The Sisters Of Charity Asked A Fair Question
November 9, 2008
Mr. Vikram Pandit, CEO Citigroup 399 Park Avenue Unique York, NY 10043
Dear Mr. Pandit,
The Sisters of Charity of Saint Elizabeth are concerned about the unique fiscal crisis, its effect on world-wide communities and our Company’s response to this critical situation. We believe the global financial crisis requires major changes in lending practices by our Company. Therefore, the Sisters of Charity of Saint Elizabeth request the Board of Directors to adopt the Eurodad Principles for responsible lending as described in the attached proposal.
The Sisters of Charity of Saint Elizabeth are beneficial owners of 300 shares of stock. Under separate cover, you will receive proof of ownership. We will retain shares through the annual meeting.
I have been authorized to notify you of our intention to file this resolution for consideration by the stockholders at the next annual meeting and I hereby submit it for inclusion in the proxy statement, in accordance with rule 14a-8 of the General Rules and Regulations of the Securities Act of 1934.
If you should, for any reason, desire to oppose the adoption of this proposal by the stockholders, please include in the corporation’s proxy material the attached statement of the security holder, submitted in abet of this proposal, as required by the aforesaid rules and regulations.
Sincerely,
Sister Barbara Aires, SC
Coordinator of Corporate Responsibility
Howdy Folks,
At the risk of sounding like somebody with a cause (Mea culpa; translation– Yup, I’m busted!), I came across this disturbing side attain of the economic meltdown.
The following URL takes you to a pdf document that is 63 pages long. Much of it is repetition of documents sent to citi by the ample people listed in the Subject: of this quiz for you to make your thoughts known to the SEC http://www.sec.gov/index.htm and your elected officials http://www.usa.gov/Contact/Elected.shtml. (Mea maxima culpa; translation–Yup,
I’m so-o-o busted!)
The first 26/63 pages are the requests for this to be included in Citi’s agenda (and their responses) and the last 37/63 pages are the Eurodad charter, itself.
http://www.sec.gov/rules/ic/2008/sistersofcharity121908-14a8-incoming.pdf
The following are excerpts from these communications. Perhaps they will convey the sense of urgency, which prompted me to speak out, to you as well.
“By copy of this letter and the enclosed material, Citigroup Inc. is notifying the Proponent of Citigroup Inc.’s intention to omit the Proposal from the Proxy Materials. Citigroup Inc. currently plans to file its definitive Proxy Materials with the Securities and Exchange Commission on or about March 13, 2009.
(THE PROPOSAL MAY BE OMITTED UNDER RULE 14a-8(i)(7) BECAUSE IT REQUESTS THAT THE COl\1PANY ADOPT THE CHARTER ON RESPONSIBLE FINANCING WHICH (i) WOULD DICTATE ITS LENDING PRACTICES (ii) SEEKS TO GOVERN INTERNAL BUSINESS PRACTICES AND (iii) DICTATES DISCLOSURE, ALL OF WHICH ARE MATTERS THAT RELATE TO THE COl\1PANY’S ORDINARY BUSINESS OPERATIONS ) ” …like THAT has done a great lot to improve Americans’ lives over the last 20 years, or America’s dwelling in world plan over the last 10 years”; Dan Kester a.k.a. uncletumbleweed ….
Part of Citi’s response expresses the cavalier attitude they have exhibited since they began lobbying for The Gramm-Leach-Bliley Financial Modernization Act of 1999 (signed into law in 2000) and the Commodity Futures Modernization Act ( signed into law in Jan.2001 after being passed as an add-on to other legislation in the last vote of the last meeting of the last session of Congress before William J. Clinton left office.)
Oh yes… it is real hard to find and it does provide exemptions AND exclusions from oversight by the SEC and the Commodity Futures Trading Commission which has permitted the bundling of, and trading of, the toxic assets causing our current crisis!
This is from Citi’s response to the SEC regarding The Sisters of Charity’s proposal:
“Unlike recent years, where proposals related to tobacco, executive compensation, environmental protection, and affirmative action and employment matters have been found to raise significant policy concerns, the subject matter of the Proposal has not attracted a comparative level of attention from the media, a significant degree of public concern, nor has there been a significant increase in legislative and/or regulatory initiatives undertaken in relation to the issue. Again, while the Proposal raises noteworthy issues, it simply does not raise significant policy concerns that warrant the Staff overriding a matter that is clearly related to the ordinary business of the Company.”
Q: OK, can we give it some attention?
A: Yes…we can!
Many of these changes are the utter result of City, Morgan-Stanley, BOA, Goldman-Sachs, (who gave US Robert Rubin, Henry Paulson and many other ‘decision makers’ of doubtful sincerity: personal opinion…uncletumbleweed), and others involved in the BAILOUT!
I believe America does need to speak out to the SEC, the President, House of Representatives, and the Senate on the need for Citi to let their stockholders know what they have done, and that “The Staff ” needs oversight….immediately.
Let’s see at legislation introduced in 1999 (The year that “Financial Modernization” became current.) Coincidentally, soon enough to get legislation passed, and signed into law, before a new president was elected and sworn in. January of 2001.
