August 2024 - cypherpunks - lists.cpunks.org

Former U.S. Labor Secretary Says Billionaires Have No Right to Exist Because their Wealth Comes from Five Illegal or Bad Practices
by Gunnar Larson 09 Aug '24

09 Aug '24

https://wallstreetonparade.com/2024/08/former-u-s-labor-secretary-says-bill… By Pam Martens and Russ Martens: August 7, 2024 ~ Robert B. Reich, the former U.S. Labor Secretary under President Bill Clinton, a bestselling author and Professor Emeritus at UC Berkeley, penned an essay in May on why billionaires should not exist. Reich declares that there are only five ways someone can become a billionaire. (Reich narrates his essay in the video below, complete with cool graphics.) Reich lists the following five methods of becoming a billionaire: (1) exploit a monopoly; (2) exploit inside information; (3) buy off politicians; (4) defraud investors; (5) get money from rich relatives. You are likely thinking that there is nothing wrong with inheriting wealth from a rich relative. But if the money is inherited from a billionaire relative, it means that he or she likely got that wealth through one of the first four methods. Thus, dirty money is simply moving from generation to generation. That’s our thought; Reich has other thoughts on the matter involving the wealthy using tax loopholes “lobbied for by the wealthy.” Another way to think about that is the reality that the old Mellon bank wealth, a chunk of which was handed down to Tim Mellon, enabled him to write a check for $50 million in May to a Super PAC supporting Donald Trump for President. That check came on top of tens of millions more that Mellon had already contributed to the same Super PAC in this election cycle. And, it was billionaires who pushed for and won the Citizens United decision in 2010 at the corrupted U.S. Supreme Court that made that $50 million political donation possible from one man. Super PACs are also a key source of the hate and divisiveness that has engulfed the United States since the ironically-named Citizens United decision was handed down in 2010 because these Super PACs strategically run hateful attack ads against the opponents of the candidate they wish to install in public office. But what we really want to focus on is how the repeal of the Glass-Steagall Act in 1999 by a fat cat on Wall Street, together with sycophants in President Bill Clinton’s administration, and cheerleading from the New York Times’ Editorial Board, has created a whole new method of becoming a billionaire without any risk of jail time, while undermining the safety and soundness of the U.S. financial system. We’re talking about obscene stock option compensation at the megabanks on Wall Street. The repeal of the 1933 Glass-Steagall Act in 1999 allowed the trading casinos on Wall Street to merge with deposit-taking commercial banks – a practice which had been banned for 66 years because it was responsible for the 1929 stock market crash, thousands of insolvent banks, and ensuing Great Depression. Just nine years after the repeal of the Glass-Steagall Act, Wall Street collapsed in the worst crisis since the Great Depression, taking the U.S. economy and housing market along for the ride. The chief architect of the repeal of Glass-Steagall, Sandy Weill, was still listed as a billionaire by Forbes as of three years ago. This is how he became a billionaire: Despite it being illegal at the time, in 1998 Weill combined his Travelers Group with Citicorp, the parent of the federally-insured commercial bank, Citibank. Travelers Group consisted of a large insurance company, an investment bank (Salomon Brothers) and a retail brokerage firm, Smith Barney. It would become the first of the megabanks (“universal banks”) on Wall Street. The New York Times’ Editorial Board heralded the illegal and dangerous combination with this on April 8, 1998: “Congress dithers, so John Reed of Citicorp and Sanford Weill of Travelers Group grandly propose to modernize financial markets on their own. They have announced a $70 billion merger — the biggest in history — that would create the largest financial services company in the world, worth more than $140 billion… In one stroke, Mr. Reed and Mr. Weill will have temporarily demolished the increasingly unnecessary walls built during the Depression to separate commercial banks from investment banks and insurance companies.” The Bill Clinton administration repealed the Glass-Steagall Act the following year and handed Weill a pen from signing the repeal legislation into law. Weill became the surviving Chairman and CEO of Citigroup after he eventually pushed Reed out. Weill amassed a fortune from the bank through a technique that compensation expert Graef “Bud” Crystal called the Count Dracula stock option plan. You couldn’t kill it; not even with a silver bullet. Nor could you prosecute it, because Citi’s Board of Directors gullibly signed off on it. The plan worked as follows: every time Weill exercised one set of stock options, he got a reload of approximately the same amount of options, regardless of how many frauds the bank had been charged with during that year. Crystal detailed in an article for Bloomberg News that between 1988 and 2002, Weill “received 96 different option grants” on an aggregate of $3 billion of stock. Crystal says “It’s a wonder that Weill had time to run the business, what with all his option grants and exercises. In the years 1996, 1997, 1998 and 2000, Weill exercised, and then received new option grants, a total of, respectively, 14, 20, 13 and 19 times.” By the time Weill stepped down as CEO in 2003, he had received over $1 billion in compensation, the majority of it coming from his reloading stock options. (Weill remained as Chairman of Citigroup until 2006.) One day after stepping down as CEO, Citigroup’s Board of Directors permitted Weill to sell back to the corporation 5.6 million shares of his stock for $264 million. This eliminated Weill’s risk that his big share sale would drive down his own share prices as he was selling. The Board negotiated the price at $47.14 for each of Weill’s shares. Three years after Weill stepped down as Chairman, Citigroup’s stock was trading at 99 cents as the bank was being propped up with what would become $2.5 trillion in secret revolving loans from the Federal Reserve, according to an audit released in 2011 by the Government Accountability Office. To window dress the share price of Citigroup for beleaguered shareholders after the financial crisis, the bank did a 1-for-10 reverse stock split on May 9, 2011. (For each 100 shares of stock, the shareholder was left with just 10 shares.) While Weill has lived the fat cat life with mansions on both coasts, Citigroup’s long-term shareholders have been on a dismal journey as has the U.S. banking system. (See Former New York Fed Pres Bill Dudley Calls This the First Banking Crisis Since 2008; Charts Show It’s the Third.) Jamie Dimon, who had been Weill’s first lieutenant at Citigroup, is the Chairman and CEO of the largest megabank in the U.S. – JPMorgan Chase. He has become a billionaire on his bank’s stock option compensation as well. And while other CEOs at the megabanks may not make it to billionaire status, they are becoming obscenely rich despite their banks needing repeated bailouts from the Fed. As Louis Brandeis said: “We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both.”

