Behind the Darkened Blinds at...
AXA
Sightings from The Catbird Seat
~ o ~
March 1, 2009
From wikipedia:
Bernard Lawrence Madoff (born April 29, 1938) is a former investment fund manager and business owner who started the Wall Street firm Bernard L. Madoff Investment Securities LLC. He was chairman of that firm, which he founded in 1960, until December 11, 2008, when he was arrested and charged with securities fraud....
Five days after his arrest, Madoff's assets and those of the firm were frozen and a receiver was appointed to handle the case. Madoff's alleged fraud may be valued at a loss of up to a $50 billion in cash and securities. To date, it is the largest investor fraud ever attributed to a single individual. Banks from Spain, France, Switzerland, Italy, the Netherlands and other countries have announced that they have potentially lost billions in U.S. dollars as a result of Madoff's crime....
Philanthropy
Madoff's family has been important in philanthropic circles. When his nephew, Roger Madoff, died of leukemia in April 2006, paid death notices appeared in newspapers from a range of charitable organizations including the Lower East Side Tenement Museum. Madoff donated approximately $6 million to lymphoma research after his son Andrew was diagnosed.
Madoff has also undertaken charity work for the Gift of Life Bone Marrow Foundation, and through The Madoff Family Foundation, a $19 million private foundation which he managed along with his wife, he donated money to hospitals and theaters. The foundation has also contributed to many Jewish educational, cultural, and health charities. The various organizations were mostly given charity funds backed by Madoff securities.
Madoff was also a major contributor to the Democratic party.
In the wake of Madoff's arrest, the assets of the Madoff Family Foundation have been frozen by a federal court....
Recovery of funds
The victims of Maddoff's have been exploring the possibility of recovering at least some of their investments. One legal option available is the use of the doctrine known as fraudulent conveyance. With this option, investors who withdrew their money long before the fraud was revealed, may be forced to return their profits or even part of their initial investments.
Affected clients
The Securities Investor Protection Corporation (SIPC) is liquidating Madoff’s brokerage, with Irving Picard acting as trustee. The SIPC provides up to $500,000 in insurance for missing money or securities in individual brokerage accounts, but does not protect against bad investments....
Although Madoff filed a report with the SEC in 2008 stating that his advisory business had only 11-25 clients and about $17.1 billion in assets, dozens of investors have reported losses, and the SEC reports a $50 billion fraud. According to Bloomberg "In all, companies, individuals and foundations have disclosed about $24 billion of investments with Madoff." Those affected include banks, Wall Street investors, charities, and individuals.
According to The Wall Street Journal the investors with the largest potential losses include:
Fairfield Greenwich Advisors, $7.50 billion
Tremont Capital Management, $3.30 billion
Banco Santander, $2.87 billion
Bank Medici, $2.10 billion
Ascot Partners, $1.80 billion
Access International Advisors, $1.40 billion
Fortis, $1.35 billion
Union Bancaire Privee, $1.00 billion
HSBC, $1.00 billion
The potential losses for these nine investors total $22.32 billion. Other investors, with potential losses between $100 million and $1 billion include Natixis SA, Carl J. Shapiro, Royal Bank of Scotland Group PLC, BNP Paribas, BBVA, Man Group PLC, Reichmuth & Co., Nomura Holdings, Aozora Bank, Maxam Capital Management, EIM SA, and AXA SA . The potential losses for these investors total $4.02 billion. Twenty-three investors with potential losses of $500,000 to $100 million were also listed, with total potential losses of $540 million. The grand total potential losses in the Wall Street Journal table is $26.9 billion.
http://en.wikipedia.org/wiki/Bernard_L._Madoff
May 7, 2007
France's Sarkozy seeks
parliament allies
By ANGELA DOLAND, Associated Press Writer
PARIS - French president-elect Nicolas Sarkozy plans to waste no time making France a friendlier place for business — and a less inviting place for criminals and would-be immigrants — but first he must win control of parliament in new elections next month.
Sarkozy, a U.S.-friendly conservative and an immigrant's son, defeated Socialist Segolene Royal by 53 percent to 47 percent with about 85 percent voter turnout Sunday.
The win gave Sarkozy a strong mandate for his vision of France's future: He wants to free up labor markets, calls France's 35-hour work week absurd and plans tougher measures on crime and immigration.
