One who intends to leave others better off for his having existed.

11/25/14

Wells Fargo refused to provide Regulatory Correspondence

In the Matter of; George Hartzman, Complainant, v. Wells Fargo Advisors, LLC., Respondent, Case No. 2013-SOX-00045 with the United States Department of Labor, Office of Administrative Law Judges, presided over by Judge Kenneth A. Krantz, Wells Fargo refused to provide Regulatory Correspondence.

Request for Production of Documents 11; Regulatory Correspondence

Please provide discoverable documentation and communications from or to the Federal Reserve Board (FRB), the Financial Industry Regulatory Authority (FINRA), the Securities and Exchange Commission (SEC), the North Carolina Department of Insurance, the North Carolina Department of Justice, North Carolina’s Commissioner of Banks, the Federal Trade Commission, North Carolina's Secretary of State, Securities Division, The Financial Accounting Standards Board (FASB), the FBI and/or Department of Justice, the Consumer Financial Protection Bureau (CFPB), and/or the Public Company Accounting Oversight Board (PCAOB) concerning or related to George Hartzman's Wells Fargo whistleblower filings/ethics issues [between November 1, 2011 and December 31, 2013].

Respondent does not possess any responsive documents, 
because this request is directed and seeks information from third parties
and not Respondent, 
and because request does not seek information
relevant to Complainant's claims in this action.

Nevertheless, Respondent reserves the right 
to supplement its response to this request.

Gregory C. Keating and Benson Pope
Littler Mendelson
Then Wells Fargo Council
On July 18, 2014

A Thursday, June 19, 2014 letter to Respondent concerning deficient discovery responses stated;

"Request for Production #11. This Request seeks all correspondence between Respondent and numerous state and federal agencies that may have had a role in investigating Complainant’s reports of fraudulent and unlawful activity by Complainant.  You objected to this Request on the basis of attorney-client privilege and relevance.  However, Complainant’s reports to these agencies constitute protected activity and are the basis of this suit and are relevant to Complainant’s retaliation claim under the Sarbanes-Oxley Act.  How these agencies handled the complaints with respect to Respondent is very relevant to the case and Respondent’s motives and manner of dealing with Complainant thereafter.  Therefore, please supplement your Response accordingly.  If you contend that some or all of the documents requested in these Requests are attorney-client privileged, please provide Complainant with a privilege log identifying and detailing the same."
.
.
Both the listed regulators and Wells Fargo were in possession of information concerning George Hartzman’s whistleblowing activities, which were protected acts under Sarbanes Oxley, because it looks as though Wells Fargo was allowed/motivated to retaliate by non-action without regulatory consequence, which would be an adverse action and a motive to retaliate.

Wells Fargo refused to provide the discoverable, probative information.
.
.
Exhibit 1

"The "too big to fail" theory asserts that certain financial institutions are so large and so interconnected that their failure would be disastrous to the economy, and they therefore must be supported by government when they face difficulty.

Proponents of this theory believe that some institutions are so important that they should become recipients of beneficial financial and economic policies from governments or central banks...

Inability to prosecute

The political power of large banks and risks of economic impact from major prosecutions has led to use of the term "too big to jail" regarding the leaders of large financial institutions.

On March 6, 2013, United States Attorney General Eric Holder testified to the Senate Judiciary Committee that the size of large financial institutions has made it difficult for the Justice Department to bring criminal charges when they are suspected of crimes, because such charges can threaten the existence of a bank and therefore their interconnectedness may endanger the national or global economy.

"Some of these institutions have become too large,” Holder told the Committee, “It has an inhibiting impact on our ability to bring resolutions that I think would be more appropriate," contradicting earlier written testimony from a deputy assistant attorney general who defended the Justice Department’s "vigorous enforcement against wrongdoing." Holder has financial ties to at least one law firm benefiting from de facto immunity to prosecution, and prosecution rates against crimes by large financial institutions are at 20-year lows.