These first two are my favorites, selected with 20/10 hindsight, after perusing 100/134 pieces of legislation submitted in 1999. Gold medals awarded to a man of “outstanding and enduring contributions to individual freedom and opportunity in American society through his exhaustive research and teaching of economics, and his extensive writings on economics and public policy” … and to the gentleman who taught all of us there is a little of “Charlie Brown” everywhere you look! (;-)
(Keep these two in mind as we open our journey through 1999 and tell me later if (a) this is really ironic (b) Bill Clinton was showing off (c) the 105th Congress accidentally did something that did not hurt America (d) all of the above, or (e) you see some sort of pattern here that might suggest collusion.
[ 88.S.1971 : A bill to authorize the President to award a gold medal on behalf of the Congress to Milton Friedman, in recognition of his outstanding and enduring contributions to individual freedom and opportunity in American society through his exhaustive research and teaching of economics, and his extensive writings on economics and public policy.
Sponsor:Sen Gramm, Phil [TX] (introduced 11/19/1999) Cosponsors (69)
Committees: Senate Banking, Housing, and Urban Affairs; House Banking and Financial Services
Latest Major Action: 2/18/2000 Referred to House subcommittee. Status: Referred to the Subcommittee on Domestic and International Monetary Policy.
89.S.2060 : A bill to authorize the President to award a gold medal on behalf of the Congress to Charles M. Schulz in recognition of his lasting artistic contributions to the Nation and the world, and for other purposes.
Sponsor:Sen Feinstein, Dianne [CA] (introduced 2/10/2000) Cosponsors (77)
Committees: Senate Banking, Housing, and Urban Affairs
Latest Major Action: 2/10/2000 Referred to Senate committee. Status: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs. ]
These Bills also were introduced in 1999. Please note who the sponsored these Bills…
7.H.R.1094 : To amend the Federal Reserve Act to broaden the range of discount window loans which may be used as collateral for Federal reserve notes.
Sponsor:Rep Leach, James A. [IA-1] (introduced 3/11/1999) Cosponsors (3)
Committees: House Banking and Financial Services; Senate Banking, Housing, and Urban Affairs
Latest Major Action: Became Public Law No: 106-122 [GPO:Text, PDF]
8.H.R.1400 : To amend the Securities Exchange Act of 1934 to improve collection and dissemination of information concerning bond prices and to improve price competition in bond markets, and for other purposes.
Sponsor:Rep Bliley, Tom [VA-7] (introduced 4/14/1999) Cosponsors (27)
Committees: House Commerce; Senate Banking, Housing, and Urban Affairs
House Reports: 106-149
Latest Major Action: 6/15/1999 Referred to Senate committee. Status: Received in the Senate and read twice and referred to the Committee on Banking.
________________________________________________________________________
11.H.R.2565 : To interpret the quorum requirement for the Board of Directors of the Export-Import Bank of the United States.
Sponsor:Rep Leach, James A. [IA-1] (introduced 7/20/1999) Cosponsors (3)
Committees: House Banking and Financial Services; Senate Banking, Housing, and Urban Affairs
Latest Major Action: Became Public Law No: 106-46 [GPO:Text, PDF]
________________________________________________________________________
26.S.187 : A bill to give customers notice and choice about how their financial institutions share or sell their personally identifiable sensitive financial information, and for other purposes.
Sponsor:Sen Sarbanes, Paul S. [MD] (introduced 1/19/1999) Cosponsors (7)
Committees: Senate Banking, Housing, and Urban Affairs
Latest Major Action: 6/9/1999 Senate committee/subcommittee actions. Status: Committee on Banking. Hearings held.
46.S.576 : An recent bill to provide for improved monetary policy and regulatory reform in financial institution management and activities, to streamline financial regulatory agency actions, to provide for improved consumer credit disclosure, and for other purposes.
Sponsor:Sen Gramm, Phil [TX] (introduced 3/10/1999) Cosponsors (None)
Committees: Senate Banking, Housing, and Urban Affairs
Senate Reports: 106-11
Latest Major Action: 3/10/1999 Placed on Senate Legislative Calendar under General Orders. Calendar No. 35.
49.S.753 : A bill to enhance competition in the financial services industry by providing a prudential framework for the affiliation of banks, securities firms, and other financial service providers; and for other purposes.
Sponsor:Sen Daschle, Thomas A. [SD] (introduced 3/25/1999) Cosponsors (9)
Committees: Senate Banking, Housing, and Urban Affairs
Latest Major Action: 3/25/1999 Referred to Senate committee. Status: Read twice and referred to the Committee on Banking.
55. S.900 : An Act to enhance competition in the financial services industry by providing a prudential framework for the affiliation of banks, securities firms, and other financial service providers, and for other purposes.
Sponsor: Sen Gramm, Phil [TX] (introduced 4/28/1999) Cosponsors (None)
Committees: Senate Banking, Housing, and Urban Affairs; House Judiciary
Senate Reports: 106-44; Latest Conference Report: 106-434 (in Congressional Record H11255-11292)
Latest Major Action: Became Public Law No: 106-102 [GPO: Text, PDF]
57.S.921 : A bill to facilitate and promote electronic commerce in securities transactions involving broker-dealers, transfer agents and investment advisers.
Sponsor:Sen Abraham, Spencer [MI] (introduced 4/29/1999) Cosponsors (4)
Committees: Senate Banking, Housing, and Urban Affairs
Latest Major Action: 4/29/1999 Referred to Senate committee. Status: Read twice and referred to the Committee on Banking.
58.S.958 : A bill to amend sure banking and securities laws with respect to financial contracts.
Sponsor:Sen Bennett, Robert F. [UT] (introduced 5/4/1999) Cosponsors (None)
Committees: Senate Banking, Housing, and Urban Affairs
Latest Major Action: 5/5/1999 Senate committee/subcommittee actions. Status: Committee on Banking, Housing, and Urban Affairs Subcommittee on Financial Institutions. Hearings held. With printed Hearing: S.Hrg. 106-483.
59.S.1015 : A bill to require disclosure with respect to securities transactions conducted “online”, to require the Securities and Exchange Commission to study the effects of online trading on securities markets, to prevent online securities fraud, and for other purposes.
Sponsor:Sen Schumer, Charles E. [NY] (introduced 5/12/1999) Cosponsors (3)
Committees: Senate Banking, Housing, and Urban Affairs
Latest Major Action: 5/12/1999 Referred to Senate committee. Status: Read twice and referred to the Committee on Banking.
________________________________________________________________________
62.S.1189 : A bill to allow Federal securities enforcement actions to be predicated on State securities enforcement actions, to prevent migration of rogue securities brokers between and among financial services industries, and for other purposes.
Sponsor:Sen Collins, Susan M. [ME] (introduced 6/9/1999) Cosponsors (3)
Committees: Senate Banking, Housing, and Urban Affairs
Latest Major Action: 6/9/1999 Referred to Senate committee. Status: Read twice and referred to the Committee on Banking.
63.S.1195 : A bill to give customers glimpse and choice about how their financial institutions share or sell their personally identifiable sensitive financial information, and for other purposes.
Sponsor:Sen Schumer, Charles E. [NY] (introduced 6/9/1999) Cosponsors (1)
Committees: Senate Banking, Housing, and Urban Affairs
Latest Major Action: 6/9/1999 Referred to Senate committee. Status: Read twice and referred to the Committee on Banking.
76.S.1565 : A bill to license America’s Private Investment Companies and provide enhanced credit to stimulate private investment in low-income communities, and for other purposes.
Sponsor:Sen Sarbanes, Paul S. [MD] (introduced 8/5/1999) Cosponsors (5)
Committees: Senate Banking, Housing, and Urban Affairs
Latest Major Action: 8/5/1999 Referred to Senate committee. Status: Read twice and referred to the Committee on Banking.
77.S.1663 : A bill to combat money laundering and protect the United States financial system, and for other purposes.
Sponsor:Sen Schumer, Charles E. [NY] (introduced 9/29/1999) Cosponsors (1)
Committees: Senate Banking, Housing, and Urban Affairs
Latest Major Action: 9/29/1999 Referred to Senate committee. Status: Read twice and referred to the Committee on Banking.
80.S.1712 : An original bill to provide authority to control exports, and for other purposes.
Sponsor:Sen Gramm, Phil [TX] (introduced 10/8/1999) Cosponsors (None)
Committees: Senate Banking, Housing, and Urban Affairs; Senate Commerce, Science, and Transportation
Senate Reports: 106-180
Latest Major Action: 4/4/2000 Senate committee/subcommittee actions. Status: Committee on Commerce, Science, and Transportation. Hearings held. Hearings printed: S.Hrg. 106-1104.
82.S.1872 : A bill to amend the Federal Credit Union Act with respect to the definition of a member business loan.
Sponsor:Sen Sessions, JeffCosponsors (1)
Committees: Senate Banking, Housing, and Urban Affairs
Latest Major Action: 11/5/1999 Referred to Senate committee. Status: Read twice and referred to the Committee on Banking.
83.S.1879 : A bill to promote international monetary stability and to share seigniorage with officially dollarized countries.
Sponsor:Sen Mack, Connie, III [FL] (introduced 11/8/1999) Cosponsors (None)
Committees: Senate Banking, Housing, and Urban Affairs
Latest Major Action: 2/8/2000 Senate committee/subcommittee actions. Status: Subcommittee on Economic Policy. Hearings held. With printed Hearing: S.Hrg. 106-508. 84.S.1903 : A bill to amend the privacy provisions of the Gramm-Leach-Bliley Act.
Sponsor:Sen Shelby, Richard C.Cosponsors (1)
Committees: Senate Banking, Housing, and Urban Affairs
Latest Major Action: 11/10/1999 Referred to Senate committee. Status: Read twice and referred to the Committee on Banking. 85.S.1920 : A bill to combat money laundering and protect the United States financial system by addressing the vulnerabilities of private banking to money laundering, and for other purposes.
Sponsor:Sen Levin, Carl [MI] (introduced 11/10/1999) Cosponsors (1)
Committees: Senate Banking, Housing, and Urban Affairs
Latest Major Action: 11/10/1999 Referred to Senate committee. Status: Read twice and referred to the Committee on Banking. 86.S.1924 : A bill to ensure personal privacy with respect to financial information, to provide customers recognize and choice about how their financial institutions share or sell their personally identifiable sensitive financial information, to provide for strong enforcement of these rights, and to protect States’ rights.
Sponsor:Sen Leahy, Patrick J. [VT] (introduced 11/16/1999) Cosponsors (7)
Committees: Senate Banking, Housing, and Urban Affairs
Latest Major Action: 11/16/1999 Referred to Senate committee. Status: Read twice and referred to the Committee on Banking. 87.S.1968 : A bill to amend the Federal securities laws to enhance oversight over certain derivatives dealers and hedge funds, reduce the potential for such entities to increase systemic risk in the financial markets, enhance investor protections, and for other purposes.
Sponsor:Sen Dorgan, Byron L. [ND] (introduced 11/18/1999) Cosponsors (None)
Committees: Senate Banking, Housing, and Urban Affairs
Latest Major Action: 11/18/1999 Referred to Senate committee. Status: Read twice and referred to the Committee on Banking. 92.S.2097 : A bill to authorize loan guarantees in order to facilitate access to local television broadcast signals in unserved and underserved areas, and for other purposes.
Sponsor:Sen Burns, Conrad R. [MT] (introduced 2/24/2000) Cosponsors (20)
Committees: Senate Banking, Housing, and Urban Affairs
Senate Reports: 106-243
Latest Major Action: 4/3/2000 Held at the desk. 93.S.2101 : A bill to promote international monetary stability and to share seigniorage with officially dollarized countries.
Sponsor:Sen Mack, Connie, III [FL] (introduced 2/24/2000) Cosponsors (1)
Committees: Senate Banking, Housing, and Urban Affairs
Senate Reports: 106-354
Latest Major Action: 7/24/2000 Placed on Senate Legislative Calendar under General Orders. Calendar No. 705. 94.S.2107 : A bill to amend the Securities Act of 1933 and the Securities Exchange Act of 1934 to reduce securities fees in excess of those required to fund the operations of the Securities and Exchange Commission, to adjust compensation provisions for employees of the Commission, and for other purposes.
Sponsor:Sen Gramm, Phil [TX] (introduced 2/28/2000) Cosponsors (13)
Committees: Senate Banking, Housing, and Urban Affairs
Senate Reports: 106-360
Latest Major Action: 7/25/2000 Placed on Senate Legislative Calendar under General Orders. Calendar No. 712. 99.S.2293 : A bill to amend the Federal Deposit Insurance Act and the Federal Home Loan Bank Act to provide for the payment of Financing Corporation interest obligations from balances in the deposit insurance funds in excess of an established ratio and, after such obligations are satisfied, to provide for rebates to insured depository institutions of such excess reserves.
Sponsor:Sen Santorum, Rick [PA] (introduced 3/27/2000) Cosponsors (18)
Committees: Senate Banking, Housing, and Urban Affairs
Latest Major Action: 3/27/2000 Referred to Senate committee. Status: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs. 100.S.2328 : A bill to prevent identity fraud in consumer credit transactions and credit reports, and for other purposes.
Sponsor:Sen Feinstein, Dianne [CA] (introduced 3/30/2000) Cosponsors (2)
Committees: Senate Banking, Housing, and Urban Affairs
Latest Major Action: 3/30/2000 Referred to Senate committee. Status: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs. 1999 was a year of great interest to the financial community, all right, but, let’s get wait on to the good Sisters’ problem. After all, we must contact the SEC and ask them to inform Citigroup, Inc. that the American public really does care about what has happened to America’s economy….IMMEDIATELY, FOLKS!
First, let us begin with The Gramm-Leach-Bliley Financial Modernization Act of 1999 (11/12/1999: Became Public Law No: 106-102.)
with a synopsis provided by pbs Frontline in May of 2003 : http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html
This broadcast details efforts to repeal Depression era legislation as the result of lobbying by America’s leading financial minds (? ). Please note that Secretary of the Treasury Robert Rubin resigned his state and shortly thereafter assumed various positions at Citi. (That was the perfect opportunity for a ‘double-intender’, but, fortunately, I do not speak French.)
In Senate committee meetings addressing the need for “MODERNIZATION” of futures trading- (The Library of Congress >THOMAS Home >Committee Reports > Search Results
79-010, Calendar No. 766, 106TH CONGRESS, ReportSENATE, 2d Session 106-390)
-considerable time and effort was spent producing the “new and improved” device business could be conducted.
Distinguished of this was the result of the President’s Working Group (PWG) http://www.ustreas.gov/press/releases/reports/otcact.pdf, presented Nov. 19, 1999. Testimony given to them, and The Senate Committee On Agriculture… (No wonder I couldn’t pick up any record of the CFMA in Senate Finance OR Banking Committee proceedings) by the financial institutions deemed “too big to fail”. Citigroup, Inc. features prominently in these proceedings (from the 1990’s to point to day legislation) regarding Troubled Asses… (Oops)…Troubled Assets Relief Program (TARP) and the economic stimulus program our country will be paying for. (Ad infinitum/ad nauseum; no translation required).
