SEC charges city of Miami with fraud - (www.cnbc.com) The Securities and Exchange Commission charged
the city of Miami and its former budget director with fraud on Friday, for
allegedly making misleading statements and omissions in bond documents in order
to mask general fund deficits. The regulatory agency said it was seeking
injunctive relief and financial penalties from the city as well as former
budget director Michael Boudreaux. Noting that the city was already under a
cease-and-desist order for similar misconduct in 2003, the regulators said in a
written statement that starting in 2008 Boudreaux had moved money among city
funds to disguise financial weaknesses from investors looking at three 2009
bond deals worth $153.5 million. "Miami actively marketed bonds to the
investing public, while hiding the true reason for interfund transfers to boost
the image of its primary operating fund," said George Canellos,
co-director of the SEC's Division of Enforcement.
Detroit bankruptcy a big threat to retirees - (www.cnbc.com) As tax revenues have shrunk, the city's
financial obligations have grown—mainly to an ever-expanding pool of 30,000
retirees, promised life-time pensions and health benefits by short-sighted
government officials over decades who consistently failed to fund those future
obligations. The city now owes more than $17 billion—roughly $25,000 for every
resident. Union officials, who have vowed to fight any effort to reduce
benefits to retirees and vested workers, claim the city has undermined the
pension fund by outsourcing city services to workers who don't pay into the
system. "As older people leave the workforce, the city has been
privatizing those jobs instead of bringing people back in to pay into the
fund," said Ed McNeil, special assistant to the president of Michigan
AFSCME Council 25, which represents city workers.
NYU
Under Scrutiny for Sweetheart Loans to Admins - (www.nypost.com) For
top brass at NYU, the eye-popping loans and lavish pay packages kept flowing
freely last year. A controversial loan to former NYU Law School Dean Richard
Revesz ballooned to $6.4 million in the fiscal year that ended Aug. 31, 2012,
according to tax filings this week reviewed by The Post. The staggering sum —
the most recent figure that’s publicly available from the school — is nearly
$900,000, or 16 percent, more than a year earlier, when Revesz was carrying an
unpaid tab of more than $5.5 million, the filings show. The makeup of the loan
isn’t broken down in the tax filings, but public property records show that it
is mostly for mortgages on a swanky West Village townhouse as well as a 65-acre
spread that Revesz and his wife share in northwestern Connecticut. “What are
the terms of this $6.4 million loan? Why did it grow by nearly $900,000?” Sen.
Chuck Grassley (R-IA) said yesterday in response to a query by The Post. “Does
it carry zero interest? Will NYU forgive it, in effect making it a gift?” An
NYU spokesman declined to comment yesterday on the status of the growing loan
to Revesz, who last October announced he was stepping down as the law school’s
dean this spring.
Treasury's
Nominee Jack Lew’s Head-Spinning Mortgage Transactions – (www.wallstreetonparade.com) Lew
will now have more embarrassing details to explain (or not, as has become
his custom). We’ve dug out the details of his head-spinning mortgage deals with
his two former employers, New York University and Citigroup. This comes on
the heels of the bombshell dropped
by Senator Orrin Hatch in the confirmation hearing regarding Lew’s cozy
employment agreement with Citigroup that paid him a bonus of $940,000 if he
could somehow manage to secure a “full time high level position with the United
States Government or a regulatory body.” The insolvent bank had just been
bailed out by the taxpayer, making the $940,000 bonus accepted by Lew in early
2009 a gift from the public purse. Yesterday, the uber conservative
editorial page of the Wall Street Journal clicked off the problems it has with
Lew: “Investor in Cayman Islands tax haven? Check. Recipient of a bonus and
corporate jet rides underwritten by taxpayers at a bailed-out bank? Check.
Executive at a university that accepted student-loan ‘kickbacks’ for steering
kids toward a favored bank? Check. Excessive compensation with minimal
disclosure? Check.” The kickbacks the editorial references were akin to
what Bernie Madoff was doing in the “legitimate” stock trading side of his
company. Madoff paid brokerage firms a penny or two a share to direct stock
traffic to his brokerage business to steal trades away from the New York Stock
Exchange. The practice was called “payment for order flow.”
NSA
Protests Reach Doorstep of Pelosi's Wealthy Donors - (www.commondreams.org) Civil
Liberties picket is a rare show of dissent from a Democratic party that has
rallied behind Obama's warrantless spying. Protests against NSA spying have
reached all the way to the home of House Democratic Leader Nancy Pelosi's big
campaign fundraiser. And this time, the protests are coming from a group that
includes professed Democrats—a notable departure from the silence and inaction
of the Democratic machine as the Obama Administration's NSA spying scandal
ripples across the globe. Over 70 people picketed Saturday afternoon outside of
the Belvedere, California home where congressman Jared Huffman was throwing a
big fundraising bash for Pelosi. The fundraiser took place just weeks after
Pelosi forcefully defended the NSA's warrantless spying programs and denounced NSA
whistleblower Edward Snowden as a 'criminal' at a NetRoots Nation conference in
San Jose, California. Her statement at the conference was met with loud boos
and heckles from the crowd.
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