http://occupycorporatism.com/banks-can-legally-steal-customer-funds-from-private-checking-accounts/
http://jessescrossroadscafe.blogspot.com/2012/08/this-is-interesting-discussion-on.html
There is an Orwellian sounding distinction made by the Courts between 'stolen funds' and 'misappropriated funds' that seems to provide the TBTF banks and their cronies a license to loot the financial system with impunity, although it could have been written with Jon Corzine and JPM in mind.
Unlike some of the commenters I did not get the connection that the ruling provided approval for brokers to pledge customer funds as collateral for their own speculative loans, but rather it indemnified the lending banks from having to question the source of the funds, even when they could be reasonably expected to know the funds were being taken illegally from customers.
But I could be mistaken on this. This seems to speak to the weakening/widening of the rule on the rehypothecation of customer funds by the CFTC. But the 7th court ruling speaks to entire industry in its indemnification of the banks in having to question the sources of large sums of money, even if they are reasonably but not 'egregiously' suspect.
That is still bad enough, because it opens the door to a moral hazard that will eventually destroy any remaining confidence in first the futures and then the equity and bond markets.
Link to the full 7th Circuit Federal Appeals Court of Chicago ruling on Sentinel with the accompanying comment from a reader at Ann Barnhardt's site.
Here is an in-depth discussion of the Sentinel Case by Pater Tenebrarum (h/t J. Tavakoli). I read it the other day, and was starting to write something about this when I came across Warren's video. Tenebrarum includes this quote from a piece by Reuters:
It *could be* that this distorting of property law was written for the convenience of Jon Corzine and his ilk.
But it could also inadvertently pave the way for a major bailing out of an insolvent financial system using customer funds. There is some precedent in this. Even that bastion of the people, FDR, took their gold by force of law and THEN appreciated it substantially by devaluing the dollar against it in order to refund the depleted banking system. Why the Fed's Took the Gold in 1933.
Perhaps this time instead of the official gold in circulation it will be the savings in 401k's and IRA's, and the foreign assets held in custodial accounts, that are misappropriated by banks and brokers.
It is interesting to hear the reaction from some financial circles that the notion of customer segregated funds was always a thinly disguised farce and so this is nothing new. They will rationalize crimes in a widening circle of corruption. Their malicious greed knows no bounds.
When I read the rationale supporting the 7th Circuit Court Ruling I thought it was a satire of convoluted legalism. It basically destroys the notion of fiduciary responsibility for brokerages and their funding banks and opens the door to moral hazard a mile wide and gives the TBTF banks a license to accept stolen goods without consequence, as long as the customers have signed a document of trust even under false pretenses and perjury.People say that Franklin Roosevelt saved capitalism from the capitalists. And they are absolutely right. But after all the slayings of the great, outspoken leaders and prophets, there is no one left to save them.
Ann Barnhardt is a fierce advocate for customer rights. I have to say that I find her views on muslims in general to be extreme and misplaced to say the least, and highly offensive. And some of her other views are also extreme. I pray for her and others who fight against corruption that it does not tarnish them. Love is a shield against the excesses of a hardened heart.
This is a portion of her 'fierceness.' As a long time friend and fan of hers noted, I would hate to be married to her, and forget to take out the garbage.
Keep in mind that Ann saw her business destroyed and her customers cheated and robbed by the brazen theft of customer money in MF Global perpetrated by a corrupt US financial system. That is a hard lesson.
She has previously documented her legal dealings with the National Futures Association and their 'arbitrary and incompetent actions.'
This discussion on the place of customers in the US financial system is useful. The risk calculation has definitely changed.
The rational market reaction would be for customers to flee the increased risk presented by Wall Street brokers from this ruling and to seek safety where they might find it. It is shocking that the government does nothing to stop this growing erosion of confidence and loss of credibility in the financial system. I think this might be showing up already in the light volumes consisting primarily of HFT vapours.
What To Do When Every Market Is Manipulated - Chris Martenson
Warren Pollock speaks in passing of financial collapse and black swan events. Coincidentally here is a paper from Nassim Taleb that just caught my eye. Time to Exit the Financial Industry.
If the Fed attempts, once again, to provoke a financial assets bubble in stocks and corporate bonds as a solution to their problems, it will lead eventually to a depreciating dollar and another financial crash.
When push comes to shove, these trends suggest that might will make right, and possession will be nine tenths of the law. Or as Glenn Greenwald puts it, there will be no rule of law, just liberty and justice for some, the powerful few.
And in case you were wondering, No Criminal Charges Expected at MF Global - NYT, 15 Aug 2012
To read more: http://www.nowlebanon.com/NewsArticleDetails.aspx?ID=429131&MID=0&PID=0#ixzz24AIjaVir
Only 25% of a given NOW Lebanon article can be republished. For information on republishing rights from NOW Lebanon: http://www.nowlebanon.com/Sub.aspx?ID=125478 NOW Lebanon spoke with Jarno Limnéll, director of cyber security at Stonesoft Corporation, to get his thoughts on what Gauss might really be up to.
