of “state-owned enterprises” (SOEs).

“Even an SOE that exists to fulfill a public function neglected by the market or which is a natural monopoly would nevertheless be forced to act ‘on the basis of commercial considerations’ and would be prohibited from discriminating in favor of local businesses in purchases and sales,” explained WikiLeaks on Wednesday. “Developing countries such as Vietnam, which employs a large number of SOEs as part of its economic infrastructure, would be affected most. SOEs continue to fulfill vital public functions in even the most privatized countries, such as Canada and Australia.”

The TPP is known to include numerous other controversial provisions, including secret corporate tribunals that allow multinationals to sue governments for loss of “expected future profits” and measures that would hike drug costs while decreasing access.

Hundreds gathered this week in Maui, where the negotiations were taking place, to protest the TPP’s “corporate assault on people and planet.”

“Behind me stands my ancestors and my ‘ohana (family),” declared protester Lorilani Keohokalole-Torio on Wednesday. “We are not aligned with people coming in and restructuring how we live. It hurts my na‘au, my gut. We are fed up, we are educated, we are empowered, and we are aligned to help this place, mother earth, regain the strength that she wants back.”

Source: As ‘Do-Or-Die’ Talks End In Failure, Could TPP Be Derailed for Good? | Common Dreams | Breaking News & Views for the Progressive Community

 

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