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Gary Aguirre Major Source in Taibbi Blockbuster

Matt Taibbi, who writes for Rolling Stone, has become one of the most outspoken critics of Wall Street -- and also one of the most incisive writers on the topic. His blistering article dated Feb. 16 is titled "Why Isn't Wall Street in Jail? Financial crooks brought down the world economy -- but the feds are doing more to protect them than to prosecute them." That has been a theme of San Diego's Gary Aguirre for some time. Taibbi's article, in fact, tells the story of how Aguirre, an investigator for the Securities and Exchange Commission, tried to pursue an insider trading case, but the person he wanted to interview was one of Wall Street's biggest honchos. Aguirre got fired. Two Congressional committees and the SEC's own in-house investigator studied the matter, vindicating Aguirre and slamming the SEC. Finally, the SEC paid Aguirre $755,000, but its own people weren't even reprimanded to their slimy roles in protecting the honcho. I have been reporting this story for the Reader since mid-2006.

Taibbi then taps Aguirre for an even more shocking tale of the cozy relationship among the SEC, Department of Justice, Wall Street law firms, and the crooks the law firms represent. As Aguirre has always said, the SEC was set up to protect the public from Wall Street, and it now protects Wall Street from the public. Taibbi, quoting Aguirre, tells about a conference in New York Nov. 12 attended by 1500 leading securities lawyers as well as the top brass from the SEC and the Justice Department. Taibbi quotes Aguirre on how an SEC official told the attorneys that the SEC would be a middleman between firms like AIG and Lehman Brothers and the Justice Department. Essentially, the SEC would help the law firms negotiate fines so that the crooks could buy their way out of serving time in jail.

A big securities crook paying a $100,000 fine, or even $5 million fine for participation in a swindle is a bit like you paying a 50 cent fine for killing three people with your car after you careened down the road in a drunken stupor. Here's how Aguirre sums it up in Taibbi's article: "First, the SEC and Wall Street player make an agreement on a fine that the player will pay the SEC. Then the Justice Department commits itself to pass, so that the player knows he's 'safe.' Third, the player pays the SEC -- and fourth, the player gets a pass from the Justice Department."

Great country, isn't it?

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Matt Taibbi, who writes for Rolling Stone, has become one of the most outspoken critics of Wall Street -- and also one of the most incisive writers on the topic. His blistering article dated Feb. 16 is titled "Why Isn't Wall Street in Jail? Financial crooks brought down the world economy -- but the feds are doing more to protect them than to prosecute them." That has been a theme of San Diego's Gary Aguirre for some time. Taibbi's article, in fact, tells the story of how Aguirre, an investigator for the Securities and Exchange Commission, tried to pursue an insider trading case, but the person he wanted to interview was one of Wall Street's biggest honchos. Aguirre got fired. Two Congressional committees and the SEC's own in-house investigator studied the matter, vindicating Aguirre and slamming the SEC. Finally, the SEC paid Aguirre $755,000, but its own people weren't even reprimanded to their slimy roles in protecting the honcho. I have been reporting this story for the Reader since mid-2006.

Taibbi then taps Aguirre for an even more shocking tale of the cozy relationship among the SEC, Department of Justice, Wall Street law firms, and the crooks the law firms represent. As Aguirre has always said, the SEC was set up to protect the public from Wall Street, and it now protects Wall Street from the public. Taibbi, quoting Aguirre, tells about a conference in New York Nov. 12 attended by 1500 leading securities lawyers as well as the top brass from the SEC and the Justice Department. Taibbi quotes Aguirre on how an SEC official told the attorneys that the SEC would be a middleman between firms like AIG and Lehman Brothers and the Justice Department. Essentially, the SEC would help the law firms negotiate fines so that the crooks could buy their way out of serving time in jail.

