The fines are not over for the big bad brokerage firms. Our country’s largest investment banks are now facing a $3 billion to $4 billion liability from lawsuits arising because of all the conflicts, scams and rip-offs that have been pulled on Americans over the past 5 years.
Citigroup said it is setting aside a reserve of $1.3 billion to address the lawsuits. Credit Suisse First Boston is putting $450 million away. J.P. Morgan is reserving $900 million.
The “global sell-out,” which we have discussed at length in this publication is still being hammered out between regulators and firms. Brokerage firms are trying there hardest right now to spin all the language being used in the settlement. An example of this is the phrase “securities fraud.”
In an interview in the New York Post, Jake Zamansky, a lawyer with Zamansky & Associates states: “This is what we’ve been waiting for, that term ‘securities fraud’ will greatly help investor attorneys such as myself to recover big rewards. When we tell arbitrators that regulators found fraud, it is the magic word to open up purses.”
No matter what happens with the language of this stupid settlement it will be years before investors decide to participate in these class action lawsuits. Even if they do win, investors will receive pittance of what they actually lost. The real winners will be the law firms and the brokerage firms themselves. Lawyers love class action suits, it is like hitting the legal lottery. Tobacco, asbestos, Microsoft etc. etc., do you honestly think that individuals who really suffered received much of anything? The brokerage firms that state they are saving their pennies for all these lawsuits are full of it. Any penalty, lawsuit, or parking ticket is passed on to consumers through higher fees. This settlement is being spun as a breakthrough, a watershed moment for the industry. It is all a pack of lies.