(1) The DoJ should file suit in a U.S. District Court for civil conspiracy, fraud and breach of fiduciary duty against AIG and AIG’s directors. The DoJ can prosecute these defendants under the False Claims Act (31 U.S.C. § 3729–3733), the Racketeer Influenced and Corrupt Organizations Act (18 U.S.C. § 1961–1968), and the Foreign Corrupt Practices Act (15 U.S.C. §§ 78dd-1).

(2) The DoJ should add as co-defendants any counterparties to AIG’s fraudulent derivative contracts (credit default swaps, etc.) who were unjustly enriched by being paid-off using any portion of the $173 billion that AIG extorted and defraud from the federal government.

(3) DoJ should file a motion in the case seeking the imposition of a constructive trust, in equity, over the federal government’s money, and/or any assets into which the counterparties converted the federal government’s money.

(4) The DoJ should allow a jury of intellectually honest citizens determine if AIG and AIG’s directors are liable for claims against them; and if they are, the amount of money that each party unjustly enriched by AIG’s extortion and fraud scam should return to the federal government.

(5) The DoJ should take on all appeals through to the Supreme Court so that the consequences of violating the laws that AIG has violated will set precedent for prosecuting others who choose to follow AIG’s path.

See http://TexasBarWatch.US for information on how unjust enrichment claims are being used to recover lost damages in fraud and breach of fiduciary duty case. And http://Iran-Conoco-Affair.US for information on the underlying causes of action.

In Re National Gas Distributors, 369 B.R. 884 (Bankr. E.D. N.C. 2007) Judge Small cited to the Morrisson & Riegal article I cited above and also wrote:

“Congress determined that there are legitimate reasons for creating, in the financial markets, these special exceptions to the overall protections and policies of the Code. The court understands that if contracts traded on a financial market are unraveled, the market itself could become unstable and a domino effect could occur. See H.R.Rep. No. 484, 101st Cong., 2d Sess. (1990). “ [This last cite provided by Judge Small is to the House Report on the 1990 Bankruptcy Code amendments, which first added a limited number of swap-type agreements to the safe harbor protection.]

The case didn’t hinge on applying the Code to CDSs in a bankruptcy setting, but as I suspected, there aren’t a lot of bankruptcy cases that even mention this issue.

In Re Marketxt Holdings, 376 B.R. 390 (Bankr. S.D. N.Y. 2007) (stating that qualifying swap agreement payments are immune from creditor challenges under 11 USC s 546(g))

A helpful pre-2005 case is In Re Thrifty Oil, 249 B.R. 537 (S.D. Cal. 2000) (interpreting the 1990 Amendments protecting swaps):

“Several provisions in the Bankruptcy Code reflect a strong Congressional policy of protecting interest rate swaps, termination damages and the swap market from the effects of bankruptcy. In 1990, Congress amended the Bankruptcy Code to exempt interest rate swaps from provisions which could otherwise frustrate a creditor-counterparty’s ability to exercise the contractual rights conferred by an interest rate swap agreement. See Act of June 25, 1990, Pub.L. No. 101-311, 104 Stat. 267 (1990) (“Swap Amendments”). The legislative history of the Swap Amendments plainly reveals that Congress recognized the growing importance of interest rate swaps and sought to immunize the swap market from the legal risks of bankruptcy. The Judiciary Committee Report to the Senate version of the bill observed that swap agreements are “a rapidly growing and vital risk management tool in world financial markets,” frequently used by financial institutions and corporations “to minimize exposure to adverse changes in interest . . . rates.” S.Rep. No. 101-285, at 3 (May 14, 1990). Representative Schumer explained that swap agreements “offer borrowers the ability to carefully manage the interest rate or currency risks they undertake, making it easier and safer for companies . . . to raise the capital necessary for economic growth.” 136 Cong. Rec. H2284 (May 15, 1990). The House Judiciary Committee Report confirms that Congress enacted the Swap Amendments to ensure that the swap markets “are not destabilized by uncertainties regarding the treatment of their financial instruments under the Bankruptcy Code.” H.R.Rep. No. 101-484, at 1 (May 14, 1990), reprinted in 1990 U.S.C.C.A.N. 223, 223; accord 136 Cong. Rec. H2281, 2283 (May 15, 1990) (remarks of Rep. Fish) (“The swap market serves essential functions today-including reducing vulnerability to fluctuations in exchange and interest rates. Explicit Bankruptcy Code references to swap agreements will remove ambiguities that undermine the swap market.”); 136 Cong. Rec. S7535 (remarks of Sen. DeConcini) (“The effect of the swap provisions will be to provide certainty for swap transactions and thereby stabilize domestic markets by allowing the terms of the swap agreement to apply notwithstanding the bankruptcy filing.”). [bold mine]

Congress addressed these concerns by bestowing preferential treatment on the creditor-counterparty who seeks to terminate a swap agreement and collect termination damages from the bankruptcy debtor. Although the Swap Amendments do not directly address the relationship between interest rate swaps and unmatured interest, they provide two policy principles applicable to the interpretation or application of any Bankruptcy Code provision. . . . . At a minimum, federal courts should avoid interpreting [the Code] in a way that would either (1) needlessly discourage the innovation and flexibility that has made interest rate swaps such a valuable risk management and financial tool, or (2) inject unnecessary legal uncertainty into the swap markets. “

Here’s a juicy little nugget from CSX v. Children’s Inv. Fund Mgmt (UK), 562 F.Supp.2d 511 (S.D. N.Y. 2008) (not a bankruptcy case but very interesting illustration of swap trading involving JPM, GS, ML, and UBS ):

“Joe O’Flynn, the chief financial officer of TCI Fund told its board . . . that one of the reasons for using swaps is ‘the ability to purchase without disclosure to the market or the company.’”

