Apparently, The Turtles Run Only to Neil Barofsky

    A story is told that Bertrand Russell, while teaching for a year in India, was once interrupted from a lecture on modern cosmology by an audience member who declared, “The universe rides on the back of a turtle.”

    To which Russell replied, “But what’s the turtle ride on?”

    “Another turtle,” replied the audience member.

    Insisted Russell, “But what’s that turtle ride on?”

    Came the answer, “I’m sorry Professor, but it’s turtles all the way down.”

    That story has often come to mind over the last eight years. In the early part of the last decade I had cause to mingle in financial circles, and by 2004 I had smelled skunk regarding a range of Wall Street activities such as are chronicled extensively on DeepCapture. I went with plenty of data, anecdotes, and experts, first to NASD, then to the SEC, then the House, then Senate Banking, and finally to the financial press. All of them reacted with something between indolence and hostility (and thus began seven years of one federal investigation against me after another, just as I had been forewarned). I began to use the expression “Turtles all the way down” to describe the Establishment and its capture by financial interests, and wondered if the turtles would run all the way down, forever, or if we would ever hit something solid.

    Today has brought good cheer in the form of an excellent piece by Gretchen Morgenson, “Into the Bailout Buzz Saw“, concerning Bailout, by Neil Barofsky (coming out Tuesday, July 24). Ms. Morgenson, one of several journalists at the New York Times, describes assertions that will not be strange to long-term readers of DeepCapture:

    “IT might seem remarkable that there’s more to say about our late Bailout Age. But there is more — a lot more…..

    “We tag along with Mr. Barofsky, a former federal prosecutor, as he walks into a political buzz saw as the special inspector general for TARP. Government officials, he says, eagerly served Wall Street interests at the public’s expense, and regulators were captured by the very industry they were supposed to be regulating. He says he was warned about being too aggressive in his work, lest he jeopardize his future career…

    “‘The suspicions that the system is rigged in favor of the largest banks and their elites, so they play by their own set of rules to the disfavor of the taxpayers who funded their bailout, are true,’ Mr. Barofsky said in an interview last week. ‘It really happened. These suspicions are valid…’

    “THIS was just one of many examples from Mr. Barofsky’s 16-month tenure, during which, he says, Washington abandoned Main Street while rescuing Wall Street. ‘There has to be wide-scale acknowledgment that regulatory capture exists, dominates our system and needs to be eradicated,’ Mr. Barofsky said in the interview. ‘It was my job to bring as much transparency to taxpayers so they knew what was going on. Writing the book, I tried to bring the same level of transparency so people understand how captured their government has become to the financial interests.’”

    Oh.

    This post was written by:

    - who has written 162 posts on Deep Capture.

    I am a concerned citizen who has been focused on systemic instability since 2004.

    Contact the author

    40 Responses to “Apparently, The Turtles Run Only to Neil Barofsky”

    1. iStandUp says:

      “A Call for an International Real Investors Spring”

      Gold market analyst and mining entrepreneur Jim Sinclair is on the warpath against market manipulators, naked shorters, and the other criminals lately having the run of the world financial system, and, like GATA, he’s asking for your help — your involvement, your activism. It’s a matter of making yourself heard by the executives of the companies you invest in, the government regulatory agencies, and your elected officials.

      Sinclair’s appeal is headlined “A Call for an International Real Investors Spring”… (This intro to Jim Sinclair’s letter from caseyresearch.com)

      “A Call for an International Real Investors Spring” is located here:

      http://www.jsmineset.com/2012/07/19/a-call-for-an-international-real-investors-spring/

    2. LarryP says:

      Bungled Bank Bailout Leaves Behind Righteous Anger

      By Neil Barofsky

      http://www.bloomberg.com/news/2012-07-22/bungled-bank-bailout-leaves-behind-righteous-anger.html

    3. Anonymous says:

      FINALLY AN UPDATE…. POST MORE CHAPTERS AND ARTICLES! PLEASE !

      6:21am Anonymous, great radio interview link. Have any more links to other interviews?

