From the February 2013 issue of Futures Magazine • Subscribe!

Tops & bottoms of 2012


Russ Wasendorf: Wasendorf stole more than $200 million over 20 years by forging bank records. When the National Futures Association tightened its oversight following the MF Global debacle, Wasendorf could not continue his 20-year cut and paste of bank documents fraud and attempted suicide in the parking lot of his multimillion dollar office compound in Cedar Falls, Iowa. Apparently, the man who hosted “The American Hero” luncheon series at industry functions had more chutzpah than brains.

Bankers gone wild: What happens when you bail out an industry and refuse to hold anyone accountable? Apparently, you get an industry emboldened to lie, steal and cheat at every turn, assured that if they are caught they will not be shuttered or even criminally charged. They will pay a fine that, given the amount of money they earn through various schemes, can be considered the price of doing business.

Numerous banks manipulated the Libor rate that underpins trillions of dollars in loans. Barclays and UBS have agreed to fines, and other enforcement actions naming more banks are expected. Standard Chartered Bank agreed to pay a $327 million Treasury Department fine for violating  U.S. sanctions against Iran, Libya and others. The fine was less than the $340 million fine the bank agreed to in September with New York’s Department of Financial Services. The State regulator was prepared to pull Standard Chartered’s license. Perhaps a tougher stand by the Feds was warranted. 

The biggest outrage and fine was HSBC, that acknowledged laundering money for Mexican drug cartels as well as dealing with Iran. The $1.92 billion fine was roughly 10% of the bank’s 2012 profits. No one was charged with a crime.  

London Whale: Bruno Iksil, aka the London Whale, put on the credit default swap trades that cost JPMorgan $6 billion (and counting). While this trade was simply a loss and not a fraud, decades-old careers were ruined at JPMorgan, except of course CEO Jamie Dimon’s, whose star continues to shine and whose name was floated briefly for the new U.S. Treasury head. 

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