FROM: U.S. STATE DEPARTMENT
Remarks Before the Russia 2+2 Meeting
Remarks
John Kerry
Secretary of State
U.S. Secretary of Defense Chuck Hagel, Russian Foreign Minister Sergey Lavrov, and Defense Minister Sergey Shoygu
Benjamin Franklin Room
Washington, DC
August 9, 2013
SECRETARY KERRY: Well, good morning, everybody, and welcome. We are delighted to welcome Ministers Lavrov and Shoygu, two Sergeys. We’re happy to have them here today, and I particularly want to welcome my old friend Chuck Hagel from the Defense Department.
The relationship between the United States and Russia is, needless to say, a very important relationship, and it is marked by both shared interests and at times colliding and conflicting interests. Now, I think we’re all very clear-eyed about that. Sergey Lavrov and I are old hockey players and we both know that diplomacy, like hockey, can sometimes result in the occasional collision. So we’re candid, very candid, about the areas in which we agree, but also the areas in which we disagree.
It’s no secret that we have experienced some challenging moments, and obviously not just over the Snowden case. We will discuss these differences today for certain. But this meeting remains important above and beyond the collisions and the moments of disagreement. It is important for us to find ways to make progress on missile defense, on other strategic issues, including Afghanistan, Iran, on North Korea, and Syria. And one thing I would emphasize is that on Syria, while Sergey and I do not always agree completely on responsibility for the bloodshed or on some of the ways forward, both of us and our countries agree that to avoid institutional collapse and descent into chaos, the ultimate answer is a negotiated political solution. And Geneva 2 conference is a step toward that solution. And I look forward to a very honest and robust discussion on all of these issues.
So we welcome the delegation from Russia here today, and we look forward to a very productive, hopefully, and full conversation.
Sergey.
FOREIGN MINISTER LAVROV: (Via interpreter) Your Excellencies, ladies and gentlemen, dear colleagues, thank you for the warm hospitality extended to myself and Sergey Shoygu, Minister of Defense of the Russian Federation. We attach great importance to cooperation in this format, +2. We haven’t met in a while and it was the right idea of the two presidents, Obama and Putin, when they met June 17th on the sidelines of the G-8 summit in Lough Erne when they decided to resume the format. And thus we meet here today in Washington.
We were preparing a number of documents, a package of documents for approval at the meeting between the two presidents. I am referring to the statement on the comprehensive development of our cooperation in the context of the 80th anniversary of resumption of diplomatic relationship between our two countries we are celebrating this year. I’m also referring to the statement aimed at giving momentum to the development of trade and economic cooperation between our two countries. By design, presidents were supposed to adopt the statement in the presence of captains of business of the two countries, because we want economy to be way more dominant in our relations.
We also prepared number of statements on enhancing cooperation in combating drug threat, cooperation on – further cooperation – agreement on further cooperation of nuclear threat reduction centers, cooperation agreement on research and nuclear sector. So I want to highlight that we have laid very solid foundation for our future work, and once we start building on the foundation, once these – the instruments are approved, we will be able to enhance cooperation in different sectors, and significantly.
Today, naturally, we will discuss international issues, global security. In particular, John mentioned missile defense. We have been discussing this issue for a long time. First, we start – since we started discussions of the New START Treaty, we always spoke about missile defense, and we note with satisfaction that in his April letter to President Putin, President Obama recognized the need to take into account all factors that impact strategic stability when talking about reductions. In Lough Erne, our two presidents discussed steps that were proposed by our U.S. partners to increase transparency in the sector. Ministers of Defense of the two countries were given instructions in that respect, and at least we in Russia were prepared to table our proposals to the two presidents, and we will do so once their summit meeting takes place.
As regards crisis settlement, Syria indeed is on top of our agenda. Our goal is the same. We need to start political process. We need to stage Geneva 2 conference. And in my view, the most important task for the Geneva 2 would be honor the commitment of all G-8 leaders made in Lough Erne when they called upon both government and opposition to join efforts to fight terrorists and force them away from Syria. And I’m convinced that in the current day reality, especially in light of the fact and assessments we’ve been hearing lately, this is indeed our top priority.
