Another Day, Another Scam

The economic releases this morning were weak, weak, weak. But no matter, the clarion call sounds from Wall Street – “stocks are cheap” – to summon the retail investor to his duty of being shorn one more time. And, as always, he answers and the HFT boyz promptly step in the buy line ahead of him, buy the stocks he has decided he likes, mark them up, and turn around and sell them to him at inflated prices. Just another Wall Street day of theft, fraud and deception.

Speaking of which, the New York AG accused the Bank of New York of fraud in its attempted sweetheart settlement with Bank of America on behalf of mortgage investors. The Bank of New York responded by claiming, essentially, that if they weren’t allowed to defraud their clients than New York would lose its status as a financial center. Which may, in fact, be true.

A BNY Mellon spokesman told me the bank didn’t want to comment on the broader implications of the AG’s filing, but directed me to Kathryn Wylde, CEO of the Partnership for New York City, a business development non-profit. She said that the AG’s “careless action” hurts New York’s standing as a financial center.

“It’s disappointing from the standpoint of the business community that the AG would make a fraud accusation against a major financial institution — in the press,” she told me. “And to not have any consultation with the institution? The bank was blindsided by what appears to be an outrageous charge.”

Just to be clear, the AG made no press comment. The accusation was made in a court filing. The problem really is that B of A is a goner if these lawsuits succeed.

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