"The people of France have chosen change," Sarkozy told cheering supporters in a victory speech that sketched out a stronger global role for France and renewed partnership with the United States.
The Bush administration on Monday welcomed Sarkozy's election as an opportunity to strengthen relations with France.
"We certainly look forward to cooperation with the French," White House press secretary Tony Snow said Monday. "And we know that there are going to be areas of disagreement. But on the other hand, there are certainly real opportunities to work together on a broad range of issues."...
Sarkozy's is certain to face resistance from powerful unions to his plans to make the French work more and make it easier for companies to hire and fire.
Over the next few days, Sarkozy "will retire to somewhere in France to unwind a little ... and to start organizing and preparing his teams," said Francois Fillon, an adviser often cited as the leading candidate for prime minister....
The new president, 52, plans to take over power from outgoing 74-year-old leader Jacques Chirac on May 16. Fillon said Sarkozy's new government would be installed May 19 or 20.
The election left little time for celebrating: Legislative elections are slated for June 10 and 17, and Sarkozy's conservative UMP party needs a majority to keep his mandate for reforms. A win by the left would bring an awkward power-sharing with a leftist prime minister, which would put a stop to his plans.
Sarkozy has drawn up a whirlwind agenda for his first 100 days in office and plans to put big reforms before parliament at an extraordinary session in July. One would make overtime pay tax-free to encourage people to work more. Another would put in place tougher sentencing for repeat offenders, and a third would toughen the criteria for immigrants trying to bring their families to France.
On election night, scattered violence was reported across France. Police reported that 270 people were taken in for questioning and that 367 parked vehicles had been torched. On a typical night in France, about 100 cars are burned.
There had been fears that the impoverished suburban housing projects, home to Arab and African immigrants and their French-born children, would erupt again at the victory of a man who once labeled young delinquents "scum." That blunt comment, and Sarkozy's tough anti-crime tactics as interior minister, helped fuel riots that raged for three weeks in housing projects in 2005.
Late Sunday, small bands of youths hurled stones and other objects at police at the Place de la Bastille in Paris, across town from a giant street party celebrating Sarkozy's win. Some youths bared their backsides at riot officers, and police fired volleys of tear gas. Other fights with the police broke out in Toulouse, Lyon, Rennes and Nantes, police said. Two police unions said firebombs targeted schools and recreation centers in the Essonne region just south of Paris.
In Sarkozy's victory speech, he reached out to all those he has alienated in the past, promising to be president "of all the French, without exception."
"I want to tell them that tonight, this is not the victory of one France over another," said Sarkozy, who is often portrayed as the enemy of youths in the housing projects....
http://news.yahoo.com/s/ap/20070507/ap_on_re_eu/france_election_68
AXA Financial - One of the world’s largest insurance/financial companies, based in France.
From Reuters News, 6/2/00:
INSURERS MUST HONOR POLICIES
PAID TO NAZIS
by Joan Gralla
The World Jewish Congress on Friday said European insurers still have to make good on prewar policies sold to Holocaust survivors— even if the policies were cashed-in by Nazis.
Elan Steinberg, executive director for the advocacy group, said this was one issue he would stress on June 21, when the International Commission on Holocaust-era Insurance Claims meets in London. The WJC is a member of the commission, which is auditing Europe’s insurers to see if they cheated Holocaust families by failing to honor prewar policies.
“It is grotesque to describe a policy paid to a murderer as a paid policy,” Steinberg told Reuters. He explained that it was common practice for the Nazis to set up so-called blocked accounts— accounts held in the name of the recipient that could only be tapped by the Nazis.
“I have actually heard insurance representatives claim that since they paid those policies out they want blocked accounts considered paid claims,” he said. . . .
Germany’s Allianz, France’s AXA, Italy’s General Assicurazioni, and Swiss insurers Wintherthur and Zurich Allied, which participate in the commission, had all agreed to use relatively undemanding standards of proof because of the special nature of Holocaust claims.
In an internal document obtained by Reuters, the Washington, D.C.-based commission has accused the five insurers of wrongly rejecting some claims from Holocaust families by asking for documents that they cannot possibly supply. Few, if any, survivors walked out of concentration camps with insurance documents, bank books or other financial records.
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So, just where did the billions of dollars in Holocaust victims’ money go over the past half-century? Well, only the Third Reich and Robert Rubin may ever really know, but here are some possibilities....