      Radio interviewers need this question:
      1. WHAT DO YOU THINK ABOUT WARREN BUFFETT LENDING EVIL GOLDMAN SACHS A HELPING HAND DURING THE FINANCIAL CRISIS?
      2. WHAT DO YOU THINK ABOUT CHARLIE MUNGER BEING AN ADMIRER OF LLOYD BLANKFEIN? IS HE DISILLUSIONED?
      3. WHY IS IT, THAT IN THE TIGHT KNIT VALUE INVESTING COMMUNITY, THE ROCK STARS AT BERKSHIRE HATHAWAY, WHO ALSO TALK ABOUT CLEANING UP WALL STREET, ARE NOT ACTIVELY SUPPORTING FAIRFAX FINANCIAL HOLDINGS AND OVERSTOCK.COM AND THEIR LAWSUITS AGAINST WALL STREET CRIMINALS?

      EARTH TO RABBI WARREN — “WTF OLD MAN?????”

      I HOPE THEY HAVE A GRAND PLAN JUST WAITING FOR THE TRIAL… UGHHHHHHHHHHHHH

    4. Faith in America says:

      Just when some people were ready to give up.

      Main street isn’t done yet so please don’t throw your soul into the fire.

      The tide has turned and the financial elite have something coming.

    5. searrows says:

      Anonymous

      They are willfully ignoring what they intrisically know, they are willing to tolerate it because they love the idea of the markets and know they can use weakness in stocks to buy the ones they want at a cheap price and they also know they can wait out out these bear raids. What they are not considering is if this continues to go unaddressed that the possibility of a market collapse grows.
      The pack of wolves is growing stronger and more in number with each passing day.
      Is tha cabal still actively using bought and paid for journalist? I see the turkey with the glasses who is all shill is still not in jail and appearing with Cramer regularly. He ran for cover for awhile so they are becoming emboldened again.

      nothing has changed, these guys are serial stock molesters…the SEC is captured, there are some large cases LIBOR and the like but they are going to turn them in to misdeamenors and the public is not capable of understanding but they want to believe in the free markets.This plays into strong desire to glorify the free markets and the propaganda that is constantly reinforced by the bought and paid for media. It won’t belong and the banks will be running add campaigns touting their trust worthiness again.

      “When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it.” –Frederic Bastiat 1852

    6. Anonymous says:

      Make no mistake many are and were captured. Let’s also not be naive. The bottom line re saving the system was many innocent would be affected. And many have been negatively affected to this day. Cause and effect. I don’t need a Barofsky to tell me what took place. Most here know. What is needed is how to avoid, get those in place to do their jobs or it’s when and how it happens again. NOT IF!

    7. Lila Rajiva says:

      Patrick,

      Good to see you back on the site. I have so many questions.
      1. There are two different accounts of the Libor manipulation – that it’s a big deal..and that’s it not. Will you be covering it at some point?

      2. Can you tell us why the insider-trading investigation just focused on one South Asian network and completely skipped some more consequential networks? Not that the insider trading was anything but a side-show.

      3. Why the Madoff case was wrapped up as it was by Judge Rakoff..and your thoughts on it.

      • jim says:

        The authorities handily strain at gnats and swallow camels, as they say. Anytime they can net a few Indians, who don’t have the blessing, support, and skin pigmentation of the major players, it’s a great day. Don’t look for Lloyd B, or Stevie C to be wearing shackles anytime soon.

    8. iStandUp says:

      “The War on Silver” by Theodore Butler | July 23, 2012 – 10:32am

      It has taken more than 25 years for me to fully comprehend a conclusion that I never wanted to reach, namely, that there is an organized war against the price of silver that has come to include the US Government….

      As I indicated previously, my best guess is that the CFTC was compromised in dealing appropriately with the silver manipulation by interference from the US Treasury Secretary who oversaw the takeover of Bear Stearns (and its giant silver and gold short positions) by JPMorgan. It now appears clear that JPMorgan extracted guarantees of future immunity for manipulation as a condition of the takeover. The Bear Stearns takeover gave JPMorgan a free “get out of jail” card from the US Treasury Dept for the continued silver manipulation. In the political pecking order, the CFTC is many rungs below the Treasury Dept. It was a deal structured that was not in the best interest of the American investing public…

      http://www.silverseek.com/commentary/war-silver

    9. Excellent article. I am going through some of these issues as well.
      .

    10. jim says:

      Biggest mystery in life: What the hell happened to this website and why don’t you offer an explanation as to why you are toothless now.