I could have days and days of fun digging around but gotta to do some real payin’-client work.

March 24th, 2009 at 5:17 pm
@schoolsout:

I don’t have the tables but Paychex just sent us a notice and will be implementing the REDUCED federal withholding’s beginning on March 5, 2008.

_____________________________________________________

Used the table in the back supposedly, which was the “combined” table. Payroll person said that usually isn’t like that in the booklet. Should actually be a reduction instead of my first post saying increase.

You can’t nationalize if congress took away the laws that give the gov’t. the option to do so. You can’t claw back bonuses if congress writes the laws that protect these companies from gov’t. lawsuits.

Volcker: China Chose to Buy Dollars
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By Phil Izzo

When talk at the Journal’s Future of Finance Initiative turned to inflation, participants turned the resident expert: Paul Volcker. He had a lot to say.

Paul Morse for The Wall Street Journal
Paul Volcker at the Wall Street Journal’s Future of Finance Initiative in Washington, D.C.
The former Federal Reserve chairman touched on a number of subjects ranging from the Fed’s communication strategy to China’s concerns about the U.S. debt load. The latter sparked questions over whether the U.S. could default on its debt — it effectively had done that at least once, Yale professor Robert Shiller noted. When President Roosevelt took the U.S. off the gold standard and unilaterally devalued the dollar, the move wiped out some 75% of dollar-denominated debt. “Maybe I shouldn’t even mention this,” Shiller joked.

Volcker, who as head of the White House’s Economic Recovery Advisory Board is a key adviser to President Obama, expressed concerns about inflation as a way of dealing with mounting debt. “One historic way of getting yourself out of this situation — or trying to — is to inflate. Either you do it deliberately or you allow it to happen,” he said. “And if we permit that to happen then I think all these dollars will come tumbling down on us.” He said the U.S.’s greatest strength is its history and reputation, and suggested that shouldn’t be put at risk.

He also critiqued the Fed. “I get a little nervous when I see the Federal Reserve announcements that they want have the amount of inflation that’s conducive to recovery,” Volcker said. “I don’t know what ‘the amount of inflation that’s conducive to recovery’ would be appropriate. I’d much rather they say that they want to maintain stability in the currency, which is conducive to confidence and recovery.”

As for China’s criticism of the U.S., Volcker was unsympathetic. “I think the Chinese are a little disingenuous to say, ‘Now isn’t it so bad that we hold all these dollars.’ They hold all these dollars because they chose to buy the dollars, and they didn’t want to sell the dollars because they didn’t want to depreciate their currency. It was a very simple calculation on their part, so they shouldn’t come around blaming it all on us.”

The 81-year-old elder statesman commented on the current state of the U.S. economy: “We’re in a government-dependent financial system; I never thought I would live to see the day… We’ve got to fight to get away from that.”
http://blogs.wsj.com/economics/2009/03/24/volcker-china-chose-to-buy-dollars/

China ‘Super Currency’ Call Shows Dollar Concern, G-20 Ambition
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By Li Yanping

March 25 (Bloomberg) — China’s call for the creation of a new international reserve currency may signal its concern at the dollar’s weakness and ambitions for a leadership role at next week’s Group of 20 summit, economists said.

Central bank Governor Zhou Xiaochuan this week urged the International Monetary Fund to create a “super-sovereign reserve currency.” The dollar weakened after the Federal Reserve said that it would buy Treasuries and the U.S. government outlined plans to buy illiquid bank assets.

“China is concerned about the potential for a slide in the dollar as the U.S. attempts to stimulate its economy,” said Mark Williams, a London-based economist at Capital Economics Ltd. The “rare” sight of a Chinese official attempting to reframe an international debate may be “a sign of China becoming more engaged,” he said.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aywa1wOFMKmw&refer=home

it’s a rippin’ story, no doubt. sadly, merely one, of hundreds/thousands, that well delineates the *True nature of the Game at hand..

you were asking: “What to do?”

remember, not too long ago, it was illegal to teach Slaves to read. Simply, b/c Knowledge is Power.

with that, I’m sure you, already, see what follows: Spread the word, light the brushfires in others’ minds..

“A general dissolution of the principles and manners will more surely overthrow the liberties of America than the whole force of the common enemy…. While the people are virtuous they cannot be subdued; but once they lose their virtue, they will be ready to surrender their liberties to the first external or internal invader…. If virtue and knowledge are diffused among the people, they will never be enslaved. This will be their great security.”
http://quotes.liberty-tree.ca/quotes_by/samuel+adams

Sure they’ll do the pretend inquisitions. Media misdirection play.

In April of 2002 a wealth management group in Austin, Texas called Sage Advisors contracted me to translate into Spanish a significant number of very complicated documents about CLOs and CMOs and CDOs and CDSs. It was the most god-awful text I ever dealt with. First I had to figure out what I was reading in English. As I generated the translation, I realized/intuited that there was something deeply wrong about the documents. In brief, I chose to forego the pay and told them I wouldn’t be sending them the translations. They were a little peeved, but I ain’t afraid a no Texans, no how no way. Glad I didn’t. They were fixin’ to bushwhack some poor Messicun millionario and I was having no part of it. Funny thing, ole Mr. Slim doesn’t even send a Navidad card. Pinche cabron.

Quedo de Ud.

B. Traven