When you first heard about Gauss, who did you think it was targeting?
Jarno Limnéll: I think that when more than two-thirds of infected computers are located in Lebanon, and I think that when we most probably know that Gauss was produced by the factories (meaning Israel and the US) as Stuxnet, I’m pretty sure the main target is to follow the banking flows in Lebanon, and what is the most important, most interesting issue for the United States and Israel in Lebanon, that’s Hezbollah. [They are] especially [concerned] about the money flowing between Syria, Iran and Lebanon, meaning Hezbollah. This is only money, but as we all know, getting to know how the money is moving it tells you quite a lot, for example, about the arms trade.
What do you think Gauss’s mystery code is hiding?
Limnéll: It’s very hard to say anything about it, but I think it might involve some kind of surveillance, even a more sophisticated tool, targeting Hezbollah. It could be just one way to get in, to know more about how the organization works, what are their current activities with Iran, with Syria at the current moment. [The US and Israel] are more interested at this moment to follow what Hezbollah is doing and how they are cooperating or doing what Iran hopes them to do at this moment.
Stuxnet was designed to disrupt centrifuges that Iran is using to enrich uranium. Do you think Gauss was partially designed to disrupt Hezbollah’s military or communication systems?
Limnéll: No, to be short, and in my opinion, I don’t believe there’s that kind of mystery code in this. I think whatever the mystery code is, it is there more or less for surveillance purposes. I don’t think in this malware there is a physical part of it that would create some sort of disorder. I think this is surveillance malware. But, at the same time, those speculations you gave me about the mystery code, I would not be surprised at all if there is another malware already in Lebanon doing something like this but that we are not aware of it yet.
Gauss was discovered almost by accident as researchers were looking for variants of a related virus – Flame. Do you think we will see more of these types of viruses in the near future?
and will a computer virus hitting banks be the rational for an executive order on cybersecurity ?
Susanne Posel, Contributor
Activist Post
Kaspersky Lab, a Moscow-based computer security firm has found a new cyber surveillance virus that has been spying on banking transactions, stealing login information for social networks, email and instant messaging in the Middle East – specifically targeting Lebanon’s BlomBank, ByblosBank and Credit Libanais. And infected computers also include CitiGroup Inc.’s Citibank and eBay’s PayPal online payment system.
This virus’ focus on online banking makes it a potential threat to banking systems worldwide. Researchers are still trying to determine if this virus is simply conducting surveillance on banking transactions, or if it is being used to steal money out of targeted accounts.
Being called Gauss by the Kaspersky Lab, who confirmed that the new virus is related to Stuxnet, Flame and Duqu, yet a more sophisticated, state-sponsored cyber-espionage tool.
Researchers from the security software manufacturer Symantec Corp, confirm Kaspersky Lab’s summation that Gauss is related to previous government-created cyber warfare viruses.
Gauss is capable of being used as a weapon to attack industrial control systems, just like Stuxnet which was used to go after Iran’s Natanz nuclear power plant facility in 2010. Gauss can encrypt programs that are compressed onto a USB drive, then decompress them once the virus is able to contact to a targeted computer.Kapersky Lab stated:
The Department of Homeland Security (DHS) is analyzing Gauss’ potential threat to the US. Peter Boogaard, DHS spokesperson commented: “The department’s cyber security analysts are working with organizations that could potentially be affected to detect, mitigate and prevent such threats.”
The Cybersecurity Act of 2012 was introduced and voted down by the Senate in July with false claims perpetuated by President Obama that “. . . foreign governments, criminal syndicates and lone individuals are probing our financial, energy and public safety systems every day. It would be the height of irresponsibility to leave a digital backdoor wide open to our cyber adversaries”
Shawn Henry, a veteran of the cyber security division in the FBI, has stated that a cyber-attack is “very, very likely” to occur soon.
The Obama administration, in response to the Congress rejecting the CSA, is considering an executive order “to protect the nation’s critical computer infrastructure”, according to John Brennan, Homeland Security advisor.
At a Council on Foreign Relations meeting Brennan stated:
Gauss, which is an online banking surveillance virus, has the capability of electronically transferring information out of customer accounts to be redirected to another location. The banking industry would be devastated if suddenly they were infiltrated by Gauss, which would cause every banking customer to become insolvent overnight.
This sets the stage for the banking holiday that we’ve all been warned about. For example, the mainstream media would be used to announce that Gauss has infected all domestic banking computer systems. In order to purge the virus, all banks would need to shut down for a specified amount of time in order to reconfigure their computers. Perhaps on a Friday afternoon, the major banks will all announce that they will shut down to customer activity so they can “get rid of” Gauss from their system. The banks might say that they will reopen to the public on Monday morning.Customers would not be able to conduct any financial transactions, either in the bank or online over that weekend. And with the promise that everything will be OK on Monday, there is no threat of a banking holiday because the cover story is that a virus must be purged before regular banking can continue.
However, this would be a false flag meant to pacify the public to avert mass panic. While the general public would fall for the cover story, the banking cartels would simply electronically transfer all customer funds from private checking accounts out to off-shore banks where they could not be touched and cover their tracks.
Then on Monday morning, while the reports that the banking industry suffered greater infiltration than expected, the DHS and US armed forces would be poised to enact martial law to control the potential for domestic insurrection caused by the realization that every American has had their money stolen from them by the banking cartels in one fell swoop.
Banks Can Legally Steal Customer Funds From Private Checking Accounts
In 2007, the Sentinel Management Group (SMG) collapsed, leaving many customer segregated funds lost after they had been used as collateral. After a plethora of lawsuits and creditor claims, a decision earlier this month in the 7th Circuit Court placed the banking cartels ahead of customer claims for funds returned. Essentially, the Bank of New York Mellon (BNYM) sued to be first in line for return on stolen customer account monies – and won the right by the US court system.
In the mainstream media (MSM), the SMG collapse and subsequent ruling in favor of BNYM was touted as a difficulty “for customers to recoup money lost”.
SMG, a Chicago-based futures broker, had stolen more than $500 million in segregated customer funds to use as collateral on a loan to BNYM for in-house proprietary trading operations. Their books were audited by the National Futures Association (NFA), however the NFA admitted that they could not understand the convoluted mess they were provided by SMG to sign off on. And yet they did; and approved the audit.
BNYM sued SMG to re-coup any monies owed to them. However, these monies were customer segregated funds that SMG stole and re-hypothecated.
In federal court, John D. Tinder, US Circuit Court Judge ruled “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.”
This means that once a banking customer deposits their money into an account with a bank, the funds become property of the bank. The customer, at the point of deposit, relinquishes all rights to that money regardless of any laws in place, legal assurances, claims or guarantees; and this extends from investments to private checking accounts.
Once the bank has physical possession of your money, they own it and can use it for any means they deem fit. The veil has been lifted on separation of customer and bank funds. They are now legally co-mingled.
The bank could use it as collateral (as SMG did), to pay off debts, or place it on the stock market to bump up their trading with extra cash. And in the event that the customer allocated funds are lost, the bank does not owe the customer the money back.
Essentially, once you deposit money in your bank account it is gone.
Fred Grede, SMG trustee remarked: “I don’t think that’s what the Commodity Futures Trading Commission had in mind. It does not bode well for the protection of customer funds.”
The MF Global (MFG) scandal rocked the investment world because Jon Corzine, chief executive officer of MF Global, instructed the transfer of $200 million from their customer segregated funds to cover the corporation’s overdraft account with JP Morgan Chase.
Corzine emailed this order just three days before the official collapse of MFG. At the same time Corzine was moving customer money, this missing $6.3 billion dollars were used on bets on European indebted nations. As those European nation’s credit ratings plummeted, JP Morgan profited financially.
Our financial institutions have been planning for a financial collapse wherein the US government will not offer assistance. The resolution plans required by the Federal Reserve Bank, described schemes to have the major domestic banks remain afloat by selling off assets, finding alternative sources of funding, reducing risky measures that make a quick buck. These strategies were to be perfected with “no assumption of extraordinary support from the public sector.”
By selling “non-core assets” without upsetting shareholders while protecting the monetary system, taxpayers and creditors is the work of the mega-banks who have contributed solely to the destruction of the global financial markets. Bank of America (BoA) and Citibank have already begun to liquidate some of their assets – an action a bank takes when they are insolvent.
Both mega-banks and credit unions have been silently altering their deposit/withdrawal policies to deter customers from emptying out their accounts.
Because the digital record of monies is greater than the physical cash held by banks, this is a scheme to stave off a “run on the banks”.
With the Patriot Act , signed in 2001 by former President George W. Bush, and extended in 2011 by President Obama states that all banks must record all banking transactions with photo ID and fingerprints that will then be sent to an FBI database wherein all banking information tied to each individual on file can be traced for future reference.
Of recent, when withdrawing cash from an ATM, the daily allotted amount has decreased with some banks, thereby forcing the customer to go into the branch and extract the difference with a teller. At this point, according to anonymous informants, the customer is taken into a backroom to be questioned as to why they want the cash, what they are purchasing with the cash, why they are not choosing to use a debit card or another form of digital trade to make the purchase. These questions are not only intrusive, they are illegal.
Some anonymous sources have said that banking representatives who conduct the integrations are directed to keep a record of customer responses on an online application that will be sent to the FBI in conjunction with Patriot Act mandates on tracking banking activity.
While American citizens sit on the fence about whether or not they even subscribe to a banking collapse in the US, globalists like George Soros are investing heavily in gold.