Four days later, Federal Reserve Bank of Dallas President Richard W. Fisher and Vice-President Harvey Rosenblum co-authored a Wall Street Journal op-ed about the failure of the Dodd–Frank Wall Street Reform and Consumer Protection Act to provide for adequate regulation of large financial institutions...

In a January 29, 2013 letter to Holder, Senators Sherrod Brown and Charles Grassley had criticized this Justice Department policy citing "important questions about the Justice Department’s prosecutorial philosophy." After receipt of a DoJ response letter, Brown and Grassley issued a statement saying, "The Justice Department’s response is aggressively evasive. It does not answer our questions. We want to know how and why the Justice Department has determined that certain financial institutions are ‘too big to jail’ and that prosecuting those institutions would damage the financial system."

...As of April 30, 2014, [Kareem] Serageldin remains the “only Wall Street executive prosecuted as a result of the financial crisis” that triggered the Great Recession.

...One of the most vocal opponents in the United States government of the "too big to fail" status of large American financial institutions in recent years has been the newly elected U.S. Senator from Massachusetts, Elizabeth Warren. At her first U.S. Senate Banking Committee hearing on February 14, 2013, Senator Warren pressed several banking regulators to answer when they had last taken a Wall Street bank to trial and stated, "I'm really concerned that 'too big to fail' has become 'too big for trial.'"

http://en.wikipedia.org/wiki/Too_big_to_fail.
.
.
Exhibit 2

"Why DOJ Deemed Bank Execs Too Big To Jail

If you were a senior bank executive, you might be tempted to at least entertain that thought. You would certainly be very aware that in the past four years, not one banker has gone to jail for anything that led to the great financial meltdown of 2008-2009.

...Not one dollar of the $86.9 billion [in fines] has been paid by any bank executive.

Shareholders took all the hits.

Suffice it here to briefly quote Senator Carl Levin (D-MI), Chairman of the , who said when the subcommittee released its final report on what happened,

Blame for this mess lies everywhere 
from federal regulators who cast a blind eye, 
Wall Street bankers who let greed run wild, 
and Members of Congress who failed to provide oversight.

Senator Tom Coburn

The Senate Permanent Subcommittee of Investigations referred its report to the Justice Department and Securities Exchange Committee for investigation.

No prosecutions resulted.

Why?  Why has no one been held responsible?  There are many reasons, including the complexity of the cases and the lack of criminal referrals from the regulatory agencies.  But perhaps the key reason is that those most responsible for indicting and prosecuting Wall Street executives seem to believe that, just as there are banks that are too big to fail, there are people who are too big to jail.

In a speech he gave last fall, the retiring head of the Criminal Division in the Department of Justice, Lanny Breuer, explained that position: “To be clear, the decision of whether to indict a corporation, defer prosecution, or decline altogether is not one that I, or anyone in the Criminal Division, take lightly.  We are frequently on the receiving end of presentations from defense counsel, CEOs and economists who argue that the collateral consequences of an indictment would be devastating for their client.  In my conference room, over the years, I have heard sober predictions that a company or bank might fail if we indict, that innocent employees could lose their jobs, that entire industries may be affected, and even that global markets will feel the effects.

“Sometimes–though, let me stress, not always–these presentations are compelling. In reaching every charging decision, we must take into account the effect of an indictment on innocent employees and shareholders, just as we must take into account the nature of the crimes committed and the pervasiveness of the misconduct.  ...In large multi-national companies, the jobs of tens of thousands of employees can be at stake.  And, in some cases, the health of an industry or the markets is a real factor.  Those are the kinds of considerations in white collar crime cases that literally keep me up at night, and which must play a role in responsible enforcement.”

...the argument seems to be that, if the president of a major bank were to be indicted for criminal behavior, his prosecution would endanger the bank itself and the jobs of all of its employees.