The following statement was delivered FOR them. (I assume this must be about the time they began to believe “it simply does not raise valuable policy concerns that warrant the Staff overriding a matter that is clearly related to the ordinary business of the Company.” …uncletumbleweed)
COALITION of INVESTMENT AND COMMERCIAL BANKS regarding
THE REPORT OF THE PRESIDENT’S WORKING GROUP ON FINANCIAL MARKETS entitled OVER-THE-COUNTER DERIVATIVES MARKETS AND
THE COMMODITY EXCHANGE ACT before the COMMITTEE ON AGRICULTURE, NUTRITION AND FORESTRY
UNITED STATES SENATE
FEBRUARY 10, 2000
Chairman Lugar, members of the Committee, this testimony is submitted by Edward Rosen, a partner with Cleary, Gottlieb, Steen & Hamilton, on behalf of an ad hoc coalition of investment and commercial banks (the “Coalition”). The Coalition is comprised of the following institutions:
The Chase Manhattan Bank, Citigroup Inc., Credit Suisse First Boston Inc.,
Goldman, Sachs & Co., Merrill Lynch & Co., Inc., Morgan Stanley Dean Witter & Co.
This Coalition is grateful for the opportunity to present the Committee with the Coalition’s views regarding the record of the President’s Working Group on Financial Markets (the “Working Group”) entitled Over-the-Counter Derivatives Markets and the Commodity Exchange Act (the “Report”). The Coalition supports the recommendations location forth in the Report and urges the Committee to incorporate the Report’s recommendations in legislation during this session….
I. Enhancing Legal Certainty for Swaps
The Coalition strongly supports the Working Group’s recommendation that bilateral swap agreements involving financial commodities between institutional counterparties be excluded from regulation under the CEA…
… In addition to the recommendations of the Working Group, the Coalition would support further relief for transactions involving non-financial commodities and a clarification that individually negotiated bilateral transactions, including those involving non-financial commodities, are not subject to regulation under the CEA.
II. Electronic Trading Systems
The Coalition supports the Working Group’s recommendation to exclude from regulation under the CEA electronic systems for trading financial derivatives which limit participation to institutional counterparties trading for their believe accounts. This exclusion would buy a principal barrier to financial and technological innovation in the United States…
…Beyond the Working Group’s recommendation, the Coalition would further encourage Congress to create an appropriate “light-handed” regulatory framework for those electronic trading systems that do not operate as exchanges and that would not otherwise qualify for exclusion from the CEA under the Working Group’s recommendations
III. Clearing Systems
The Coalition welcomes the Working Group’s recommended clarification that qualifying swaps may be cleared without subjecting the underlying transaction to regulation under the CEA.
IV. Treasury Amendment
The Coalition welcomes the Working Group’s recommendation to clarify the intent of the Treasury Amendment by replacing the term “board of trade” with the term “organized exchange.” This clarification alone will eliminate a broad deal of uncertainty and forestall powerful of the litigation that has arisen in this state in the past.
V. Hybrid Instruments
In the station of hybrid instruments, the Working Group recommended that Congress clarify that the CEA’s restriction on futures on non-exempt securities does not apply to hybrid instruments that would otherwise qualify for exemption from the CEA under the CFTC’s current rules.
VI. Single-Stock Futures; Shad-Johnson Accord
The Coalition does not believe that single-stock futures should be unlawful per se…
… Congress must recognize that providing legal certainty for OTC derivative instruments and removing barriers to innovation are much more urgent matters for U.S. financial markets than creating a regulatory framework for single-stock futures.
VII. Derivatives Dealers
The Coalition agrees with the Working Group’s conclusion that no current need has been demonstrated to regulate OTC derivatives dealers, most of whom are already subject to divulge and indirect regulatory oversight….
The Coalition notes that the Report reiterates the Working Group’s earlier recommendation to expand the SEC’s and CFTC’s risk assessment authority with respect to broker-dealers and futures commission merchants.(1) The Coalition fully supports the goal of improved risk reporting to financial regulators.(2) The Coalition has some concerns, however, regarding the scope of the Working Group’s recommendations in this area, and stands ready to engage in a dialogue on the relevant issues.
VIII. Conclusion
It is time for Congressional action to ensure moral certainty and lift the barriers to innovation posed by the CEA. The Working Group has unanimously urged the Congress to act and has provided Congress with a clear course of action. Moreover, the Working Group’s recommendations have widespread support among financial market participants. We urge the Committee to take advantage of these rare conditions and go snappily during this session to enactment of a bill incorporating the Working Group’s recommendations.
Given the extraordinary consensus in the public and private sectors regarding the urgent need for accurate certainty, market participants are carefully monitoring the reauthorization process for a signal that Congress will act on these important issues. As we have testified previously, and as financial market participants are acutely aware, the risks and obstacles to innovation posed by the CEA do not burden other major financial centers. If Congress continues to miss opportunities to modernize the CEA, the U.S. will jeopardize its position as the leading global financial center and the U.S. legislative and regulatory community will significantly diminish its own influence over the development of policy governing the global financial markets.