Soros recently “unloaded over one million shares of stock in financial companies and banks that include Citigroup (420,000 shares), JP Morgan (701,400 shares) and Goldman Sachs (120,000 shares). The total value of the stock sales amounts to nearly $50 million” and then purchased 884,000 shares of Gold with SPDR Gold Trust.
The mega-banks, through Wall Street, are also acquiring firearms, ammunition and control over private mercenary corporations like DynCorp and ‘Blackwater” as authorized by the Department of Defense (DoD) directive 3025.18 .
DynCorp is a military-based private mercenary contractor that provides (among other services) intelligence training and support, international security, contingency plans and operations. Ninety-six percent of their funding is based on annual revenues from the US federal government. The international branch of DynCorp has operated as a “police force” even assisting local law enforcement during Hurricane Katrina.
Named as investors for the amassing of gun and ammunition manufacturers are Citibank, BoA, Barclays and Deutsche Bank who are pouring money into Cerebus and Veritas Equity who have taken over private corporations involved in the controlling riot situations.
The Federal Reserve Bank, one of the heads of banking cartels, has their own police force which operates as a protective security for the Fed against the American public. As part of the Federal Reserve Act signed in 1913, the designation of a Federal Law Enforcement – special police officers that are exclusively regulated by authority of the Fed (whether in uniform or plain clothes. These specialized police officers (who train with Special Response Teams) can work in tandem with local law enforcement or US federal agencies. These officers are heavily armed with semi-automatic pistols, sub machine guns and assault rifles as well as body armor.
Just this month, the Kaspersky Lab discovered Gauss, a banking surveillance virus believed to have the capability of stealing money out of customer’s bank accounts, as well as spying on banking transactions, stealing login information for social networks, email and instant messaging. So far, Middle Eastern banks have reported having been affected by Gauss – however both Citibank and Ebay’s Paypal have also been infected by this new viral threat to our banking systems.
It is clear that the financial collapse could be imminent. Banks are not only preparing with contingency plans, but also amassing a private police force for protection. With the legalization of stealing from customer secured funds, combined with a possible banking virus that could provide the perfect cover for an all-in-one banking holiday, the stage is being set for utter financial destination.
Once all customer funds were electronically transferred into off-shore accounts, the specialized police forces and hired mercenaries would be allocated forward to protect the technocrats from retaliation for their crimes.
The banking holiday will not come with flashing neon signs. Our warnings are right in front of us, if we choose to see them.
and.......
16 AUGUST 2012
Warren Pollock and Ann Barnhardt On the Increased Risk to Customers In the US Financial System
This is an enlightening discussion on the precedent set in the Sentinel ponzi scheme case that places customer money in brokerages at risk by destroying the principle of the primacy of the customer money, customer segregated funds."The way I read it was that basically you no longer have property rights. If you have your money in any (US) financial institution, you now have no property rights because in a crisis situation a bankruptcy judge now has the right to say that all of this speculation (by the banks and brokers) takes precedence over your savings."
W. E. Pollock
There is an Orwellian sounding distinction made by the Courts between 'stolen funds' and 'misappropriated funds' that seems to provide the TBTF banks and their cronies a license to loot the financial system with impunity, although it could have been written with Jon Corzine and JPM in mind.
Unlike some of the commenters I did not get the connection that the ruling provided approval for brokers to pledge customer funds as collateral for their own speculative loans, but rather it indemnified the lending banks from having to question the source of the funds, even when they could be reasonably expected to know the funds were being taken illegally from customers.
But I could be mistaken on this. This seems to speak to the weakening/widening of the rule on the rehypothecation of customer funds by the CFTC. But the 7th court ruling speaks to entire industry in its indemnification of the banks in having to question the sources of large sums of money, even if they are reasonably but not 'egregiously' suspect.
That is still bad enough, because it opens the door to a moral hazard that will eventually destroy any remaining confidence in first the futures and then the equity and bond markets.
Link to the full 7th Circuit Federal Appeals Court of Chicago ruling on Sentinel with the accompanying comment from a reader at Ann Barnhardt's site.
"The entire case reads like an after-the-fact rationalization of a predetermined conclusion. Years ago when I was with a different firm, I worked on numerous major institutional fraud and auditing cases, and I cannot recall a ruling even remotely similar - let alone from a federal court of appeals.
Please pay particular attention to the section on equitable subordination, on pages 6 through 8. Unbelievably, the court acknowledged in that section that even though some of the bankers lied under oath during the trial, that fact did not prove "sufficiently egregious" actions on the part of the bank.
I will quote the opinion: "Instead of finding that their testimony [i.e. their lies] 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." See page 7, column 2.
So in other words, a U.S. Court of Appeals has found that if a banker lies under oath during a trial, that fact proves that the bank was innocent of any misconduct with respect to the subject matter of those lies. (e.g. there is no fraud because they lied so brazenly and therefore badly.) Did we get transported to bizarro world without knowing it?"
Here is an in-depth discussion of the Sentinel Case by Pater Tenebrarum (h/t J. Tavakoli). I read it the other day, and was starting to write something about this when I came across Warren's video. Tenebrarum includes this quote from a piece by 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 ofmoney 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."
Worse, Grede said, is that the ruling suggests that a brokerage that allows customer money to be mixed with its own is not necessarily committing fraud.
That may raise the bar for proving that MF Global Holdings Ltd, under then-CEO Jon Corzine, misused customer funds as it scrambled to meet margin calls to back bets on European debt in the brokerage's final days. A $1.6 billion customer shortfall remains...
"I'm sure Mr. Corzine's attorneys will get ahold of this ruling and use it for all it's worth," Grede said.
...The appeals court said that "perhaps the bank should have known that Sentinel violated segregation requirements" but agreed with the district court's earlier ruling that "such a lack of care does not rise to the level of the egregious misconduct" needed to reprioritize a claim.
"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 wrote in the ruling.”
But it could also inadvertently pave the way for a major bailing out of an insolvent financial system using customer funds. There is some precedent in this. Even that bastion of the people, FDR, took their gold by force of law and THEN appreciated it substantially by devaluing the dollar against it in order to refund the depleted banking system. Why the Fed's Took the Gold in 1933.
Perhaps this time instead of the official gold in circulation it will be the savings in 401k's and IRA's, and the foreign assets held in custodial accounts, that are misappropriated by banks and brokers.
It is interesting to hear the reaction from some financial circles that the notion of customer segregated funds was always a thinly disguised farce and so this is nothing new. They will rationalize crimes in a widening circle of corruption. Their malicious greed knows no bounds.
When I read the rationale supporting the 7th Circuit Court Ruling I thought it was a satire of convoluted legalism. It basically destroys the notion of fiduciary responsibility for brokerages and their funding banks and opens the door to moral hazard a mile wide and gives the TBTF banks a license to accept stolen goods without consequence, as long as the customers have signed a document of trust even under false pretenses and perjury.People say that Franklin Roosevelt saved capitalism from the capitalists. And they are absolutely right. But after all the slayings of the great, outspoken leaders and prophets, there is no one left to save them.
Ann Barnhardt is a fierce advocate for customer rights. I have to say that I find her views on muslims in general to be extreme and misplaced to say the least, and highly offensive. And some of her other views are also extreme. I pray for her and others who fight against corruption that it does not tarnish them. Love is a shield against the excesses of a hardened heart.
This is a portion of her 'fierceness.' As a long time friend and fan of hers noted, I would hate to be married to her, and forget to take out the garbage.
Keep in mind that Ann saw her business destroyed and her customers cheated and robbed by the brazen theft of customer money in MF Global perpetrated by a corrupt US financial system. That is a hard lesson.
She has previously documented her legal dealings with the National Futures Association and their 'arbitrary and incompetent actions.'
This discussion on the place of customers in the US financial system is useful. The risk calculation has definitely changed.
The rational market reaction would be for customers to flee the increased risk presented by Wall Street brokers from this ruling and to seek safety where they might find it. It is shocking that the government does nothing to stop this growing erosion of confidence and loss of credibility in the financial system. I think this might be showing up already in the light volumes consisting primarily of HFT vapours.
What To Do When Every Market Is Manipulated - Chris Martenson
Warren Pollock speaks in passing of financial collapse and black swan events. Coincidentally here is a paper from Nassim Taleb that just caught my eye. Time to Exit the Financial Industry.
"The 'fooled by randomness' effect grows under connectivity where everything on the planet flows to the “top x”, where x is becoming a smaller and smaller share of the top participants. Today, it is vastly more acute than in 2001, at the time of publication of (Taleb 2001). But what makes the problem more severe than anticipated, and causes it to grow even faster, is the effect of fat tails. For a population composed of 1 million track records, fat tails multiply the threshold of spurious returns by between 15 and 30 times.
Genralization: This condition affects any business in which prevail (1) some degree of fat-tailed randomness, and (2) winner-take-all effects in allocation.
To conclude, if you are starting a career, move away from investment management and performance related lotteries as you will be competing with a swelling future spurious tail. Pick a less commoditized business or a niche where there is a small number of direct competitors. Or, if you stay in trading, become a market-maker.Basically what Taleb is saying is that under the existing financial system construct the size and frequency of 'events' require that there will be fewer and fewer big winners, and many more big losers, with the middle being starved if not impoverished. Given the nature of the game, don't be a player, either a broker or a trader. If you have to be in, just be in for the skim; own a piece of the system without playing. The future volatility of the market will crush or starve all participants except for the top one percent.
If the Fed attempts, once again, to provoke a financial assets bubble in stocks and corporate bonds as a solution to their problems, it will lead eventually to a depreciating dollar and another financial crash.
When push comes to shove, these trends suggest that might will make right, and possession will be nine tenths of the law. Or as Glenn Greenwald puts it, there will be no rule of law, just liberty and justice for some, the powerful few.
And in case you were wondering, No Criminal Charges Expected at MF Global - NYT, 15 Aug 2012
"Oh, you didn't know that those assets pledged by that fund or broker, the customer money, gold and silver, belonged to someone else when you took it and sold it? Ah, well that is all right then. That is just a misappropriation. And the CEO could not have known about the hijinks going on in their back offices."I wonder if, in their attempts to save their financial friends from the embarrassment of prosecution, the crony capitalists do not bring down the very system that has brought them their unjustifiable riches.
"A public man has no right to let his actions be determined by particular interests. He does the same thing as a judge who accepts a bribe. Like a judge he must consider what is right, not what is advantageous to a party or class...There is not a more perilous or immoral habit of mind than the sanctifying of success.” John Dalberg Lord Acton
and....
http://www.nowlebanon.com/NewsArticleDetails.aspx?ID=429131&MID=0&PID=0
What is Gauss hiding?
Talking to Jarno Limnéll, cyber security expert
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A newly discovered computer virus, dubbed Gauss, seems aimed at Lebanon’s Hezbollah, but one of the virus’s functions is still shrouded in mystery. (AFP Photo)
Earlier this month, a new virus was found infecting computers almost exclusively located in the Middle East. Russian anti-virus software company Kaspersky Lab, which found the virus, said it was likely created approximately one year ago and was first deployed in September or October of 2011. Lebanon seems to have been singled out as a target as the virus specifically sought to steal usernames and passwords from customers who bank online with six Lebanese lenders. Dubbed Gauss by Kaspersky, the malware is certainly a tool for espionage, but its other capabilities remain a mystery.
Researchers have not yet fully decrypted the virus, so they are not sure what it is fully capable of. In fact, the “mystery code,” is encrypted very strongly, prompting Kaspersky’s Roel Schouwenberg to tell Wired magazine that the attention to encryption “really makes one wonder what is so special that they have gone through all that trouble. It must be something important.”
Researchers have not yet fully decrypted the virus, so they are not sure what it is fully capable of. In fact, the “mystery code,” is encrypted very strongly, prompting Kaspersky’s Roel Schouwenberg to tell Wired magazine that the attention to encryption “really makes one wonder what is so special that they have gone through all that trouble. It must be something important.”
To read more: http://www.nowlebanon.com/NewsArticleDetails.aspx?ID=429131&MID=0&PID=0#ixzz24AIjaVir
Only 25% of a given NOW Lebanon article can be republished. For information on republishing rights from NOW Lebanon: http://www.nowlebanon.com/Sub.aspx?ID=125478 NOW Lebanon spoke with Jarno Limnéll, director of cyber security at Stonesoft Corporation, to get his thoughts on what Gauss might really be up to.
When you first heard about Gauss, who did you think it was targeting?Jarno Limnéll: I think that when more than two-thirds of infected computers are located in Lebanon, and I think that when we most probably know that Gauss was produced by the factories (meaning Israel and the US) as Stuxnet, I’m pretty sure the main target is to follow the banking flows in Lebanon, and what is the most important, most interesting issue for the United States and Israel in Lebanon, that’s Hezbollah. [They are] especially [concerned] about the money flowing between Syria, Iran and Lebanon, meaning Hezbollah. This is only money, but as we all know, getting to know how the money is moving it tells you quite a lot, for example, about the arms trade.
What do you think Gauss’s mystery code is hiding?Limnéll: It’s very hard to say anything about it, but I think it might involve some kind of surveillance, even a more sophisticated tool, targeting Hezbollah. It could be just one way to get in, to know more about how the organization works, what are their current activities with Iran, with Syria at the current moment. [The US and Israel] are more interested at this moment to follow what Hezbollah is doing and how they are cooperating or doing what Iran hopes them to do at this moment.
Stuxnet was designed to disrupt centrifuges that Iran is using to enrich uranium. Do you think Gauss was partially designed to disrupt Hezbollah’s military or communication systems?Limnéll: No, to be short, and in my opinion, I don’t believe there’s that kind of mystery code in this. I think whatever the mystery code is, it is there more or less for surveillance purposes. I don’t think in this malware there is a physical part of it that would create some sort of disorder. I think this is surveillance malware. But, at the same time, those speculations you gave me about the mystery code, I would not be surprised at all if there is another malware already in Lebanon doing something like this but that we are not aware of it yet.
Gauss was discovered almost by accident as researchers were looking for variants of a related virus – Flame. Do you think we will see more of these types of viruses in the near future?
Limnéll: I’m pretty sure that within the next few months, there will be at least one or two of these kinds of findings in the Middle East. I think these activities will increase. And there’s another aspect I think is important to bring up. For superpowers, if you want to show you have the capabilities, every now and then you have to expose your capabilities – what you are able to do, what kind of malwares you are already sending out – even if this is, as we all know, very dangerous policy. I think the main issue about the Stuxnet wasn’t about disrupting the nuclear facilities of Iran, I think the main aspect of Stuxnet was, especially afterward when the United States unofficially admitted that they were behind it, was to show their capabilities to the world. To say, “Hey, we are building these kind of sophisticated cyber weapons and we are not hesitating to use them.” This is a very strong message.
and will a computer virus hitting banks be the rational for an executive order on cybersecurity ?
Gauss Virus Targets Banking System May Cause US Financial Collapse
Activist Post
Kaspersky Lab, a Moscow-based computer security firm has found a new cyber surveillance virus that has been spying on banking transactions, stealing login information for social networks, email and instant messaging in the Middle East – specifically targeting Lebanon’s BlomBank, ByblosBank and Credit Libanais. And infected computers also include CitiGroup Inc.’s Citibank and eBay’s PayPal online payment system.
This virus’ focus on online banking makes it a potential threat to banking systems worldwide. Researchers are still trying to determine if this virus is simply conducting surveillance on banking transactions, or if it is being used to steal money out of targeted accounts.
Being called Gauss by the Kaspersky Lab, who confirmed that the new virus is related to Stuxnet, Flame and Duqu, yet a more sophisticated, state-sponsored cyber-espionage tool.
Researchers from the security software manufacturer Symantec Corp, confirm Kaspersky Lab’s summation that Gauss is related to previous government-created cyber warfare viruses.
Gauss is capable of being used as a weapon to attack industrial control systems, just like Stuxnet which was used to go after Iran’s Natanz nuclear power plant facility in 2010. Gauss can encrypt programs that are compressed onto a USB drive, then decompress them once the virus is able to contact to a targeted computer.Kapersky Lab stated:
After looking at Stuxnet, Duqu and Flame, we can say with a high degree of certainty that Gauss comes from the same ‘factory’ or ‘factories.’ All these attack toolkits represent the high end of nation-state-sponsored cyber-espionage and cyber war operations.
According to Jeffrey Carr, cyber warfare expert for the security firm Taia Global, the US government has been monitoring Lebanese Banks for activity traceable to militant groups and drug cartels. Carr said:
Iran has stated that Flame and Stuxnet specifically targeted their oil refineries with the intent to disrupt oil production. Gauss could be used for this purpose; however, it is designed to infiltrate banking systems' online infrastructure with complex algorithms and encrypted code bases.
Kapersky Lab is still analyzing Gauss and its capabilities. They confirmed that the creator of the virus went to a great deal of trouble to disguise its purpose by using sophisticated encryption codes that may take months to decipher.
The Budapest University of Technology and Economics’s Laboratory of Cryptography and System Security have devised a free test that determines whether or not the tell-tale Palida Narrow font is downloaded to any computer.
In tandem, the Federal Bureau of Investigations (FBI) isclaiming that another malware scheme is directing Web users to a compromised version of the FBI website. When on this fake FBI website, the malware known as Reventon will extract data and coerce users to pay an online fine.The UN’s International Telecommunications Union (ITU) has issued a warning to world leaders to protect their infrastructure because of the threat of Gauss. Marco Obiso, cyber security coordinator for ITU said: “We don’t know what exactly it does. We can have some ideas. We are going to emphasize this.”
You’ve got this successful platform. Why not apply it to this investigation into Lebanese banks and whether or not they are involved in money laundering for Hezbollah?US intelligence is touting that “Beirut is a hot spot for the clandestine movement of money by states” in reference to money laundering.
Iran has stated that Flame and Stuxnet specifically targeted their oil refineries with the intent to disrupt oil production. Gauss could be used for this purpose; however, it is designed to infiltrate banking systems' online infrastructure with complex algorithms and encrypted code bases.
Kapersky Lab is still analyzing Gauss and its capabilities. They confirmed that the creator of the virus went to a great deal of trouble to disguise its purpose by using sophisticated encryption codes that may take months to decipher.
The Budapest University of Technology and Economics’s Laboratory of Cryptography and System Security have devised a free test that determines whether or not the tell-tale Palida Narrow font is downloaded to any computer.
In tandem, the Federal Bureau of Investigations (FBI) isclaiming that another malware scheme is directing Web users to a compromised version of the FBI website. When on this fake FBI website, the malware known as Reventon will extract data and coerce users to pay an online fine.The UN’s International Telecommunications Union (ITU) has issued a warning to world leaders to protect their infrastructure because of the threat of Gauss. Marco Obiso, cyber security coordinator for ITU said: “We don’t know what exactly it does. We can have some ideas. We are going to emphasize this.”The Department of Homeland Security (DHS) is analyzing Gauss’ potential threat to the US. Peter Boogaard, DHS spokesperson commented: “The department’s cyber security analysts are working with organizations that could potentially be affected to detect, mitigate and prevent such threats.”