AXA Financial is the 8th largest institutional investor in Columbia/HCA; the 7th largest in Barclays Bank; the 4th largest in Bank of America; the 3rd largest in Citigroup; the 3rd largest in American International Group; the 3rd largest in Merrill Lynch; and last but not least, the . . . (. . . drum-roll . . .)
#1 INVESTOR
... in ...
LORAL SPACE
... and ...
! ! ! GOLDMAN SACHS ! ! !
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December 7, 2006
Gates exits with Fidelity
probe undone
Defense secretary led trustees' inquiry into effect of gifts
By Ross Kerber, Boston Globe
Incoming US Defense Secretary Robert M. Gates is leaving behind some unfinished business in the private sector: an investigation into the spree of gifts that traders at Fidelity Investments received a few years ago.
Until his confirmation by the Senate yesterday, Gates had led a group of independent trustees charged with protecting investors in the mutual funds sold by Fidelity, the Boston mutual-fund giant.
Now these trustees are conducting a probe of $2 million in gifts received by a group of Fidelity traders from 2002 to 2004. Details of the gifts were spelled out in regulatory filings as part of a $10 million settlement on Monday with a brokerage Fidelity used to place trades, Jefferies & Co.
Jefferies did not admit or deny wrongdoing, and Fidelity was not a party to the settlement. But regulators continue to review Fidelity's actions, and the firm could face penalties if they determine that investors suffered financial harm as a result of the gifts .
The trustees also are studying whether the acceptance of gifts and gratuities, ranging from plane trips to tickets to the Wimbledon tennis tournament and Super Bowl festivities, wound up harming investors, said attorneys involved in the situation.
Fidelity has acknowledged problems with gifts and entertainment and disciplined about two dozen employees. But the company says it can't be shown its funds or clients were harmed financially.
At the start of this year Gates became chairman of the 10 independent trustees on Fidelity's 13-member funds board that oversees vehicles like the Magellan mutual fund. After his confirmation yesterday, Fidelity said he would leave the board and be replaced as independent chairman by Ned C. Lautenbach, a partner at a New York private equity firm.
Yesterday, Fidelity spokeswoman Anne Crowley confirmed the independent trustees are investigating the situation but said she could not discuss their specific interests. A lawyer representing the trustees said they wouldn't comment, Crowley said.
"The trustees, as is the case with all matters related to the funds, have been appraised of the matter and have been conducting a review for a long time," Crowley said. She added Fidelity has cooperated with both the SEC and the independent trustees' investigations, "which we hope will conclude shortly."
David Bergers, head of the SEC's Boston office, declined to comment. Gates and seven other independent trustees -- those who do not work for Fidelity -- did not return messages this week. Two others declined to comment.
Crowley said the three trustees employed by Fidelity, including chief executive Edward C. Johnson III and Fidelity president Robert L. Reynolds, cannot comment because of the ongoing investigation.
A recurring question in the mutual-fund industry is the degree of independence trustees at all mutual-fund companies have . Despite their large salaries -- Gates was paid $362,250 by Fidelity in 2004, in addition to his compensation of $416,020 as president of Texas A&M University for the academic year starting in 2004 -- many boards failed to detect or prevent problems like market-timing issues and other scandals that engulfed other companies in recent years. The defense secretary post paid $183,500 in fiscal year 2006.
At Fidelity, independent trustees have backed Johnson in his opposition to proposed rules that would force him to give up power on the trustees board, and they rarely speak publicly.
Gates, a former director of the Central Intelligence Agency, also plans to resign from Texas A&M.
The attorneys said they did not know Gates's exact role in the probe.
The details of the gift-giving were fleshed out Monday when Jefferies & Co. agreed to pay more than $10 million to resolve regulators' claims that one of its brokers went overboard in showering Fidelity traders with free plane rides and other largess to win Fidelity's business.
Fidelity's commissions to Jefferies rose from $4 million in 2001 to $30 million in 2003, according to filings by the NASD, formerly the National Association of Securities Dealers. Fidelity has said other reasons helped drive the new orders to Jefferies.
In a press release disclosing the settlement with Jefferies, SEC deputy director of enforcement Walter Ricciardi said that "the traders' loyalty and allegiance are owed solely to investors and such compensation may harm investors by impairing the traders' objective judgement."
The SEC hasn't publicly specified how much harm investors may have suffered from the gift-giving, however.