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Testimony of 3 Experts Limited In PNC's TM Suit Against Plaid
by Gunnar Larson 09 Aug '24

09 Aug '24

Testimony of 3 Experts Limited In PNC's TM Suit Against Plaid <https://www.law360.com/fintech/articles/1867858?nl_pk=d2b3e7ef-ab62-4a62-80…> By P.J. D'Annunzio A Pennsylvania federal judge has approved several suggested expert witnesses but limited the testimony of others in PNC Financial Services Group's trademark infringement lawsuit against Plaid Inc. claiming the company copied its logo and login screens when linking bank accounts to financial apps. Decision attached | Read full article » <https://www.law360.com/fintech/articles/1867858?nl_pk=d2b3e7ef-ab62-4a62-80…> | Save to favorites » <https://www.law360.com/fintech/articles/1867858?nl_pk=d2b3e7ef-ab62-4a62-80…>

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Crypto Co. Owes NBA's Pelicans $400K Over Sponsorship Deal
by Gunnar Larson 09 Aug '24

09 Aug '24

Crypto Co. Owes NBA's Pelicans $400K Over Sponsorship Deal <https://www.law360.com/fintech/articles/1867753?nl_pk=d2b3e7ef-ab62-4a62-80…> By Emilie Ruscoe Cryptocurrency mining company PrimeBlock owes the NBA's New Orleans Pelicans $400,000 with interest after failing to hold up its end of a sponsorship agreement, a New Orleans federal judge has ruled. Order attached | Read full article » <https://www.law360.com/fintech/articles/1867753?nl_pk=d2b3e7ef-ab62-4a62-80…> | Save to favorites » <https://www.law360.com/fintech/articles/1867753?nl_pk=d2b3e7ef-ab62-4a62-80…>

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Delta's Boies Attys Slam CrowdStrike's 'Blame The Victim' Ploy
by Gunnar Larson 09 Aug '24

09 Aug '24

Delta's Boies Attys Slam CrowdStrike's 'Blame The Victim' Ploy <https://www.law360.com/governmentcontracts/articles/1868027?nl_pk=4126fe73-…> By Linda Chiem Delta Air Lines' attorneys at Boies Schiller Flexner LLP on Thursday blasted CrowdStrike's "blame the victim" defense over last month's catastrophic global IT outage, and pledged to haul both the cybersecurity firm and Microsoft to court to recoup what Delta estimates to be over $500 million in revenue losses. 2 documents attached | Read full article » <https://www.law360.com/governmentcontracts/articles/1868027?nl_pk=4126fe73-…> | Save to favorites » <https://www.law360.com/governmentcontracts/articles/1868027?nl_pk=4126fe73-…>

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Watchdog Says Murky Goals, Boeing Hinder NASA Rocket
by Gunnar Larson 09 Aug '24