Congress must not allow less important issues to impede progress on these pressing matters.
The Coalition very much appreciates the Committee’s interest in these issues and is committed to working with the Committee and other interested parties in an effort to solve these problems once and for all.
Since I am attributing much of the research, and advice given to Congress, to the PWG, perhaps now would be a swell time to introduce these fine folks to you. (For those of you who already know this information…Light ‘em if you need ‘em…prayer candles, cigarettes, whatever…but come on help. We still have a LOT of ground to cover.)
……………………………………………………………………………………………………………………………………………………….
The PWG that released the study http://www.ustreas.gov/press/releases/reports/otcact.pdf, presented Nov. 19, 1999, consisted of:
Greenspan, Alan, Chairman of the Board of Governors of the Federal Reserve System, Washington, DC
Summers, Lawrence, Secretary of the U.S. Department of the Treasury, Washington, DC
Levitt, Arthur, Chairman of the Securities and Exchange Commission, Washington, DC
Rainer, William, Chairman of the Commodity Futures Trading Commission, Washington, DC
Gore, Al, President of the Senate, United States Senate, Washington, D.C
……………………………………………………………………………………………………………………………………………………..
I am inclined to believe ALL of the decisions made by this next committee should be reviewed. Hey, 20/20 hindsight strikes, again! Check carefully the names of participants in this high level planning meeting…uncletumbleweeed
http://www.sec.gov/divisions/marketreg/marketinfo/121400mtg.htm
Division of Market Regulation:
Advisory Committee on Market Information:
Minutes of December 14, 2000 Meeting
Thursday, December 14, 2000
1:12 p.m.
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C.
Participants
Mr. Michael Atkin
Vice President, Financial Information Services Division,
Software and Information Industry Association
Robert G. Britz
New York Stock Exchange
Andrew M. Brooks
T. Rowe Price
Robert Colby
SEC
Matthew S. DeSalvo
Morgan Stanley Dean Witter
Carrie E. Dwyer
Charles Schwab
Mitchell Feuer
Reuters America
Joel Greenberg
Susquehanna Partners
David A. Hunt
McKinsey & Company
Simon Johnson
Massachusetts Institute of Technology
Richard Ketchum
National Association of Securities Dealers
Donald C. Langevoort
Georgetown University Law Center
Bernard L. Madoff
Bernard L. Madoff Investment Securities
Mark A. Minister
Bridge Trading
Annette L. Nazareth
SEC
Edward Nicoll
Datek Online Holdings
Gerald D. Putnam
Archipelago
Peter Quick
American Stock Exchange
Eric D. Roiter
Fidelity Management & Research Co.
Joel Seligman
Washington University School of Law
By Telephone
Robert H. Forney
Chicago Stock Exchange
William R. Harts
Salomon Smith Barney
Edward J. Joyce
Chicago Board Options Exchange
Thomas M. Joyce
Merrill Lynch
H.R.4038
Title: To save a Securities and Derivatives Oversight Commission in order to combine the functions of the Commodity Futures Trading Commission and the Securities and Exchange Commission in a single independent regulatory commission, and for other purposes.
Sponsor: Rep DeFazio, Peter A. [OR-4] (introduced 3/20/2002) Cosponsors (6)
Latest Major Action: 4/15/2002 Referred to House subcommittee. Status: Referred to the Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises.
……………………….
WHERE WERE THE WATCHDOGS?
February 22, 2002
….PAUL SOLMAN: Over at the CFTC, meanwhile, say critics, the regulators didn’t regulate Enron by choice, exempting the company from regulation back in 1993, the last act of outgoing chair Wendy Gramm, wife of Texas Senator Phil Gramm. Professor Michael Greenberger was a CFTC lawyer in the late-’90s.
MICHAEL GREENBERGER, University of Maryland Law School: After these exemptions took place, they could in private compose deals about how they would trade energy, and they were completely deregulated. Nobody knew about them.
PAUL SOLMAN: Wendy Gramm, meanwhile, became an Enron board member within weeks of the exemptions vote, while Enron and others kept pushing for less regulation.
MICHAEL GREENBERGER: Exemptions weren’t large enough after time went. They wanted to do more. So the philosophy they adopted and the philosophy industry adopted was twofold: We’re objective going to ignore the regulators, we’re going to lobby like crazy on the Hill, and we’re going to convince Congress that this status needs to be deregulated in Toto. And they achieved that objective in December of 2000.
PAUL SOLMAN: The achievement was the Commodity Futures Modernization Act, legislation that exempted Enron and others permanently from CFTC oversight, written in part by Senator Gramm. Enron, however, was but one of many, says Elizabeth Ritter.
ELIZABETH RITTER: Enron was one of dozens of energy, metals, banks, market participants that come and talk to us, that go to the Hill. I mean, Enron was not… certainly by any means, the largest player who came and talked to us or tried to say us what they wanted and what they needed.
PAUL SOLMAN: As to Enron’s collapse, says Ritter…
ELIZABETH RITTER: There is certainly a perceived problem with accounting and disclosure issues and auditing issues. That’s a completely separate issue from the trading paradigm.