      Have they won, Pat?

      • SAC of Capital says:

        Have they won, Pat?

        Not to speak for Patrick but…… No, they have not Won!

        I would also caution against counting Pat and crew out. They seem opportunistic.

        Good day.

    11. Anonymous says:

      Lawsuit against Goldman Sachs.

      Jonathan Johnson:
      “…our suit against Merrill Lynch and Goldman Sachs is no longer in it’s appeal stage and [is now in the] get ready for trial stage…” (2012 Q2 overstock.com earnings call)

      The lawsuit is for $3.5 billion? Given the current market capitalization a win would make OSTK a 10-bagger. Cramer can mention that for buying — back up the truck *honk sound*. BOO YAH!

      Laws and other good reasons for not talking about the trial.

      And for Overstock.com, questions can be sent to their twitter service. “When will the Squirmy Rabbit Vibrating Dildo be a medal worthy deal?”

    12. Anonymous says:

      Steven Cohen suspected of criminal activity by FBI, wire tapped since 2007.

      Charlie Gasparino reporting:

      http://www.foxbusiness.com/industries/2012/07/18/government-wide-ranging-insider-trading-investigation-winding-down/

      Who is the blonde incessantly disrupting Charlie? Her behavior and body language matches that of a captured journalist.

      It reminds me of this:

      Becky Quick Bickers Quickly but Blithely Fails to Follow
      http://www.youtube.com/watch?v=oJFaKiF9VL0

    13. eastbayopine says:

      so much crime -so little time to report it….

    14. Anonymous says:

      I wonder if Knight’s purchase of Penson in May has anything to do with their crash yesterday and today.

      “Computer glitch” sounds too convenient of an excuse.

      http://in.reuters.com/article/2012/08/02/knightcapital-regulators-idINL2E8J26R720120802

    15. Anonymous says:

      For Release:
      Contacts: July 31, 2012
      Michelle Ong (202) 728-8464
      Nancy Condon (202) 728-8379

      Biremis, Corp. and Peter Beck Action

      FINRA Expels Biremis, Corp. and Bars President and CEO Peter Beck
      WASHINGTON — The Financial Industry Regulatory Authority (FINRA) announced today that it has expelled Biremis, Corp., formerly known as Swift Trade Securities USA, Inc., and barred its President and Chief Executive Officer, Peter Beck, for supervisory violations related to detecting and preventing manipulative trading activities such as “layering,” short sale violations, failure to implement an adequate anti-money laundering program, and financial, operational and numerous other securities law violations.

      Thomas Gira, FINRA Executive Vice President and Head of Market Regulation, said, “In creating a business that allowed a significant volume of overseas day trading to pass through its systems on a regular basis, Biremis and Mr. Beck needed to devote the appropriate level of resources and personnel to ensure that this business was properly supervised, yet failed on both accounts. Biremis’ inadequate supervisory system resulted in the firm violating multiple rules designed to protect the integrity of the markets and to ensure that member firms adhere to the high standards required of the brokerage industry.”

      FINRA found that during various periods from June 2007 to June 2010, Biremis and Mr. Beck failed to establish a supervisory system reasonably designed to achieve compliance with the applicable laws and regulations prohibiting manipulative trading activity. Among other things, Biremis’ supervisory system failed to include policies and procedures designed to detect and prevent layering on U.S. markets. Layering involves the placement of non-bona-fide orders on one side of the market in order to cause market movement that will result in the execution of an order entered on the opposite side of the market, after which the non-bona-fide orders are then canceled. Biremis also failed to establish policies and procedures reasonably designed to detect and prevent manipulative activity designed to affect the closing price of a security. As a result, Biremis failed to detect and prevent potential layering activity and potential manipulation of the closing price of equity securities on U.S. markets.