Michael Goldstein, associate professor of finance at Babson College, who has designed ways to measure the quality of brokerages' work, said that it will be very hard for the SEC to prove harm occurred. As the owner of shares in several Fidelity funds, he said, "my belief about Fidelity is that they really do negotiate on prices and [trade] execution quality."
But he added he would prefer rule changes that would give independent trustees more influence and more rights to see information that now could be restricted to Johnson and other internal trustees. "Even the former director of the CIA would know that it's hard to interpret information if you don't get the information," Goldstein said.
Ross Kerber can be reached at kerber@globe.com.
For more on bonus bonanzas - and another George W. Bush cabinet member, Treasury Secretary Henry Paulson, GO TO > > > Dirty Gold in Goldman Sachs
And, for more “unfinished business”, GO TO > > > Nests in the Pentagon; Halliburton from Hell; It’s the OIL, STUPID!
And for more unspeakable GREED, GO TO > > > The World’s Greatest Greed!
June 13, 2001
Axa probe in
money-laundering case
PARIS, June 13 (Reuters) - The founder of French insurer AXA and its chief executive were being questioned on Wednesday by police investigating Luxembourg-based PanEurolife, an insurer suspected of money laundering, a judicial source said.
The source said Claude Bebear, chairman of AXA's supervisory board, and AXA's Chief Executive Henri de Castries would be interviewed by investigating magistrate Dominique de Talance later on Wednesday.
AXA said in a statement that Bebear and De Castries "were heard as witnesses by the French 'Brigade Financiere' on Tuesday June 12 in connection with the PanEurolife matter," adding this was a normal procedure to shed light on allegations about tax evasion by PanEurolife.
Created in 1990, PanEurolife was acquired by the French insurer when it bought French rival UAP in 1997. AXA then sold its holding in PanEurolife to U.S. company Nationwide Holdings in November 1998.
About a dozen people, including PanEurolife's managing director Jacques Drossaert, have already been placed under investigation in the PanEurolife case for "fraud, theft and laundering." PanEurolife's chairman is Gaston Thorn, a former president of the European Commission.
French legal authorities were alerted to the alleged fraud by La Poste earlier this year. According to judicial sources, it is alleged that money was deposited at French post office branches, transferred to Luxembourg and then converted into life assurance contracts so owners could receive investment income tax free.
Claude Bebear -- who turned a small mutual insurer in the north of France into the biggest in the world measured by sales -- is also head of the committee promoting the Paris bid to host the 2008 Olympics. A decision on the host city is to be made in July in Moscow.
AXA said that Banque Worms, another UAP subsidiary acquired in 1997 and sold to Deutsche Bank last October, was also the subject of the police investigation.
A Credit Lyonnais spokesman said on Wednesday its current chairman Jean Peyrelevade, the former head of UAP, had been questioned by police on Tuesday but had not been interviewed by the magistrate nor placed under investigation.
http://cnnstudentnews.cnn.com/2001/BUSINESS/06/13/axa.reut/
July 6, 2000
Cisco Systems
Watered Stock Fraud Scheme
Implications: Fidelity Investments, Janus, AXA, Pricewaterhouse Coopers, Brobeck, Phleger & Harrison LLP, Lockheed Martin, Microsoft, Goldman Sachs, Estate Tax, Pooling Method of Acquisitions, Insurance Industry, Ralph Nader, Phil Gramm and Organized Labor
Parish and Company Press Release
PORTLAND, OR., -- What could all these organizations, financial practices and individuals have in common? They have all become key players or been affected by what is clearly the greatest financial fraud in the last 50 years.
Cisco Systems now has 8 billion shares outstanding, including stock options, even though annual sales are less than $20 billion. The company is implementing a yet to be disclosed campaign of watered stock fraud. Cisco is also incurring massive losses hidden behind accounting illusions, duping even some of the most influential members of the business press including James Cramer of www.thestreet.com.
Meanwhile Fidelity Investments, Cisco's largest shareholder, and other investment firms are extracting high management and trading fees from Cisco Systems shares without disclosing this scheme to investors. These investment companies are clearly violating the 404C provision of the ERISA pension law and should be subject to significant legal liability when this fraud is exposed.