PAUL SOLMAN: And trading is what the CFTC regulates. But the kind of trading Enron was pioneering became a separate sigh outside the CFTC’s jurisdiction for a simple reason, says Greenberger: That’s the way Congress wanted it.
PAUL SOLMAN: What happens? A Congressperson calls on the phone and says, “Hey, you guys, I hear what you are talking about; forget it”? I mean…
MICHAEL GREENBERGER, Outmoded CFTC Lawyer: What happens is, not a Congressperson, but five different committees have hearings, call you up, ask you to testify, and yell at you for interfering with the free market system; that you’re slowing down the American economy by trying to get some transparency in the system. The banks and the corporations are saying, “Hey, how can these federal financial regulators do this? We’re very sophisticated people. We don’t need to be regulated.”… (How is that workin’ out for ya? …uncletumbleweed)
We have an answer to the last examine! Go ahead, caller!
On April 28, 2003, the Securities and Exchange Commission (SEC), the National Association of Securities Dealers (NASD), the Unusual York Stock Exchange (NYSE), New York State Attorney General Eliot Spitzer and other state regulators announced a final $1.4 billion settlement agreement reached with 10 Wall Street firms in their investigation into Wall Street conflicts of interest.
In the settlement, the 10 firms agreed to execute significant structural changes designed to insulate their research departments from their investment banking departments. Among these changes are:
They agreed to physically separate the research and investment banking departments within an investment bank to prevent the exchange of information between the divisions.
They agreed that from now on, senior management would dwelling the firm’s research budget without taking investment-banking revenues into consideration.
They agreed to not directly or indirectly link research analysts’ compensation to investment banking revenues.
They agreed that the investment banking side would have no input into analysts’ ratings on a corporate banking client.
They agreed to prohibit research analysts from soliciting investment-banking business.
Two of the most well known analysts, who came to symbolize the conflicts of interest of the 1990s bull market, were fined and banned for life from the securities industry. Henry Blodget of Merrill Lynch was ordered to pay $4 million in fines and Jack Grubman of Salomon Smith Barney was ordered to pay $15 million as fraction of the terms of the settlement. In addition, Sanford I. Weill, CEO of Citigroup, was banned from talking to his firm’s analysts about their research outside of the presence of company lawyers. (Do you remember this man’s part in the repeal of legislation designed to protect US? Do any of the other names sound familiar? ….uncletumbleweed)
The settlement agreement required the firms to set up contracts with at least three independent research firms to make independent research available to their customers. In addition, seven of the firms agreed to pay $80 million to fund investor education programs, and $387 million of the $1.4 billion was designated to a restitution fund for investors.
The ten firms also voluntarily agreed to ban the practice known as “spinning” — the allocation of hot initial public offering (IPO) stocks to corporate banking clients. The settlement singled out Salomon Smith Barney and Credit Suisse First Boston as particularly having engaged in this practice.
Source: SEC
http://www.sec.gov/news/speech/factsheet.htm
(Gee, this is only three and 4 months after the passage of the G-L-B FMA of 1999, but it was enough to inspire a commission to settle the regulatory parameters for the SEC and CFTC…uncletumbleweed)
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June 10, 2005, 1:04pm EDT
CITIGROUP SETTLES ENRON LAWSUIT FOR $2 BILLION
Citigroup Inc., the nation’s biggest financial institution, has agreed to pay $2 billion to investors in a class-action lawsuit accusing the company of helping energy giant Enron doctor its financial statements and create off-the-books partnerships…
… Citigroup Chief Executive Charles Prince, who took over in 2003, said it was a key priority for the bank to resolve major cases like this one and “to put a difficult chapter in our history tedious us.”
Online NewsHour Special Report: Enron After the Collapse
(Five and a half years…and counting…uncletumbleweed)
Now let us address the claim that “the subject matter of the Proposal has not attracted a comparative level of attention from the media, a significant degree of public concern, nor has there been a significant increase in legislative and/or regulatory initiatives undertaken in relation to the assure.”
This particular SEC item of business is directly attributable to the Commodity Futures Modernization Act, and even includes links for offering your feedback and input.
SECURITIES AND EXCHANGE COMMISSION
17 CFR PARTS 230, 240 and 260
[Release Nos. 33-8999; 34-59246; 39-2549; File No. S7-02-09]
RIN 3235-AK26
Temporary Exemptions for Eligible Credit Default Swaps To Facilitate Operation of Central Counterparties To Clear and Settle Credit Default Swaps
AGENCY: Securities and Exchange Commission.
ACTION: Interim final temporary rules; seek information from for comments.
SUMMARY: We are adopting interim final temporary rules providing exemptions under the Securities Act of 1933, the Securities Exchange Act of 1934, and the Trust Indenture Act of 1939 for certain credit default swaps to facilitate the operation of one or more central counterparties for those credit default swaps. The interim final temporary rules justify such credit default swaps as ”’eligible credit default swaps”’ and exempt them from all provisions of the Securities Act, other than the Section 17(a) anti-fraud provisions, as well as from Exchange Act registration requirements and from the provisions of the Trust Indenture Act, provided distinct conditions are met….
DATES: Effective Date: The interim final temporary rules are effective January 22, 2009 until September 25, 2009.