...Nothing I have seen in the past four years leads me to believe that Wall Street as a whole learned much from the events of 2008-2009.  The government’s bailouts that helped the big banks survive have been pretty much forgotten.  The multimillion-dollar bonuses are back with a vengeance, and with them incentives to cut corners and, for some, to circumvent the law.

Ted Kaufman
United States Senator, 2009 to 2010

http://www.forbes.com/sites/tedkaufman/2013/07/29/why-doj-deemed-bank-execs-too-big-to-jail/
.
.
Exhibit 3

"Too Big to Jail?

We are supposed to be a country of laws.  The laws should apply to Wall Street as well as everybody else.  So I was stunned when our country's top law enforcement official recently suggested it might be difficult to prosecute financial institutions that commit crimes because it may destabilize the financial system of our country and the world.

...The attorney general was talking about some of the same financial institutions that received billions, and in some cases trillions, of dollars in taxpayer bailouts after their greed, recklessness and illegal behavior plunged the country into a terrible recession...

In addition, the Federal Reserve provided over $16 trillion in total financial assistance to these same institutions during the financial crisis (which only became public after an amendment I inserted into the Dodd-Frank Wall Street Reform and Consumer Protection Act requiring the Fed to disclose this information).

The attorney general's view seems to be that if you are just a regular person and you commit a crime, you go to jail.  But if you are the head of a Wall Street company, your power is so great that a prosecution could have destabilizing consequences with national or even worldwide implications.

In other words, we have a situation now where Wall Street banks are not only too big to fail, they are too big to jail.  That view is unacceptable.

...no institution in America should be above the law..."

US Senator Bernie Sanders

http://www.huffingtonpost.com/rep-bernie-sanders/too-big-to-jail_b_2973641.html
.
.
Exhibit 4

"SEC is ‘weak’ on enforcement — says one of its commissioners"

The Securities and Exchange Commission has received its share of criticism for not properly policing markets. But lost amid headlines Thursday was a damning indictment from inside the agency.

[Securities and Exchange Commissioner] Luis Aguilar wasn’t willing to go along with a settlement against Kevin Kyser, the former chief financial officer of Affiliated Computer Services.

Aguilar pointed out that... Kyser himself knew what ACS was doing, was responsible for false and misleading public filings, highlighted the misleading revenue growth in earnings releases and analyst calls, failed to ensure ACS adequately disclosed the significance of these calls, signed false certifications and received an inflated bonus.

But Kyser, a CPA, wasn’t charged with fraud, Aguilar lamented.

"Beyond this particular matter, I am concerned that the Commission is entering into a practice of accepting settlements without appropriately charging fraud and imposing Rule 102(e) suspensions against accountants in financial reporting and disclosure cases.  I am also concerned that this reflects a lack of conviction to charge what the facts warrant and to bring appropriate remedies.

I am concerned that this case is emblematic of a broader trend at the Commission where fraud charges—particularly non-scienter fraud charges—are warranted, but instead are downgraded to books and records and internal control charges.  This practice often results in individuals who willingly engaged in fraudulent misconduct retaining their ability to appear and practice before the Commission.

I fear that cases in the future will continue to be weak.”

http://blogs.marketwatch.com/capitolreport/2014/08/29/sec-is-weak-on-enforcement-says-one-of-its-commissioners/
.
.
Systemic non enforcement.
.
.
"Sen. Elizabeth Warren (D., Mass.) asked regulators why they hadn't held individual bankers accountable for actions that led to the financial crisis...
.
.

...Fed Gov. Daniel Tarullo, the regulatory point man at the central bank, [suggested] the Fed could ban individuals at large banks from working again in the industry even if the bank reached a legal settlement with the government over misdeeds. Mr. Tarullo said during a Senate Banking Committee hearing Tuesday the Fed was “conducting investigations” to that effect, but didn’t elaborate...
.
.

