The Way We Are Screwed... And How Come Nobody Goes To Jail ???

[WillyT]

Morgan Stanley to pay $4.8 mln, no admission of wrongdoing

* Electricity price-fixing said to cost consumers $300 mln

* Justice Department: Pact sends message to banking industry

* Morgan Stanley declines to comment

By Jonathan Stempel - Reuters

<snip>

Aug 7 (Reuters) - A federal judge grudgingly approved Morgan Stanley's $4.8 million settlement of electricity price-fixing charges over activity estimated to have cost New York consumers about $300 million, turning aside claims by a major nonprofit that the accord let the bank off too easily.

The case, which also involved the electricity generator KeySpan Corp, was the first in which the U.S. Department of Justice said it tried to recover improper profit from a financial services company that used derivatives to foster anticompetitive behavior.

Morgan Stanley entered a swap agreement with KeySpan in 2006 that gave it a stake in revenue by Astoria Generating Co, which also operated in New York City. It also entered a related hedge with Astoria.

The government said the arrangement allowed KeySpan to withhold substantial electricity generating capacity from the market, driving prices higher for consumers, and generated $21.6 million of net revenue for Morgan Stanley.

U.S. District Judge William Pauley in Manhattan said he shared the concerns of state officials and the AARP, a nonprofit serving people 50 and older, that any settlement should have reflected the harm to consumers and forced Morgan Stanley to give up the $21.6 million.

"Given the government's stark allegations of manipulative conduct against Morgan Stanley, disgorgement of $4.8 million is a relatively mild sanction," Pauley wrote. "There is a risk that a large financial services firm like Morgan Stanley could view such a modest penalty as merely a cost of doing business.

"But despite this court's misgivings, the government's decision to settle for less than full damages is entitled to judicial deference, particularly in view of the novelty of the government's theory."

The judge also rejected the AARP argument that the $4.8 million be returned to consumers, in part because sending it instead to the U.S. Treasury served the public interest.

<snip>

More: http://in.reuters.com/article/2012/08/07/morganstanley-keyspan-antitrust-ruling-idINL2E8J7GL820120807

[KurtNYC]

1. Goldman too.

http://www.cbsnews.com/8301-505123_162-57490324/goldman-dodges-sec-bullet-over-bum-mortgage-deal/

eta: this is a big part of what is stopping the recovery and holding back investment and values. They need to restore integrity to the markets and the banks.

[MannyGoldstein]

2. Well, at least it sends a signal

"Make No Mistake: we got your back. Do whatever you want."

[DCKit]

3. And "Don't worry, the fines will never exceed a fraction of the illegal profits." nt

[MannyGoldstein]

4. "As long as we get our 25% cut, everything's cool." nt

[WillyT]

5. But Look At The Math ???

I know you know what I'm talking about, but...

* Taxpayers get screwed out of $300 Million

* Morgan Stanley/KeyStan/Astoria bank 21.6 Million

* Feds/Judge fine them 4.8 Million

Nobody goes to jail, New Yorker's get screwed, and the crooks net $16.8 Million AFTER FINES AND PENALTIES !!!

[MannyGoldstein]

6. I agree, it's astonishing

Yet totally business as usual. I wrote another post to call attention to yours: http://www.democraticunderground.com/10021102848

But folks seem to be so used to getting fucked that they just don't care any more. We're down to being thankful at the end of each day that we don't live in our cars; anything better is gravy.

[spike91nz]

8. The punishment must fit the crime

For a group that understands the world only in terms of pecuniary profits and losses, the penalty has to be greater than the profits or they will see the fine as only the cost of practicing "good business sense." If they make 300 million and it cost them 4.2 million there is a profit rewarding the behavior of 295.8 million. If you want them to stop, either put those responsible in prison for an extensive time, or fine them the profits made plus a serious penalty. As it stands, they can make a handsome profit from violating the laws and ignoring common human decency.

[HiPointDem]

9. 78% profit, not bad. lawsuits = part of the cost of doing crime, er, business.

[Octafish]

10. Department of Just Us.

Works for the 1-percent's 1-percent. Lovely families - a good small number of whom actually are citizens.

[Autumn]

11. I am so fucking pissed over this.

I have never been so disgusted in my life.

[woo me with science]

12. Have we had enough yet?

Is the real problem clear now, America?

Is the scenery falling down yet?

[1-Old-Man]

13. How come? Because Eric Holder couldn't find any wrongdoing worthy of his time

[Solly Mack]

14. and yet there will be those who call that "justice".

[woo me with science]

15. kick

[OnyxCollie]

16. K&R. nt

[woo me with science]

17. kick

[Quantess]

18. K & R