PRLog - Dec. 3, 2014 - CHICAGO -- Where's the SEC in the LIBOR scandal?
Now that FDIC, Fannie Mae and Freddie Mac have filed suit against The Panel Banks for rigging the LIBOR index, one can't help but ask the question "Where's the SEC during all of this?" After all, the LIBOR index is considered a security by many in the financial sector. It's sheer function whereby 16 of the world's largest banks were to submit to the LIBOR "clan" on a daily basis, an independent representation of what each of the 16 banks should charge others involving the U.S. dollar in monetary transactions for short-term loans, generally under one year. The median of that rate would then dictate what thousands of the banks in the world would lend dollars to each other, often in overnight, one month, three month or six month lending.
When the LIBOR scandal broke out in 2007 and 2008, it slowly became apparent that the 16 of the world's largest banks rigged the entire process and made enormous profit on daily swings of the LIBOR index by knowing and controling which direction the LIBOR index would move each and every day over the past 20 years.
What is clear is that litigation against The Panel Banks has been slow to come and that's been very puzzling for many. Several Federal agencies have jumped on the bandwagon to sue The Panel Banks but not Securities Exchange Commission. The question many are raising, if LIBOR index is a manipulated market index, why hasn't the SEC done anything about the scandal, let alone joined other Federal agencies in suing The Panel Banks? My efforts to reach the SEC for comment have gone futile and unanswered despite numerous calls. The standard canned response the SEC gives a caller is “write a letter and it will be responded to”. Large Federal agencies typically take the position that they don't comment on litigation. Well, thousands of borrowers that had mortgages tied to LIBOR index are waiting and wondering "where's the SEC and why have they not filed a securities manipulation and insider trading charges against The Panel Banks?"
Unlike the FDIC, the SEC has more prosecution manpower since it routinely files charges against the perpetrators in insider trading schemes and has a history of prosecuting insider trading schemes. One can't help but raise the question, are The Panel Banks perhaps too big to fail and, as typical of other Federal agencies, the government doesn't like to hit over the head of large corporations too much. The Federal government will take action to put smaller and medium sized corporations out of business but not giants, let alone giant banks and the public has seen this time and time over.
Like the FDIC with the handling of TARP money, the FDIC decided to bail out the largest banks but let the smaller and medium sized banks default so that the FDIC can take over their assets and sell them to successor banks for pennies on the dollar while the U.S. taxpayer foots the bill.
So are The Panel Banks too big to fail at the watchful eye of SEC, is that the real problem? Mr. Val Sklarov of BoutiqueBankLaw.com thinks that the SEC decided that if it's going to pursue a The Panel Banks, the scandal will get even larger with the possibility of The Panel Banks disgorging tens of billions of dollars. What will SEC do with all the money that they would recover? Would SEC decide to share with the general public or pay towards the Federal Deficit? Maybe the true reason as to why SEC has not pursued The Panel Banks is the concern of what will SEC do with all that money that it may collect and the Congress would try to grab from SEC. So one begs the question, "why should SEC prosecute The Panel Banks?" and maybe, just maybe, the SEC will uncover that The Panel Banks committed the largest securities fraud and insider trading in US history and the SEC can't bear such a discovery. So sometimes it's best to sit back and do nothing then for SEC to take down some of the world's largest banks.
These days Mr. Val Sklarov is president of BoutiqueBankLaw.com, an attorney referral agency that seeks out clients that have or had LIBOR-based mortgages or were wrongfully defaulted by a bank and are in need of a contingency fee attorney. He can be reached at Val@BoutiqueBankLaw.com
Keywords: Bank litigation, contingency attorney, contingency lawyer, FDIC Panel Banks, FDIC suit, LIBOR, LIBOR Fraud, LIBOR Manipulation, LIBOR Scandal, suing bank, The Panel Bank, wrongful foreclosure
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Where's the SEC in the LIBOR scandal?
December 03, 2014 at 16:59 PM EST