“You are supposed to refer cases to the Justice Department when you think individuals should be prosecuted,” Sen. Elizabeth Warren (D., Mass.) told Mr. Tarullo and other regulators Tuesday, adding that hundreds of individuals were prosecuted after the savings and loan crisis in the 1980s. “Without criminal prosecutions, the message for every Wall Street banker is loud and clear. If you break the law, you are not going to jail but you might end up with a much bigger paycheck.”
.
.
...Tarullo was joined by Martin Gruenberg, chairman of the Federal Deposit Insurance Corporation; Tom Curry, the Comptroller of the Currency; Richard Cordray, director of the Consumer Financial Protection Bureau; Mary Jo White, chair of the Securities and Exchange Commission; and Tim Massad, chairman of the Commodity Futures Trading Commission...

.
...Warren allowed that the regulators themselves can’t prosecute — that would be up to the Justice Department. But regulators can provide referrals.

Daniel Tarullo, ...when pressed, indicated that the Fed didn’t specifically refer anyone.
.
..."How many senior executives did the Fed refer to DOJ for prosecution, Warren asked Federal Reserve Governor Daniel Tarullo.

“I don’t know,” he answered.

“You don’t know any? No one has been referred?”

“We shared all the information DOJ needed,” he said.

“So have you referred anyone?” Warren asked.

...the six agencies couldn't come up with a single referral between them. Tarullo only lamely managed to say that the Fed had "shared" information with the Justice Department...

.
...Mr. Tarullo, who was interrupted several times by Ms. Warren ...had a testy exchange after the hearing, with Ms. Warren waving her arms as she appeared to express displeasure with Mr. Tarullo’s on-the-record answers."

During the savings and loan crisis in the 1980s and 1990s, Warren said, the FBI opened 5,500 investigations based on referrals from banking regulators. Prosecutors brought 1,000 criminal cases and won more than 800 convictions...

...The problem, [Warren] continued, is that the civil settlements, which are paid for by the shareholders, don’t provide the kind of deterrence that “seeing the guy in the office next to you led out in handcuffs” might. JPMorgan CEO Jamie Dimon got an $8.5 million raise after settling with the government, she said.

.
“Without criminal prosecution, the message to every Wall Street banker is loud and clear. If you break the law, you’re not going to jail, but you might end up with a much bigger paycheck,” Warren said.

Sen. Richard Shelby (R., Ala.), ...said he agreed with Ms. Warren's outrage over the lack of jail time for bankers...

...Shelby ...laid the blame on the U.S. Justice Department...

No one in the financial sector or elsewhere should be "able to buy their way out from culpability when it's so strong it defies rationality..." Mr. Shelby said.  “Ultimately, it seems like the Justice Department seems bent on money rather than justice and that’s a mistake.”

..."The law on this is clear," Warren said, citing federal judge Jed Rakoff, "that no corporation can break the law unless an individual within those corporations has broken the law."

And yet, Warren continued, "not a single senior executive of these banks has been criminally prosecuted."

Worse, she said, citing the case of JPMorgan chief executive Jamie Dimon, they are likelier to get a raise for negotiating such a "great settlement" when the bank breaks the law.

..."If there is no justice," [Alabama Republican Richard Shelby] said, "then there is something wrong with the Justice Department."

...“If you steal $100 on Main Street, you’re probably going to jail. If you steal a billion bucks on Wall Street, you darn well better go to jail, too,” said Warren.

...Warren asked the regulators gathered if any had referred any specific executives to the Justice Department for criminal prosecution. No regulator volunteered that they had...

A Justice Department representative didn't respond to a request for comment."

Multiple Sources
.
.
Other relevant material evidence;

For the 400,000 plus Wells Fargo clients being lied to on their "Envision" retirement plans 

http://hartzman.blogspot.com/2013/01/envision.html

BB&T CEO Kelly King and CFO Daryl Bible Securities Fraud 

http://hartzman.blogspot.com/2014/09/bb-ceo-kelly-king-and-cfo-daryl-bible.html
.
SEC Whistleblower Evidence 

http://hartzman.blogspot.com/2013/02/sec-and-finra-whistleblower-evidence.html

No comments: