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Thread: It's Open Season on All Customer Funds

  1. #1

    It's Open Season on All Customer Funds

    The judiciary agrees with CONgress and the George W. Obamney admin. Banks are first in line.

    IT'S OPEN SEASON ON ALL CUSTOMER FUNDS

    The NFA in collusion with the banksters, government and judiciary have achieved their goal. The entire concept of "customer segregated funds" is officially, completely, legally dead.

    Guys, it is OVER. I know that many of you are still cowering in normalcy bias, unable to deal with reality, unable to face the world as it is, but you have GOT to snap out of it. The marketplace is DESTROYED. You CANNOT be in these markets. All legal protections are now officially gone.

    Do you remember how I told you about the Ponzi scheme that imploded in 2007 called "Sentinel Management Group" that stole over $500 million in customer funds? The NFA was the auditing regulator of Sentinel, and the NFA admitted after the Sentinel Ponzi imploded that they signed off on their audits even though the NFA claimed not fully understanding Sentinel's books or accounting methods. In other words, the NFA didn't really audit Sentinel at all - they just PRETENDED to audit them, drew up some forms, had some robosigners sign off, and then just hoped that when the $#@! hit the fan, everyone in the industry would be so terrified of the NFA that no one would hold the NFA accountable for their criminal malfeasance - or even talk about it.

    Sentinel took customer segregated money and fraudulently used it as the collateral on a loan from Bank of New York Mellon for $312 million to fund their own in-house proprietary trading operations. When the Sentinel Ponzi collapsed, BNYM sued to go to the front of the line of creditors - ahead of the customers of Sentinel whose money was fraudulently used as collateral, which has now been "linguistically sanitized" into the word "hypothecated".

    The federal appeals court ruled yesterday that not only does BNYM stay at the front of the line, but that using customer segregated funds as collateral is NOT a crime, and that co-mingling customer segregated funds with proprietary funds is NOT fraud.

    Here is the Reuters piece.

    Read this quote from the ruling, which is, in essence, the entire financial market paradigm being guillotined:

    That Sentinel failed to keep client funds properly segregated is not, on its own, sufficient to rule as a matter of law that Sentinel acted ‘with actual intent to hinder, delay, or defraud' its customers.
    U.S. Circuit Judge John D. Tinder
    In other words, all customer funds in the United States are now the legal property of JP Morgan, Goldman Sachs, BNYM, or whichever megabank is the counterparty on the loans the FCM or depository institution takes out in order to fund its mega-levered proprietary in-house trading desks.

    For the love of God, I don't know what more there could possibly be to say to snap you people out of your normalcy bias trance. You have GOT to get ALL MONIES out of the financial system NOW. This ruling sets precedence for every depository institution, not just futures brokerages. It is now legal in the United States for any financial institution to steal customer funds, borrow money against those funds for the uber-levered proprietary trading use of the financial institution, and the customers have ZERO CLAIM TO THEIR OWN FUNDS once they are in the custody of the financial institution.

    The court has ruled that once your money passes out of your PHYSICAL POSSESSION, and I mean PHYSICAL possession, it is no longer yours, and you have no legal claim or legal recourse to it when it is stolen. This includes BANK ACCOUNTS. Money in a bank is in the possession of the BANK, not you. Do you comprehend this? The entire system is utterly devoid of any integrity or genuine security and is breaking down catastophically before our very eyes. You HAVE to comprehend that your money sitting in an account is no longer legally yours. You have to force your brain to process and comprehend this, no matter how incomprehensible it may seem. IT IS OVER. This is Marxist hell. We have arrived.

    This ruling and precedent will be used by every brokerage, every bank, every insurance company and every pension fund to deny you your money when the financial system finally collapses, be it on Monday, or be it two years from now.

    DO YOU UNDERSTAND?

    You have GOT to GET OUT.
    Reuters:

    A federal appeals court on Thursday upheld a ruling that puts Bank of New York Mellon ahead of former customers of Sentinel in the line of those seeking the return of money lost in the 2007 failure of the suburban Chicago-based futures broker.

    The appeals court affirmed an earlier district court ruling that the bank had a "secured position" on a $312 million loan it gave to Sentinel, which turned out to have been secured by customer money.

    Futures brokers are required to keep customers' funds in dedicated accounts to protect them from being used for anything other than client business.

    However, Thursday's ruling suggests that brokerages can use customer funds to pay off other creditors, Sentinel trustee Fred Grede told Reuters.