      FINRA found that despite the fact Biremis’ only business was to execute transactions on behalf of day traders around the world, Biremis and Mr. Beck failed to implement an adequate anti-money laundering (AML) program to comply with the Bank Secrecy Act. Among the violations related to its AML program, Biremis failed to properly detect suspicious activities and file suspicious activity reports (SARs) when appropriate. Also, Mr. Beck appointed an unqualified and untrained individual to supervise Biremis’ AML compliance program and Biremis failed to provide adequate AML training to employees.

      Biremis and Mr. Beck also violated a number of additional securities laws and rules. Biremis failed to maintain a margin system and margin accounts, and did not have policies and procedures in place related to the use of margin. The firm also failed to prepare customer reserve computations and failed to maintain a special reserve bank account for the exclusive benefit of customers. In addition, Biremis placed thousands of short sale orders, which was in violation of an emergency order issued by the SEC that temporarily banned short selling in certain securities. Also, between at least April 2008 and May 2009, Biremis improperly calculated its net capital, operating in net capital deficiency by up to $25 million. Additionally, the firm failed to maintain all required emails and instant messages over a five-year period.

      In concluding this settlement, Biremis and Mr. Beck neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.

      FINRA’s investigation was conducted by the Departments of Market Regulation and Enforcement. Seth Levy and Mark Dorsey conducted the investigation for the Department of Market Regulation. Conway Lee and Jessica Dennehy conducted the investigation for the Department of Enforcement.

      Investors can obtain more information about, and the disciplinary record of, any FINRA-registered broker or brokerage firm by using FINRA’s BrokerCheck. FINRA makes BrokerCheck available at no charge. In 2011, members of the public used this service to conduct 14.2 million reviews of broker or firm records. Investors can access BrokerCheck at http://www.finra.org/brokercheck or by calling (800) 289-9999. Investors may find copies of this disciplinary action as well as other disciplinary documents in FINRA’s Disciplinary Actions Online database.

      FINRA, the Financial Industry Regulatory Authority, is the largest independent regulator for all securities firms doing business in the United States. FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services. FINRA touches virtually every aspect of the securities business – from registering and educating all industry participants to examining securities firms, writing rules, enforcing those rules and the federal securities laws, informing and educating the investing public, providing trade reporting and other industry utilities, and administering the largest dispute resolution forum for investors and firms. For more information, please visit http://www.finra.org.
      .Sitemap Privacy Legal ©2012 FINRA. All rights reserved. FINRA is a registered trademark of the Financial Industry Regulatory Authority, Inc.

    16. yildizname says:

      hello nice blog nice blog

      • Anonymous says:

        The transcript shows systematic corruption. Byrne was right all along.

        http://media.economist.com/sites/default/files/pdfs/Plaintiffs%20Opp%20to%20MSJ.pdf

        A September 2006 telephone transcript between Merrill executive Collin Carrico and a client containts a discussion by Carrico about how a trader could do non-market trades within a market making account, which is illegal, but would never get caught, and discusses strategies to carry out this illegal activity.

        Ex. 123 to Sommer MSJ Decl.: This email from a DSEC executive exclaims that short sales amount to 107% of the float of Overstock

        Ex. 167: In this email, a Goldman Sachs executive states: “[P]er Les Nelson, we have to be careful not to link locates to fails [because] we have told the regulators we can’t”

        Ex. 177 to Sommer MSJ Decl.: In this email chian, a SIFMA lobbyist emails a Goldman Sachs executive and explains how to engage an expert that would otherwise wor for “our more powerful enemies,” meaning Overstock: “[H]e should be someone we can work with, especially if he sees that cooperation results in resources, both data and funding; while resistance results in isolation.”

      • Kilroy.Killbasher says:

        Gary Weiss has been caught with his pants down and is flailing. Period.

    17. Patrick Byrne: I have been chasing public corporation fraud for over twenty years as you well know!THE TURTLE RIDES THE TURTLES BACK!

      Marv Eatinger

      —–Original Message—–
      From: Marv Eatinger
      To: dubcongress ; hawkeD
      Sent: Wed, Jul 25, 2012 6:46 pm
      Subject: THE SYSTEM-POLITICS-THE RULE OF LAW-DEMOCRATIC CAPITALISM-YOU NAME IT!!!!!!!!!!!!!