Of course, Afghanistan is also important, Iranian nuclear program is, Korean peninsula nuclear issue, and many other topics will be discussed today. We are united by shared responsibility. We must prevent destabilization of the global situation. We must prevent proliferation of weapons of mass destruction. We need to ensure peaceful settlements of all crises by global community and avoid attempts to impose forced solutions irrespective of the situation. We’ve seen examples in the past, and we’ve seen that they are not working. Just like U.S., we want to see the situation get back to normal.
In Egypt, we want to see the national reconciliation process begin. We appreciate greatly efforts made by our U.S. colleagues and John Kerry personally. Especially, I’m referring to his efforts aimed at resumption of Israeli-Palestinian dialogue.
So the agenda is very intense. Of course, we have disagreements. We’ll continue discussing matters on which we disagree calmly and candidly. I recall when I first met John in his capacity, his present-day capacity, and we were having this initial conversation, if I may put it that way, he told me that our countries have special responsibility, so we need to work as grown-ups. And this is what we do. And we hope that this will be reciprocal. Thank you.
SECRETARY KERRY: Sergey, thank you very much. Appreciate that. And Secretary Hagel.
SECRETARY HAGEL: Secretary Kerry, thank you. And you and your colleagues here at the State Department, thank you for hosting today’s meeting. To our guests from the Russian Federation, welcome. We are very grateful for this opportunity to spend some time with Minister Lavrov and Minister Shoygu and your colleagues who have accompanied you to address some of the most pressing and important issues facing our countries, facing the world. Our interests, almost in every case noted, and more, are mutual interests. The world is complicated; it is combustible. To find solutions at a critical time in the world are not easy. But just as Minister Lavrov and Secretary Kerry have noted, to address these clearly, directly with each other, honestly, and to find the common denominators where we can build high ground to move forward to help resolve these great issues of our time.
We live in a very defining time in the world, and just as Minister Lavrov noted in his first conversation with Secretary Kerry, our countries have some responsibility to each other, obviously, but to the world in many respects. We are leading nations, and we must work with alliances and others as to how we find these solutions to these great challenges.
Some of the issues that we will deal with today have been noted; there are others. I particularly appreciated the opportunity to spend an hour with Minister Shoygu this morning and his colleagues as we addressed some of the more specific issues related to our defense ministries and our military-to-military cooperation. That meeting was a very positive meeting, which set the standard, I hope, for our meeting today.
I very much look forward to this meeting, and again thank Ministers Lavrov and Shoygu and their delegation for being here, and to you, Secretary Kerry, for hosting us.
SECRETARY KERRY: Thank you very much, Secretary Hagel.
Mr. Minister Shoygu.
DEFENSE MINISTER SHOYGU: (Via interpreter) Thank you, Your Excellency. Secretaries, indeed, today I had an hour-long meeting with my colleague, Secretary Hagel. We spoke about military-to-military cooperation. We spoke about military-political and military-technical cooperation as well.
I would like to thank colleagues for the wonderful arrangement of the meeting here in Washington and once again highlight that the 2+2 format is, in our view, very efficient and important.
Naturally, we couldn’t but discuss issues that are of concern to our Washington colleagues today and to us – Afghanistan, in the first place, and the forthcoming 2014 events. Of course, we spoke about Syria. We also discussed bilateral cooperation, ways to intensify our contacts. We agreed to step up cooperation between deputy ministers of the two countries. And what is no less important, we spoke about how we could give incentive to practical cooperation, such as exercise, military exercise, both naval or special forces exercise.
We also spoke about the need for more transparency. I would like to make sure that major events, such as exercise and others hosted by the Ministry of Defense in the Russian Federation, would like to invite U.S. colleagues and will do that timely. And of course we would like to invite not just military attaches, but also delegations from the U.S. capital, from Washington, to attend major events.