    "I don't think that's what the Commodity Futures Trading Commission had in mind" with its requirement that brokers keep customer money separate from their own, he said.

    "It does not bode well for the protection of customer funds."
    After trillions upon trillions in bailouts (and counting!), the court just gave them the OK to raid our funds. Precedent has been set.

    Mussolini must be so pleased.
    Based on the idea of natural rights, government secures those rights to the individual by strictly negative intervention, making justice costless and easy of access; and beyond that it does not go. The State, on the other hand, both in its genesis and by its primary intention, is purely anti-social. It is not based on the idea of natural rights, but on the idea that the individual has no rights except those that the State may provisionally grant him. It has always made justice costly and difficult of access, and has invariably held itself above justice and common morality whenever it could advantage itself by so doing.
    --Albert J. Nock



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  6. #5
    Letter From Satan: Dear Brother Corzine
    http://dailybail.com/home/letter-fro...r-corzine.html

    To be clear about my minions' fine work in punishing innocent account holders by rewarding evildoers with the contents of those accounts: the court freely acknowledges, in the 1st sentence of the opinion, that Sentinel's transfer of those accounts--to the Honorable Jon Corzine's colleagues at Bank of New York Mellon ("Bank")--was illegal.

    Clinging to the notion that the rule of law has any place in my Kingdom of Evil, the account holders tried to prove they were entitled to their own money, even after it was stolen, under a theory of "equitable subordination," under which Bank's claim to the purloined funds would have been subordinated to those naive account holders. Too succeed under the dead letter of law, the account holders had to prove that the Bank acted inequitably, that is, with conduct that was egregious.

    As a humorous demonstration of my raw dark power, I dispatched to court several officials of the Bank--all pathological liars--whose own email correspondence demonstrates to a certainty that they knew that the $300 million transferred could not possibly have belonged to Sentinel, but must instead have belonged to the fools banking there.

    Predictably, the Bank officials perjured themselves repeatedly at trial.

    It is on the following basis that I will appoint all three appellate court panel members to an Executive Suite in Hell. What follows is a perversion of justice so remarkably devious that I'm inclined to strike the judicial triumvirate dead this instant so that we may enjoy cocktails together before dining on slaughtered puppies this evening:

    "Instead of finding that their testimony justified a finding of egregious bank behavior, the district court essentially found that the bank officials were such artless liars that they couldn't have been concealing deliberate wrongdoing. Instead, the bank officials were simply trying to cover up their own incompetence."
    [...]
    P.S. - This court ruling is not good news for those who want to see you in prison...
    Based on the idea of natural rights, government secures those rights to the individual by strictly negative intervention, making justice costless and easy of access; and beyond that it does not go. The State, on the other hand, both in its genesis and by its primary intention, is purely anti-social. It is not based on the idea of natural rights, but on the idea that the individual has no rights except those that the State may provisionally grant him. It has always made justice costly and difficult of access, and has invariably held itself above justice and common morality whenever it could advantage itself by so doing.
    --Albert J. Nock

  7. #6
    LRC: Warning: Get Your Money Out: 'All Legal Bank Deposit Protections Are Now Officially Gone'

    Former money manager Ann Barnhardt, who in November of 2011 made the decision to cease operations of her brokerage firm and return funds to her customers citing “systemic” problems within the entire financial industry, has issued a new warning about the stability of US banks and the safety of individual deposit accounts.

    The warning, stemming from a recent federal appeals court ruling surrounding customer funds lost during the 2007 collapse of Chicago futures broker Sentinel, indicates that individuals who lose deposited funds because a financial institution improperly manages that money, even if those funds are supposed to be “segregated” from other operations of the firm, are essentially left with no recourse if the firm goes belly-up. According to the court, a misallocation of those customer funds, “is not, on its own, sufficient to rule as a matter of law that Sentinel acted ‘with actual intent to hinder, delay, or defraud’ its customers.”

    The implications of the ruling, according to Barnhardt, will affect the monies of all private individuals who have seen their deposit accounts wiped out in the collapse of firms like John Corzine’s MF Global and put all deposit account holders in the country at risk should their bank be faced with a financial windstorm
    [...]
    The ruling is specifically designed to protect large financial institutions that have (purposefully) mismanaged customer funds and used the hard-earned life savings of Americans to gamble on equities, commodities and bond markets. If those firms happen to make the wrong bet, as MF Global, Sentinel and a handful of others have recently done, depositors who have placed funds with the banks under the belief that their bank account is securely protected from trading liabilities are now completely exposed and liable for the incompetence and negligence of those who engage in market trading.