09 Aug '24

Watchdog Says Murky Goals, Boeing Hinder NASA Rocket <https://www.law360.com/governmentcontracts/articles/1867874?nl_pk=4126fe73-…> By Daniel Wilson NASA's $5 billion moon rocket project faces ongoing delays and cost overruns due to issues such as the agency dragging its feet on setting clear goals and quality control problems at key contractor Boeing, according to a report released Thursday. Report attached | Read full article » <https://www.law360.com/governmentcontracts/articles/1867874?nl_pk=4126fe73-…> | Save to favorites » <https://www.law360.com/governmentcontracts/articles/1867874?nl_pk=4126fe73-…>

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Funder Nera Capital Buys 50,000 Spanish Car Cartel Claims
by Gunnar Larson 09 Aug '24

09 Aug '24

Funder Nera Capital Buys 50,000 Spanish Car Cartel Claims <https://www.law360.com/competition/articles/1867178?nl_pk=6416fd97-1dc4-4e0…> By William Janes Litigation funder Nera Capital has bought 50,000 claims for compensation valued at an estimated €1 billion ($1.1 billion) over a Spanish auto cartel involving many of the largest vehicle manufacturers in the world, including General Motors and Honda. Read full article » <https://www.law360.com/competition/articles/1867178?nl_pk=6416fd97-1dc4-4e0…> | Save to favorites » <https://www.law360.com/competition/articles/1867178?nl_pk=6416fd97-1dc4-4e0…>

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2 States Eyeing Mark Cuban-Backed App's Cash Advances
by Gunnar Larson 09 Aug '24

09 Aug '24

2 States Eyeing Mark Cuban-Backed App's Cash Advances <https://www.law360.com/banking/articles/1867583?nl_pk=feb6bbba-7878-4d39-be…> By Brian Steele Dave Inc., the maker of a digital banking app backed by billionaire Mark Cuban, is facing scrutiny from Maryland and Connecticut regulators in the wake of recent state efforts to treat paycheck advance products more like small-dollar loans, the financial technology company has told investors. 3 documents attached | Read full article » <https://www.law360.com/banking/articles/1867583?nl_pk=feb6bbba-7878-4d39-be…> | Save to favorites » <https://www.law360.com/banking/articles/1867583?nl_pk=feb6bbba-7878-4d39-be…>

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Tesla Shareholder Attys Seek Merger Of Twitter, Other Suits
by Gunnar Larson 09 Aug '24

09 Aug '24

Tesla Shareholder Attys Seek Merger Of Twitter, Other Suits <https://www.law360.com/delaware/articles/1867955?nl_pk=8f2e5a76-bb66-462b-a…> By Jeff Montgomery Two Tesla stockholder attorney teams have asked Delaware's Court of Chancery to consolidate three derivative suits challenging billions of dollars' worth of stock moves by Elon Musk and other actions in connection with his Twitter purchase, his artificial intelligence venture and alleged insider trading. 2 documents attached | Read full article » <https://www.law360.com/delaware/articles/1867955?nl_pk=8f2e5a76-bb66-462b-a…> | Save to favorites » <https://www.law360.com/delaware/articles/1867955?nl_pk=8f2e5a76-bb66-462b-a…>

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Investors, Banks Pitch Next Steps In Saved Bond-Rigging Suit
by Gunnar Larson 09 Aug '24

09 Aug '24

Investors, Banks Pitch Next Steps In Saved Bond-Rigging Suit <https://www.law360.com/cybersecurity-privacy/articles/1867765?nl_pk=3dfd2fd…> By Katryna Perera Investors accusing major banks of conspiring to rig corporate bonds have told a New York federal court they want to file a new complaint after the Second Circuit revived the suit last month over a potential conflict with the previous judge, while the defendants say this would take the case "back to square one." Letter attached | Read full article » <https://www.law360.com/cybersecurity-privacy/articles/1867765?nl_pk=3dfd2fd…> | Save to favorites » <https://www.law360.com/cybersecurity-privacy/articles/1867765?nl_pk=3dfd2fd…>

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50 Cent Beats Liquor Consultant's 'Ridiculous' Wiretap Claim
by Gunnar Larson 09 Aug '24

09 Aug '24

50 Cent Beats Liquor Consultant's 'Ridiculous' Wiretap Claim <https://www.law360.com/legalethics/articles/1867767?nl_pk=153d4a8a-6fb9-4a5…> By Rachel Scharf A frustrated New York state judge on Thursday tossed a former Beam Suntory Inc. sales contractor's reworked wiretapping allegations against rapper Curtis "50 Cent" Jackson in a $3 million embezzlement dispute, calling the claims "ridiculous" and an "obvious" delay tactic. Read full article » <https://www.law360.com/legalethics/articles/1867767?nl_pk=153d4a8a-6fb9-4a5…> | Save to favorites » <https://www.law360.com/legalethics/articles/1867767?nl_pk=153d4a8a-6fb9-4a5…>

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