A big securities crook paying a $100,000 fine, or even $5 million fine for participation in a swindle is a bit like you paying a 50 cent fine for killing three people with your car after you careened down the road in a drunken stupor. Here's how Aguirre sums it up in Taibbi's article: "First, the SEC and Wall Street player make an agreement on a fine that the player will pay the SEC. Then the Justice Department commits itself to pass, so that the player knows he's 'safe.' Third, the player pays the SEC -- and fourth, the player gets a pass from the Justice Department."

Great country, isn't it?

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Comments
22

Dylan Ratigan did his entire show on this issue today-and credited Taibbi.

Taibbi also did a veyr well written write up on Goldman Sachs... a year or two ago. Guy is smart.

Feb. 17, 2011

I didn't know about Ratigan's TV show today. I do know about Taibbi's great and groundbreaking piece on Goldman Sachs. Best, Don Bauder

Feb. 17, 2011

Why Isn't Wall Street in Jail?Financial crooks brought down the world's economy — but the feds are doing more to protect them than to prosecute them

By Matt Taibbi February 16, 2011 9:00 AM ET

. http://www.rollingstone.com/politics/news/why-isnt-wall-street-in-jail-20110216?page=1 .

Feb. 17, 2011

Appreciate the post. Best, Don Bauder

Feb. 18, 2011

Hmmmm, very interesting. I knew Sd was an epicenter for alot of this evil. I bet the road will lead to Bank of America since the city does most of its financing through them and most of these "affordable housing" projects are funded by them. They need to write billions of dollars in fraudulant bonds. there is alot of chatter about the bond market and the lack of oversight or accurate info.

BTW Don, did you see how the city of SD is scrambling to lock up 4 billion dollars in redevelopment projects before March 1st in case the Gov shuts it down. Its absolutely disgusting and someone has got to stop it. I was so appalled I went out today w/ my camera so I could take pics of a model award winning redevelopment project so people can see what we are about to get everywhere.

Feb. 17, 2011

You make two excellent points: 1. Bank of America's close financing ties to SD are suspect, particularly the refinancing of the ballpark bonds, which were owned by Merrill Lynch, now part of B of A. 2. Yes, San Diego's rush to wrap up redevelopment projects before the governor's initiative passes is disgusting. Hopefully, somebody can go to jail over it. I won't cite their names here. Trouble is, other cities are doing the same thing. Hopefully, that which is done in haste -- and possibly illegally -- can be undone. Best, Don Bauder

Feb. 18, 2011

BTW Don, did you see how the city of SD is scrambling to lock up 4 billion dollars in redevelopment projects before March 1st in case the Gov shuts it down

LA Times has a story out this morning on how these agencies are just muni slush funds, fronts to funnel money into salary and benefits that is SUPPOSED to come from the general fund, not earmarked funds;

Funds intended to fight blight used to pay city salaries

By Jessica Garrison

Some California municipalities are skirting the law and drawing on funds earmarked for economic development to meet payroll demands

. http://www.latimes.com/ .

Feb. 18, 2011

Oh wow, it just keeps getting more interesting. I have always believed all the fraud was all rooted in housing. After all a mortgage is someone pledging to give you their labor for the next 30 years of their life. What other financial instrument pays you now for someones labor for 30 years into the future. That is very powerful.

God I hope Brown plows through all the fraud quickly and does not allow any of this scrambling to happen.

I bet anything San diego is using Redevelopment funds to pay salaries.

Feb. 18, 2011

Afterall look at how fast they got Atkins to be majority WHIP. she is the queen of redevelopment fraud, even making a business of showing developers how to do it. And its not like she was super popular. he had a meager 17000 votes and now she runs California.

Feb. 18, 2011

Here is the award Winning project. I went there today and low and behold there was a homeless guy sleeping in front of the empty commercial anchor store that has remained empty for years now despite the project being fully operational since 2006. It appears to me that the units are mostly empty judging by the fact that for the past 3 years I have been driving by at night and it remains in almost complete darkness.

