Back in 2006 Alayne Fleischmann witnessed massive securities fraud in banks mortgage operations. JP Morgan Chase and even the US Justice Department made efforts to silence her. Here is a powerful excerpt from this Rolling Stone article:
She was blocked at every turn: by asleep-on-the-job regulators like the Securities and Exchange Commission, by a court system that allowed Chase to use its billions to bury her evidence, and, finally, by officials like outgoing Attorney General Eric Holder, the chief architect of the crazily elaborate government policy of surrender, secrecy and cover-up. "Every time I had a chance to talk, something always got in the way," Fleischmann says.
Recently big banks like Citigroup, Chase and Bank of America were able to give "cash for secrecy. The banks paid big fines, without trials or even judges – only secret negotiations that typically ended with the public shown nothing but vague, quasi-official papers called "statements of facts," which were conveniently devoid of anything like actual facts."
Fleischmann could be sued into oblivion by these financial juggernauts but refuses complicity in what she calls "the biggest financial cover-up in history." She had humbler ambitions in her early career but worked in Wall Street to pay off her student loan debt. Seems like corruption has forced her back to her roots. It is unlikely she will be able to work on Wall Street again with the backlash that haunts whistleblowers as she has experienced.
Attorney General Eric Holder gave civil immunity to Chase. Government "investigators" did not contact Fleishmann, the key witness. In 2010 Goldman Sachs paid $550 million to settle one case and get immunity from charges in other crooked mortgage deals where it misled investors about subprime mortgages.
Cases where Fleishmann would make a great witness include the Fort Worth Employees' Retirement Fund. They asked Chase to release documents to her but a Chase attorney told the judge she could not "testify to anything of importance." The Federal Magistrate Judge James C. Francis IV took Chase's lawyers at their word and rejected access for Fleishmann. The Federal Home Loan Bank of Pittsburgh made similar request Chase stalled, then abruptly settled prevented Fleishmann from testifying.
While still hoping to be heard Fleishmann saw a speech by Holder that made her wince. The title "No Company is Too Big to Jail," sounded good in principle but "It was classic Holder: full of weird prevarication, distracting eye twitches and other facial contortions. It began with the bold rejection of the idea that overly large financial institutions would receive preferential treatment from his Justice Department." As the speech went on it evolved into saying generally that "regulators have to agree not to allow automatic penalties to kick in, so that bad banks can stay in business.." At a later speech Holder argued the institutional culture is the problem and responsibility is impossible to pin-point.
Fleishmann is confident in helping facilitate justice and that "the proof is easily there for all the elements of the crime as defined by federal law – the bank made material misrepresentations, it made material omissions, and it did so willfully and with specific intent, consciously ignoring warnings from inside the firm and out." Another investigation is under way but if you can see the trend and if the Holder's will is done, nothing will come of it.
The article concludes grimly:
The people who stole all those billions are still in place. And the bank is more untouchable than ever – former Debevoise & Plimpton hotshots Mary Jo White and Andrew Ceresny, who represented Chase for some of this case, have since been named to the two top jobs at the SEC. As for the bank itself, its stock price has gone up since the settlement and flirts weekly with five-year highs. They may lose the odd battle, but the markets clearly believe the banks won the war. Truth is one thing, and if the right people fight hard enough, you might get to hear it from time to time. But justice is different, and still far enough away.