      Dan Hawke:

      Do not ever forget Mario V. Mirabelli Senior Counsel for Patton Boggs LLP. His relationship with Daleco Resources Corp and Coopers & Lybrand made it possible for Daleco Resources Corp, Dov Amir, Louis Erlich, Daleco Partnership etc.

      AMIROIL INTERNATIONAL

      DOV AMIR

      President

      NORDAL OIL CO.

      COAST EXPLORATION COMPANY

      LOUIS ERLICH

      President

      LYNNE OIL CO.

      to circumvent SEC scrutiny and IRS scrutiny (IRS CLAIM NO. 95-52791-1) and steal at least $30,000,000 worth of Daleco Resources Corp assets, and “evade” paying taxes on the sale of these assets! Unfortunately this is only the tip of the iceberg! See all of my many certified letters and emails to the Federal Government over the last 23 years!

      Marv Eatinger

      Employment History- Mario V. Mirabelli

      Period

      Employer

      Title

      Additional Info

      2000-

      Patton Boggs LLP
      Revolving Door Personnel: (167)

      Partner

      Firm lobbying profile

      1992-1999

      Baker & Hostetler
      Revolving Door Personnel: (35)

      Partner

      Firm lobbying profile

      1978-1992

      Shea & Gould
      Revolving Door Personnel: (1)

      Managing Partner

      1969-1973

      Securities & Exchange Commission
      Revolving Door Personnel: (116)

      Trial Attorney

      Agency lobbying profile

      1967-1969

      Federal Trade Commission
      Revolving Door Personnel: (101)

      Trial Attorney

      Agency lobbying profile

      Lobbying Firm Private Sector Federal Govt. State/Local Govt.

      For registered lobbyists, employment histories may be incomplete prior to 1998 because the Senate Office of Public Records does not make registrations and reports available electronically for those years.

    18. Dan Hawke:

      Press Release: Daniel M. Hawke Named District Administrator of the …

      http://www.sec.gov/news/press/2006/2006-49.htm

      Apr 6, 2006 – “Dan Hawke will be an outstanding leader of the SEC’s Philadelphia office,” said SEC Chairman Christopher Cox. “He has proven himself as a …

    19. Note that I eliminated the body of the Gary Weiss article linked to above. Anyone who wants to read that twit’s on things can go to Barrons and read it.

      Patrick

    20. Kilroy.Killbasher says:

      Gary Weiss is a shill for NSS machine. What else would you expect from a miscreant abettor. He’s finding it harder and harder to hold his position. Now, he’s admitting there’s a naked shorting problem when before he denied it ever existed. Now, he’s just pointing fingers at the “clients” he doesn’t represent IMHO.

    21. Anonymous says:

      Patrick!

      What about moving Deep Capture under Overstock.com’s social/corporate responsibility branch with Worldstock?

      Also — DeepCapture will get more publicity as the value of Overstock.com rises. Where is a good place for DC fans to put in suggestions for Overstock?

    22. Virgil says:

      Saved as a favorite, I love your blog!

      • Anonymous,

        Thanks for the suggestion, but I think it best to let the corporate form reflect the reality, which is that Overstock and DeepCapture are largely unrelated (other than that they are the two ways I spend a lot of my time).

        Thanks for reading,
        Patrick

    23. Ano says:

      FBI operation targets Steven Cohen, Daniel Loeb.

      Steven Cohen and Daniel Loeb are both having cases built against them by the FBI for financial crimes including insider trading. I would bet on the FBI is having trouble establishing “smoking gun” evidence although circumstantial evidence of their criminal activity abounds.

      http://fordhamcorporatecenter.org/2012/03/07/greed-is-not-good-fbi-steps-up-attack-on-insider-trading/
      http://www.integrity-research.com/cms/2012/02/29/five-more-years-of-insider-trading-cases-according-to-fbi/

      Does anyone have links to the primary sources?

      When will DC start an article, section, or tab with comment section dedicated to following operation “Perfect Hedge”?

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