Cisco Systems has now become an even more substantial financial fraud than the Microsoft Corporation and rather than spawning innovation, like Microsoft, Cisco's scheme is crushing smaller competitors and leading to a more stagnant technology sector, resulting in many significant innovations now occurring outside the United States. Cisco boasts that it will acquire 25 companies this year. In addition to destroying many promising smaller technology firms, Cisco is also breeding an unhealthy consolidation in the media, legal and financial services industries as there are fewer promising companies to write about and provide with legal and financial services.
Both Cisco Systems and Microsoft, as reported in a NY Times Front Page Story, now pay no federal income tax due to the success of the scheme. Cisco will argue that many companies use similar financial techniques yet that is false. Their situation, although difficult to understand, is a unique and a massive financial fraud no matter their sales grow 20, 40 or 60 percent. No amount of public relations or glowing press releases on Business Wire and PR Newswire, two services that together have a virtual monopoly over Internet based press releases, can disguise this fact.
This report will explain the unique nature of financial fraud at Cisco Systems and why it is even more significant that the financial pyramid scheme being utilized by the Microsoft Corporation. It will also explain why repealing the estate tax and the pooling method for acquisitions together is good government policy and could unravel a major part of this watered stock fraud at Cisco Systems and help restore integrity to the markets. More importantly, this will stimulate interest in more innovative smaller and medium sized companies and reinvigorate the economy. Cisco is no longer able to innovate aggressively because such innovation takes time. Their focus is now sustaining a watered stock fraud scheme. This requires purchasing research and development along with any significant competitors.
Other topics include why Fidelity Investments, Goldman Sachs, Janus, AXA and Pricewaterhouse Coopers may well be subject to successful multi-billion dollar legal actions for not disclosing this risk to investors in addition to having a variety of conflicts of interest. Pricewaterhouse Coopers currently joint markets and installs Cisco's products in addition to auditing their financial statement and many leading pension funds, in which Cisco is a primary holding. Pricewaterhouse Coopers is also Goldman Sachs auditor, one of Cisco's key investment bankers involved in numerous merger transactions.
Fidelity is currently engaged in what is called "flipping" in the real estate markets. This involves continually buying and selling Cisco's shares in order to generate brokerage fees and leaving the last investor with inflated shares. More surprising to me are Fidelity's relationships with many "boutique" investment firms. These firms provide research to Fidelity regarding certain companies and are compensated on how well the stock moves subsequent to delivering the research to Fidelity.
If the stock researched goes up then Fidelity will direct a certain amount of trading activity to be credited to the research firm through that research firm's clearing firm. This may be for securities completely unrelated to those researched. It surprises me that this is supposedly legal, especially when Fidelity has a fiduciary duty to retirement plan investors and is clearly trying to manipulate stock prices rather than make sound long-term investments.
Fidelity is the largest outside holder of Cisco Systems, owning more than $19 billion in shares, more than Cisco's total annual revenues. In addition, Cisco is often the most actively traded stock on the Nasdaq exchange.
Cisco is now also seeing significant trading volumes on the Instinet, often the most actively traded security. The Instinet is owned by Reuters of the UK. Reuters has been known for the quality and independence of its wire service reports which are reprinted in top publications including the NY Times. They have yet to disclose this situation even though Retuers now issues a much larger volume of stories on Cisco. Individual investors who have come to rely on Reuters deserve to have this analysis affirmed by Reuters.
Even the Associated Press, the other major wire service, has failed to disclose this situation at Cisco. In a wire story by Cliff Edwards that appeared the day following this press release the AP wrote "Tech Earnings Harder to Evaluate." This story focused on Intel and other tech firms posting large investment gains and in the last paragraph highlighted that Cisco was one company that could still be counted on for solid growth. The irony is that Intel is a beacon of financial integrity compared to Cisco. This was clearly a coup for Cisco's public relations department since the story was reprinted both on Yahoo and in the New York Times.
To understand Pricewaterhouse Coopers relationship with Cisco Systems one need only look to Microstrategy, another Pricewaterhouse Coopers client. Pricewaterhouse Coopers also co-markets Microstrategy's products. The question becomes, will similar accounting irregularities be disclosed and Cisco's stock plummet 55 percent in one day? One area to watch closely is leasing disclosure to determine whether Pricewaterhouse Coopers adequately discloses Cisco's leasing activity and product financing arrangements given their significance to Cisco's financial statements.