Comment Date: Comments on the interim final temporary rules should be received on or before March 23, 2009.
ADDRESSES: Comments may be submitted by any of the following methods:
Electronic Comments
• Use the Commission’s Internet comment form http://www.sec.gov/ rules/interim-final-temp.shtm
• Send an e-mail to rule-comments@sec.gov. Please include File Number S7-02-09 on the subject line; or
• Use the Federal Rulemaking Portal http://www.regulations.gov. Follow the instructions for submitting comments.
Paper Comments
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number S7-02-09. This file number should be included on the subject line if e-mail is used. To help us process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (http://www.sec.gov/rules/interim-final-temp.shtml). Comments are also available for public inspection and copying in the Commission’s Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. All comments received will be posted without change; we do not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly.
……………………………………………………………………………………………………………………………………………………………………………
The Congressional Oversight Panel’s “Special Report on Regulatory Reform” (January, 2009) begins with this evaluation of the situation.
I. Executive Summary
1. Lessons from the Past
Financial crises are not new. As early as 1792, during the presidency of George Washington, the nation suffered a severe panic that froze credit and nearly brought the young economy to its knees. Over the next 140 years, financial crises struck on a regular basis—in 1797, 1819, 1837, 1857, 1873, 1893-96, 1907, and 1929-33—roughly every fifteen to twenty years. But as the United States emerged from the Great Depression, something considerable happened: the crises stopped. New financial regulation—including federal deposit insurance, securities regulation, and banking supervision—effectively protected the system from devastating outbreaks. Economic growth returned, but recurrent financial crises did not. In time, a financial crisis was seen as a ghost of the past. After fifty years without a financial crisis—the longest such stretch in the nation’s history—financial firms and policy makers began to perceive regulation as a barrier to efficient functioning of the capital markets rather than a valuable precondition for success. This change in attitude had unfortunate consequences. As financial markets grew and globalized, often with breathtaking speed, the U.S. regulatory system could have benefited from smart changes. But deregulation and the growth of unregulated, parallel shadow markets were accompanied by the nearly unrestricted marketing of increasingly complex consumer financial products that multiplied risk at every stratum of the economy, from the family level to the global level. The result proved disastrous. The first warning followed deregulation of the thrifts, when the country suffered the savings and loan crisis in the 1980s. A second warning came in 1998 when a crisis was only narrowly averted following the failure of a large unregulated hedge fund. The near financial panic of 2002, brought on by corporate accounting and governance failures, sounded a third warning. The United States now faces its worst financial crisis since the Great Depression. It is necessary that the lessons of that crisis be studied to restore a proper balance between free markets and the regulatory framework necessary to ensure the operation of those markets to protect the economy, honest market participants, and the public.
2. Shortcomings of the Present The current crisis should come as no surprise. The present regulatory system has failed to effectively manage risk, require sufficient transparency, and ensure fair dealings.
___________________________________________________________________________________
This research has reaffirmed my faith in God, and that WE are supposed to question whether these financial matters are being properly investigated.
SECURITIES AND EXCHANGE COMMISSION 17 CFR Parts 240 and 249b [Release No. 34-57967; File No. S7-13-08] RIN 3235-AK14 Proposed Rules for Nationally Recognized Statistical Rating Organizations AGENCY: Securities and Exchange Commission (“Commission”).
On page 1/168, I came across this little gem from the SEC,
ACTION: Proposed rule.
SUMMARY: Today, in the first of three related actions the Commission is proposing rule amendments that would impose additional requirements on nationally recognized statistical rating organizations (“NRSROs”) in order to address concerns about the integrity of their credit rating procedures and methodologies in the light of the role they played in determining credit ratings for securities collateralized by or linked to subprime residential mortgages. Second, the Commission also today makes a proposal related to structured finance products rating symbology. And third, two weeks from today, the Commission intends to propose rule amendments that would be intended to reduce undue reliance in the Commission’s rules on NRSRO ratings.
In closing, for now…this does not reach even close to touching base on all of the information that I have read since last July, when I began to be obsessed (? ) with finding the acknowledge to “What Caused This? “
The best reply I have been able to come up with is “1999-2000.” America’s financial wizards managed to convince the Congress and financial regulatory agencies that it was in their best interests to pass these pieces of, uh, legislation during this congressional session. Regardless of the results of the 2000 Presidential election, the changes would already be made, and in place. Either to be manipulated at will, or as a boobey trap for the incoming administration. (Missed a chance to exploit another ‘double intender’, didn’t I? )
I am convinced in all the manipulation and politicking going on in 1999-2000, none of them saw 9/11 coming,
and that is an issue I will take up in a future issue.
May the Peace of the Lord be with you always, and all ways!
http://www.usa.gov/Contact/Elected.shtml
http://www.sec.gov/index.htm This is the SEC homepage!
http://oversight.house.gov/documents/20081114143312.pdf
HEDGE FUNDS And THE FINANCIAL MARKET
Thursday, November t3, 2008
House of Representatives,
Committee on Oversight and Government Reform (This is a test of your ability to focus, folks. Please,don’t forget to benefit The Sisters of Charity? )
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