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Conspiracy of Banks Rigging States Came With Crash

Posted By admin On May 18, 2010 @ 7:50 am In Money Watch | Comments Disabled

Martin Z. Braun and William Selway
Bloomberg [1]
May 18, 2010

A telephone call between a financial adviser in Beverly Hills and a trader in New York was all it took to fleece taxpayers on a water-and-sewer financing deal in West Virginia. The secret conversation was part of a conspiracy stretching across the U.S. by Wall Street banks in the $2.8 trillion municipal bond market.

The call came less than two hours before bids were due for contracts to manage $90 million raised with the sale of West Virginia bonds. On one end of the line was Steven Goldberg, a trader with Financial Security Assurance Holdings Ltd. On the other was Zevi Wolmark, of advisory firm CDR Financial Products Inc. Goldberg arranged to pay a kickback to CDR to land the deal, according to government records filed in connection with a U.S. Justice Department indictment of CDR and Wolmark.

West Virginia was just one stop in a nationwide conspiracy in which financial advisers to municipalities colluded with Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co., Lehman Brothers Holdings Inc., Wachovia Corp. and 11 other banks.

They rigged bids on auctions for so-called guaranteed investment contracts, known as GICs, according to a Justice Department list that was filed in U.S. District Court in Manhattan on March 24 and then put under seal. Those contracts hold tens of billions of taxpayer money.

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[1] Bloomberg: http://www.bloomberg.com/apps/news?pid=20601109&sid=axH24KWxjVDE&pos=10

[2] Image: http://www.homegain.com/housead/homes_for_sale/index?entryid=11502

[3] JPMorgan, Lehman, UBS Named in Bid-Rigging Conspiracy: http://www.prisonplanet.com/jpmorgan-lehman-ubs-named-in-bid-rigging-conspiracy.html

[4] Investigators Are Closing In On Two Other Banks Involved In LIBOR Rigging: http://www.prisonplanet.com/investigators-are-closing-in-on-two-other-banks-involved-in-libor-rigging.html

[5] Europe, UK central banks shore up markets reeling from Lehman Brothers’ crash: http://www.prisonplanet.com/europe-uk-central-banks-shore-up-markets-reeling-from-lehman-brothers%e2%80%99-crash.html

[6] Banks Bailed Out By American Taxpayers Are Paying Us Back By Shorting Our States and Cities: http://www.prisonplanet.com/banks-bailed-out-by-american-taxpayers-are-paying-us-back-by-shorting-our-states-and-cities.html

[7] Banks With 20% Unpaid Loans at 18-Year High Amid Recovery Doubt: http://www.prisonplanet.com/banks-with-20-unpaid-loans-at-18-year-high-amid-recovery-doubt.html

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