Cisco generally doesn't announce large sales but rather the provision of "vendor financing." This is the link to one such deal. Hanaro Telecom Signs $200 Million Pact with Cisco. Is Cisco really making genuine sales or rather providing financing to secure sales that it would otherwise lose to competitors more reliable products?
This report will also examine Lockheed Martin's selection of Cisco as a primary vendor in its multi-billion dollar "Blue Team" bid for the next generation of Naval Destroyers in addition to legal actions against Cisco with respect to their business practices now filed in several states, as reported by CNET.
With the long history of financial procurement controversy in major contracts with the Pentagon one might wonder why Lockheed Martin would risk choosing Cisco Systems as a key vendor when many other top quality alternatives exist. Especially given the significance of Cisco's watered stock fraud scheme to government employees pensions and fact that they earn billions and don't pay a dime of federal income tax. These key facts should be of interest to Lockheed.
Lockheed Martin is now competing directly with Litton Industries for a multi-billion dollar naval destroyer contract. See two page summary of Naval Destroyer Contract for details.
More than 75 percent of Lockhead's sales are to the federal government, including the Pentagon and Commerce departments. Interestingly, a respected former legislator and top ranking Lockheed executive was just appointed to be the Secretary of Commerce by President Clinton. One has to wonder why Lockheed does not remove Cisco from the project and chose another vendor from the quality pool of such vendors available. Perhaps it is Cisco's aggressive sales techniques as summarized on CNET news, "Cisco Faces Lawsuit Over Gear, Business Practices."
In addition to the watered stock fraud and non payment of federal income tax issues, CNET has also reported that Cisco is being sued over quality of service problems, patent infringement in the fiber optic area and conflicts of interest with respect to its business practices. One company in Louisiana, AMC, according to CNET, rejected a $40 million settlement offer from Cisco. Ideally, Lockheed should chose a top quality medium sized firm with higher quality products.
As with Microsoft, Cisco is attempting to access significant government contracts and this is their right. The problem is that we can't afford to have these marketing and legal driven companies, like Microsoft and Cisco, who are leveraging growth via financial fraud, responsible for our national security and the efficiency of government. Too many excellent alternatives exist....
Reasons For Repealing The Use of The Pooling Method For Acquisitions
1) Pooling essentially involves using a photocopy machine to print stock to pay for acquisitions without accounting for the cost of such activity in the financial statements. Many eloquent arguments exist to justify pooling but it's that simple. If a merger makes sense, pooling is not necessary.
One need only look to other leading technology firms that regularly engage in mergers, including the Intel Corporation and IBM, that generally do not use pooling. Goldman Sachs will fight for pooling because it is a useful tool for generating investment banking fees resulting from such mergers.
As reported in USA Today on July 3, 2000 "But a recent study by McKinsey & Company, a consulting firm, labels Cisco's argument a myth. According to McKinsey, rules banning "pooling" wouldn't damage profits or shareholder value. Rather they would require companies to look more closely at deals and communicate more with stockholders."
Cisco's position is understandable since they could now be viewed as the champion of watered stock fraud. One effect of this situation is that the SEC has prohibited Cisco Systems from doing any share repurchases since 1996. This amazing fact is largely unreported in the press. Other leading technology companies, including Intel, regularly repurchase shares to offset some of the dilution created by stock options and other factors.
2) Although legal, pooling grossly overstates future net income by excluding the cost of acquisitions and thereby fuels interest in a company's stock price. For this reason Cisco buys its research and development in the form of other companies rather than using internal development which would require the wage costs to be reflected as a charge against earnings.
This in effect crushes many small promising competitors and often has become part of their long-term strategy, at which point to sell out to Cisco.
This staggering financial fraud at Cisco is prior to considering stock option related issues, which combined with pooling, make Cisco Systems without question the greatest financial fraud of the last 50 years. Microsoft has also clearly erected a financial pyramid yet Microsoft does have a monopoly yet Cisco doesn't even manufacture its own products and has become nothing more than a marketing, legal and financial machine.
3) Pooling causes other companies stock prices that do not use this technique, those that pay wages to employees who develop new products and services, to decline correspondingly, no matter what industry they are in or how well they are managed. This eventually leads to cost cutting measures including job and benefit reductions, in order to compete for interest in their stock in the capital markets with Cisco Systems. The result is an accelerating destabilization of the economy.