We started talking about missile defense, but missile defense should probably be discussed in this expanded format, the way we have gathered today. And I would like to again thank U.S. colleagues for organizing the meeting, and I hope it’s going to be as constructive as my meeting with Secretary Hagel was. Thank you.
SECRETARY KERRY: Thank you very much, Mr. Minister. Again, we emphasize the importance of this conversation and in order to do it properly, we regrettably need to ask our friends in the press if they would now leave us so that we can have an opportunity to talk. Thank you very, very much. Appreciate it.
Saturday, August 10, 2013
U.S. REOPENING 18 OF 19 RECENTLY CLOSED FACILITIES BECAUSE OF TERRORIST CONCERNS
FROM: U.S. STATE DEPARTMENT
Update on Status of Embassies and Consulates
Press Statement
Jen Psaki
Spokesperson, Office of the Spokesperson
Washington, DC
August 9, 2013
On Sunday, August 11, the Department of State will re-open 18 of the 19 embassies and consulates that were closed recently. Our embassy in Sanaa, Yemen will remain closed because of ongoing concerns about a threat stream indicating the potential for terrorist attacks emanating from Al Qaeda in the Arabian Peninsula. Our consulate in Lahore, Pakistan, which closed yesterday due to a separate credible threat to that facility, will also remain closed.
We will continue to evaluate the threats to Sanaa and Lahore and make subsequent decisions about the re-opening of those facilities based on that information. We will also continue to evaluate information about these and all of our posts and to take appropriate steps to best protect the safety of our personnel, American citizens traveling overseas, and visitors to our facilities.
Update on Status of Embassies and Consulates
Press Statement
Jen Psaki
Spokesperson, Office of the Spokesperson
Washington, DC
August 9, 2013
On Sunday, August 11, the Department of State will re-open 18 of the 19 embassies and consulates that were closed recently. Our embassy in Sanaa, Yemen will remain closed because of ongoing concerns about a threat stream indicating the potential for terrorist attacks emanating from Al Qaeda in the Arabian Peninsula. Our consulate in Lahore, Pakistan, which closed yesterday due to a separate credible threat to that facility, will also remain closed.
We will continue to evaluate the threats to Sanaa and Lahore and make subsequent decisions about the re-opening of those facilities based on that information. We will also continue to evaluate information about these and all of our posts and to take appropriate steps to best protect the safety of our personnel, American citizens traveling overseas, and visitors to our facilities.
OVER $5 MILLION AWARDED IN JOB TRAINING GRANTS TO HOMELESS WOMEN VETS, VETS WITH CHILDREN
FROM: U.S. DEPARTMENT OF LABOR
Department of Labor awards more than $5 million in job training grants to help 1,900 homeless women veterans, veterans with families
WASHINGTON —The Department of Labor’s Veterans’ Employment and Training Service today announced the award of 22 grants, totaling more than $5 million, to provide about 1,900 homeless female veterans and veterans with families with job training to help them succeed in civilian careers. The grants are being awarded under the department’s Homeless Female Veterans and Veterans with Families Program.
"These grants will offer the opportunity for a better life, providing the training and skills needed to find a job and housing,” said Secretary of Labor Tom Perez. “Our veterans have sacrificed for our nation, and job training programs offer them a path to participation in society and success in the workplace.”
The services provided by grantees will include job placement, on-the-job and classroom training, career counseling, life skills and money management mentoring, as well as help in finding housing. VETS estimates that these funds will help approximately 1,900 veterans.
Funds are being awarded on a competitive basis to state and local workforce investment boards, local public agencies and nonprofit organizations, including faith-based and community organizations. These grantees are familiar with the areas and populations to be served and have demonstrated that they can administer effective programs to help homeless veterans.
Department of Labor awards more than $5 million in job training grants to help 1,900 homeless women veterans, veterans with families
WASHINGTON —The Department of Labor’s Veterans’ Employment and Training Service today announced the award of 22 grants, totaling more than $5 million, to provide about 1,900 homeless female veterans and veterans with families with job training to help them succeed in civilian careers. The grants are being awarded under the department’s Homeless Female Veterans and Veterans with Families Program.