    This latest ruling combined with recent actions by the Federal Reserve and other government regulators suggests a massive fraud has taken place and the financial system itself is under extreme strain with the potential to make the financial collapse of 2007/2008 look like just a training exercise.

    In recent days, for example, it’s come to light that the government has secretly called on the country’s five major banks to prepare themselves for collapse by creating stress recovery plans to be used in the event of worst case scenarios.

    A few weeks ago, the Federal Reserve also implemented a new policy for money market funds held by financial institutions. Per the new policy, money market funds, which account for some $2.7 trillion in deposits across the United States, can be frozen in the event of an emergency or financial panic. This means that if and when the system does go into a tailspin, at exactly the time people will want to pull their money out of their bank account, they will be restricted from doing so.

    These latest actions by government regulators, judges and financial institutions point to one thing: that we have an unprecedented financial collapse in the making. If such a financial crisis comes to pass it is clear that the policies and procedures now in place will transfer the legally owned deposits and money market savings of individual Americans into the hands of the banks at which those funds are kept.

    Get Your Money Out.
    Based on the idea of natural rights, government secures those rights to the individual by strictly negative intervention, making justice costless and easy of access; and beyond that it does not go. The State, on the other hand, both in its genesis and by its primary intention, is purely anti-social. It is not based on the idea of natural rights, but on the idea that the individual has no rights except those that the State may provisionally grant him. It has always made justice costly and difficult of access, and has invariably held itself above justice and common morality whenever it could advantage itself by so doing.
    --Albert J. Nock

  8. #7
    Get Your Money Out.

    Money? What money??


    I'm married. I have no money!

  9. #8
    Take your money out and buy banking stocks!!!! They can't lose!!!!

    Just kidding.



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  11. #9
    THE VERDICT IS IN – WALL STREET HAS WON
    http://www.theburningplatform.com/?p=39301

    Read this article from Chris Whalen carefully. The Wall Street banks are free to steal your money. The legislative, judicial and executive branches of the United States government agree that this is OK. Goldman Sachs, Jon Corzine and a myriad of other sociopathic predators have already gotten away with it. Not one banker has gone to jail for the greatest control fraud in the history of mankind. On some future weekend your owners are going to pull the plug and steal all your money, and do it legally because they write and interpret the laws as they deem fit. Get your money out of the Wall Street banks ASAP.

    How Congress Helps the TBTF Banks Steal Your Money with Impunity

    There is a very important article on Jesse’s Cafe Americain blogspot, “Warren Pollock and Ann Barnhardt On the Increased Risk to Customers In the US Financial System,” that illustrates how the US bankruptcy laws now enable theft brazen theft of customer funds by the largest banks. I have written about this issue in the past on ZH, but Pollock and Barnhart really do a nice job of presenting the issue.

    http://jessescrossroadscafe.blogspot...teresting-dis…

    My friend and mentor Walker Todd of AIER, who worked as a legal counsel at the Federal Reserve Banks of New York and Cleveland, states the situation succinctly:

    “Basically, there is a new 7th Circuit opinion saying that there is no reason to impose a constructive trust on a lender’s takings of customers’ funds from client commodity firms that were used (inappropriately) to secure the firms’ borrowings, as long as the lender can say that it did not know WITH CERTAINTY that customers’ funds were being repledged. Negligence and misappropriation (vs. knowing criminal intent) are now a sufficient excuse for letting the lender keep the money and go to the head of the line for distributions in bankruptcies of the client commodity firms. Spread the word.”...
    Related: Bill Black On Wall Street Control Frauds and Moral Hazard

    Lack of Justice Department and regulatory prosecutions for Wall Street fraud creates incentives for more control frauds and climate of lawlessness.
    Based on the idea of natural rights, government secures those rights to the individual by strictly negative intervention, making justice costless and easy of access; and beyond that it does not go. The State, on the other hand, both in its genesis and by its primary intention, is purely anti-social. It is not based on the idea of natural rights, but on the idea that the individual has no rights except those that the State may provisionally grant him. It has always made justice costly and difficult of access, and has invariably held itself above justice and common morality whenever it could advantage itself by so doing.
    --Albert J. Nock

  12. #10
    So I'm thinking that since I'm belly up I'm not going to send the bank my mortgage check this next month and claim that they have no right to kick me out. Thats how it works right?



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