This is the irony of Mr. Nader's position. Nader is focusing on those companies which are an effect of Cisco's watered stock fraud scheme rather than going to the source. One might say he is only looking at the "usual suspects." Many of these companies would not be converting to cash balance pension plans and adopting other worker unfriendly measures if it were not for a need to compete with Cisco's scheme for capital.
Businesses will do what is necessary to survive, even if that means battling within and adapting to a system of financial fraud and corruption.
4) Pooling destroys quality jobs and destabilizes many communities whose tax base is removed due to the effect of unproductive mergers that would not occur without pooling. The Sprint/MCI proposed merger is a good example as MCI is desperate to gain a presence in the wireless industry, even though Sprint can succeed fine as an independent company.
Pooling, when combined with aggressive stock option grants, has also become a means for CEO's to rob workers, pension participants, their communities and their customers. In Sprint's case somehow William Esprey, even though a great visionary leader, believed he could walk with almost $1 billion. This is an absurdity that would never occur but for pooling. It would also represent the loss of a key employer for the city of Kansas City where Sprint is headquartered.
5) Pooling is now the greatest source of inflation risk. This technique has led to many industries being dominated by a few large competitors and this is quickly resulting in higher prices due to a lack of competition. Higher inflation is bad for both consumers and investors....
Bill Parish, Parish & Company
10260 SW Greenburg Rd., Suite 400
Portland, OR 97223
Tel: 503-643-6999 - Fax: 503-221-3161
email: bill@billparish.com
www.billparish.com/20000705ciscowateredstockfraud.html
< < < FLASHBACK ... WAY BACK < < <
(Nothing ever changes!)
Dec. 26, 1938
"Fraud and Deceit"
Growing mushrooms in a subterranean room on his Cleveland estate is the hobby of pudgy, sleepy-eyed Carmi Alderman Thompson, onetime Treasurer of the U. S. (1912-13) and currently president of Fidelity Investment Association.
Old Financier Thompson may soon have more time for his mushrooms, for last week SEC asked a Federal judge in Detroit for injunctions whose effect might put Fidelity out of existence "as a fraud and deceit."
SEC has already jumped on nine other "thrift plans" this year, but mostly for minor offenses in their business of selling their shares on the installment plan. Charges in Fidelity's case are more grave: That Fidelity obtained money and property by means of untrue statements, had failed to maintain required reserves against its $276,000,000 in outstanding certificates, had resorted to interfund transfers to write up the book value of securities by "well over $1,000,000," had used investors' funds for the benefit of trie officers and directors of the company.
Fidelity was founded by Joseph Fry Paull as a loan company in Wheeling, W. Va. 27 years ago, later bought an annuity bond business, now has branches in 57 cities with 2,000 salesmen in the field selling certificates with a face value of some $6,000,000 every month. Carmi Thompson has been president for only three years. Actual boss is Founder Paull's son-in-law, onetime Assistant U. S. Attorney General John Marshall, whose family are the biggest stockholders. Sleek, bright-eyed Mr. Marshall, who is chairman of the board, said Fidelity would fight.
A good deal more wrought up than slow-spoken Carmi Thompson, Chairman Marshall pointed out that a Department of Justice investigation four years ago found nothing wrong. Snapped he: "If the SEC followed the same liquidity rule they are trying to force on us they would ruin a good many insurance companies."
From the Dec. 26, 1938 issue of TIME magazine
www.time.com/time/magazine/article/0,9171,772219,00.html
# # #
FOR MORE BUZZARDS BEHIND THE BLINDS,
SNEAK TO...
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THE SECRET NESTS
PART IV - THE NATIONAL SECURITY AGENCY
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BIRDS THAT DRINK FROM CESSPOOLS: THE CARLYLE GROUP
CONFESSIONS OF A WHISTLEBLOWER
DIRTY MONEY, DIRTY POLITICS & BISHOP ESTATE
HUD: THE HOUSING & URBAN DISASTER
NESTS OF THE INSURANCE VAMPIRES
MARSH & McLENNAN’S PUTNAM INVESTMENTS
OFFICE OF THE U.S. TRUSTEE vs. HARMON
TRANSYLVANIA TRAVELERS IN ST. PAUL
WHO'S GUARDING THE HEN HOUSE ???
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CHRONOLOGY
November 12, 2006: Originally posted on www.the-catbird-seat.net
March 13, 2007: The U.S. Dept of Justice gets Order to shut down website
March 5, 2009: Latest update on www.kycbs.net
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