At any rate, I think that there was a tremendous amount of mortgage fraud where units were sold to non-existent buyers or ghost buyers. I used to work next to these lenders and they told us they pulled this scam of getting people w/ horrible credit and getting them huge loans for condos. They and the buyer knew they would intentionally default. They both made of w/ 10s of 1000s. Now obviously banks aren't dumb, they would never loan $500,000 to someone if they thought they couldnt pay it back....unless they knew there would be a bailout and unless they had a tool like a derivative where they could break that loan up into a 1000 pieces and no one could ever trace it. I suspect this is what B of A did. They played along and encouraged the fraud because they knew they would never be caught.

Feb. 17, 2011

Are you sure bankers aren't dumb? Look how their stupidity -- and corruption -- led the world off the cliff in the 2007-2009 period. Best, Don Bauder

Feb. 18, 2011

Actually, no I absolutely dont think they are dumb. I think the robo-signing was all planned so that when all this mortgage fraud happened they could say "oh well we were victims of our own scam", instead of being held accountable because they intentionally participated in the fraud.

Derivatives were created so that the bankers could cover their crimes and not be held accountable. So all these fraudulant mortgages that they supposedly accidentally wrote were repackaged as derivatives and now are in a million pieces. And now they can say "oops, we have no idea where all the money is".

Most people dont understand that we are on the hook for 23.7 TRILLON dollars in derivatives. The banking meltdown was all coordinated not to get the 750 billion but to change the rules and to put the taxpayer on the hook for these trillions instead of them.

I like Matt Tabaii, but my issue w/ him is that #1: he was a little late in his assessment. Even I could grasp at some level the fraud that was happening and was happening intentionally not as a result of incompetence and I could not believe no one was talking about it. Have you ever heard Catherine Austin Fitz? She is a wonderful whistleblower that worked for Bush 41 and was in charge of HUD. She has been speaking out about this for years and years and points to the fact that the fraud all centers around the housing market.

2: my issue w/ Matt is that he thinks all this fraud was accidental and not carefully choreographed and its just a bunch of bumbling idiots. Even Madoff said that there is no way the banks didnt know about all of the mortgage fraud.

Sure if the banks were actually being held accountable and allowed to fall I may believe they it wasnt intentional, but what is the 1st thing that happened when Lehman fell? The investment banks quickly became regular banks. Thats because they knew all of their bad bets would be covered and they would never be held accountable.

Feb. 18, 2011

I agree with you History-100%, I think Taibbi says essentially the exact same thing too.

Feb. 18, 2011

Actually Catherine Austin Fitts was Secretary of Housing under Bush. She has alot of street cred in terms of her experience and knowledge. You may really like this video called the "Looting of America". She believes this meltdown has been carefully coordinated.

http://www.youtube.com/watch?v=u9dGHuRExiM

Feb. 18, 2011

One of the few who have read "Griftopia" one notices Taibbi's bias immediately, like bringing in discussions of Republicans that have never been "East of Indianiapolis." Such arrogance, but I do understand that for many that then 12,000 acres that make up Manhattan are the center of the world. Taibbi's writings are well crafted abeit biased, and I enjoy reading them, although he's usually wrong, he's a nice guy. He does play very fast and loose with the facts.

Feb. 18, 2011

I haven't found inaccuracies, but I am open to hearing your views. Best, Don Bauder

Feb. 18, 2011

Taibbi's writings are well crafted abeit biased, and I enjoy reading them, although he's usually wrong, he's a nice guy. He does play very fast and loose with the facts.

============= Baloney, he is the one guy who will tell it straight.

Feb. 18, 2011

I agree with SurfPup. I think Taibbi is presenting the truth in a creative, readable way. Best, Don Bauder

Feb. 19, 2011

Matt ought to check out our fair city, as he'd have enough material for a series of books! It isn't called "Enron by the Sea" for nuthin'.

Here's a YouTube video link of Cenk Uygur interviewing Matt about his article: http://www.youtube.com/watch?v=eg3b6_6xlAs

Feb. 18, 2011

Great interview. Best, Don Bauder

Feb. 19, 2011

I agree. Taibbi could write a blockbuster about San Diego. Best, Don Bauder

Feb. 19, 2011

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