The Cybersecurity Act of 2012 was introduced and voted down by the Senate in July with false claims perpetuated by President Obama that “. . . foreign governments, criminal syndicates and lone individuals are probing our financial, energy and public safety systems every day. It would be the height of irresponsibility to leave a digital backdoor wide open to our cyber adversaries”
Shawn Henry, a veteran of the cyber security division in the FBI, has stated that a cyber-attack is “very, very likely” to occur soon.
The Obama administration, in response to the Congress rejecting the CSA, is considering an executive order “to protect the nation’s critical computer infrastructure”, according to John Brennan, Homeland Security advisor.
At a Council on Foreign Relations meeting Brennan stated:
One of the things that we need to do in the executive branch is to see what we can do to maybe put additional guidelines and policies in place under executive branch authority. I mean if the Congress is not going to act … then the president wants to make sure that we are doing everything possible.
Brennan said that an executive order would be a “good vehicle” to ensure government agencies are empowered to take action “to make sure the nation is protected.”
Stewart Baker, former senior official for the DHS and cyber security expert at the law firm Stepoe and Johnson remarked:
Because of the global fiat currency implosion that began in 2008, the banking cartels have been propping up the American financial system to stave off a complete monetary collapse in the United States. However, it has always been their intention to bring down the monetary system in America.
Ironically, Gauss may be the mode in which they are able to carry this out.
During the MF Global scandal, Jon Corzine ordered segregated customer funds to be secretly redirected into accounts in JPMorgan. During this beta-test, the banking cartels got away with stealing $200 million of customer money without suffering repercussions.
Recently, we have seen other types of theft out of customer accounts held in major banks like Bank of America (BoA) wherein they drilled into a customer’s safety deposit box, confiscated family heirlooms and transferred them out of the bank. The customer’s property was sent to North Carolina before the theft was detected. When the customer attempted to retrieve their property, BoA claimed they did not have a social security number on file which was why they emptied out the safety deposit box. However, when opening a safety deposit box, the customer’s social security number is provided on the initial documentation.The lie BoA perpetrated on the customer was simply to distract from the fact that they overtly stole from their customer’s private account. And this small-time thievery may be a symptom of a larger banking scheme looming in the distance.
Stewart Baker, former senior official for the DHS and cyber security expert at the law firm Stepoe and Johnson remarked:
The president can say we can’t wait, and I’m going to do what Congress can’t and protect the American people from cyber-attacks (and) in an election year, that sounds like a pretty promising approach.Obama has repeatedly circumvented Congress with his use of executive orders. This instance would be another where he would be abusing his executive powers.
Because of the global fiat currency implosion that began in 2008, the banking cartels have been propping up the American financial system to stave off a complete monetary collapse in the United States. However, it has always been their intention to bring down the monetary system in America.
Ironically, Gauss may be the mode in which they are able to carry this out.
During the MF Global scandal, Jon Corzine ordered segregated customer funds to be secretly redirected into accounts in JPMorgan. During this beta-test, the banking cartels got away with stealing $200 million of customer money without suffering repercussions.
Recently, we have seen other types of theft out of customer accounts held in major banks like Bank of America (BoA) wherein they drilled into a customer’s safety deposit box, confiscated family heirlooms and transferred them out of the bank. The customer’s property was sent to North Carolina before the theft was detected. When the customer attempted to retrieve their property, BoA claimed they did not have a social security number on file which was why they emptied out the safety deposit box. However, when opening a safety deposit box, the customer’s social security number is provided on the initial documentation.The lie BoA perpetrated on the customer was simply to distract from the fact that they overtly stole from their customer’s private account. And this small-time thievery may be a symptom of a larger banking scheme looming in the distance.Gauss, which is an online banking surveillance virus, has the capability of electronically transferring information out of customer accounts to be redirected to another location. The banking industry would be devastated if suddenly they were infiltrated by Gauss, which would cause every banking customer to become insolvent overnight.
This sets the stage for the banking holiday that we’ve all been warned about. For example, the mainstream media would be used to announce that Gauss has infected all domestic banking computer systems. In order to purge the virus, all banks would need to shut down for a specified amount of time in order to reconfigure their computers. Perhaps on a Friday afternoon, the major banks will all announce that they will shut down to customer activity so they can “get rid of” Gauss from their system. The banks might say that they will reopen to the public on Monday morning.Customers would not be able to conduct any financial transactions, either in the bank or online over that weekend. And with the promise that everything will be OK on Monday, there is no threat of a banking holiday because the cover story is that a virus must be purged before regular banking can continue.
However, this would be a false flag meant to pacify the public to avert mass panic. While the general public would fall for the cover story, the banking cartels would simply electronically transfer all customer funds from private checking accounts out to off-shore banks where they could not be touched and cover their tracks.
Then on Monday morning, while the reports that the banking industry suffered greater infiltration than expected, the DHS and US armed forces would be poised to enact martial law to control the potential for domestic insurrection caused by the realization that every American has had their money stolen from them by the banking cartels in one fell swoop.
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