"These grants will offer the opportunity for a better life, providing the training and skills needed to find a job and housing,” said Secretary of Labor Tom Perez. “Our veterans have sacrificed for our nation, and job training programs offer them a path to participation in society and success in the workplace.”
The services provided by grantees will include job placement, on-the-job and classroom training, career counseling, life skills and money management mentoring, as well as help in finding housing. VETS estimates that these funds will help approximately 1,900 veterans.
Funds are being awarded on a competitive basis to state and local workforce investment boards, local public agencies and nonprofit organizations, including faith-based and community organizations. These grantees are familiar with the areas and populations to be served and have demonstrated that they can administer effective programs to help homeless veterans.
CFTC COMMISSIONER CHILTON'S SPEECH TO THE AMCOT 2013 BUSINESS CONFERENCE
FROM: U.S. COMMODITY FUTURES TRADING COMMISSION
“Cowboy Company”
Speech of Commissioner Bart Chilton to the Amcot 2013 Business Conference, Lake Tahoe, California
August 5, 2013
Hey Yeah, Hold Your Horses!
Hey yeah! Much obliged for the introduction. It sure is a fine thing to spend a spell with all you good folks in this pretty part of the American West. I always get a little “giddy-up” when dealing with cooperatives, so it’s a great treat to be with each of you.
When people think of Tahoe, they may ponder “Tahoe, oh—skiing, the Lake, maybe golf or gambling. Heck, let’s go.” But today, well, let’s switch it up and talk about the Old West and Tahoe aglow, back in the day. This is a fitting place to do just that. The Ponderosa Ranch, from Bonanza, was just over yonder, on the Nevada side of the Lake. Remember the Cartwright’s? There was Ben who survived three wives, but begets a son from each one: Adam, Hoss, and Little Joe. And just a few miles from here, they hold the Genoa Cowboy Festival at the site of the first ranch in Nevada. (Not the Mustang Ranch—that’s 15 minutes east of Reno. Hey, you at the door, where ya going?) The first ranch in Nevada was Trimmer Ranch No. 1. Let’s assume there were others. The oldest saloon in Nevada is also in Genoa. A portion of the original bar from the 1800’s is still in use. And, the local phone book lists at least 25 places to “get your boots on” and get a pair.
Right about now, some of you might be thinking, “Whoa, hold your horses there, long hair.” Isn’t this supposed to be about financial regulation or commodity markets or something?” Yeah, Sundance, it is. We’re just going to kick up the dust a bit as we “tumble along with the tumbling tumbleweeds” and have our cordial conversationalizing. After all, like George Strait sings, “I ain’t here for a long time. I’m here for a good time.” So, let’s get to it and talk some about the Old West and our financial markets today.
Has anybody seen the new Lone Ranger movie? Ooh, not too many, eh? It received some rough reviews, although I found a few good ones. It tanked on opening weekend. As of a few days ago, the film had made $85 million in the U.S., and $164 million worldwide. The production budget was $215 million. So, not good, Kemosabe. The whole thing has the good folks at Disney cogitating some on that one. But, I’ll come clean: I’m partial to it. In fact, I really liked it! Yessiree, Bob. (Jarral asked me to refer to Bob Norris as “sir.” Yessiree, Bob. Was that okay, Jarral?) In fact my wife and I saw The Lone Ranger twice. Heck, he’s an American legend. Plus, I’m a patsy for Westerns and the William Tell Overture. Can’tcha just hear that tune? Hi-Yo Silver, away! It really gets you going. You can envision Silver rearing up then taking off like wildfire and galloping along. Lots and lots of action—ooh, ooh yeah!
Well, there’s a lot of action in financial markets too. How smooth was that? But it’s true. The William Tell Overture might as well be the theme music for our work, sun-up to sun-down these days.
Blue Jean Baby & Prospectors
So, let’s travel back those golden days of yesteryear, to the mid-1800’s. The Gold Rush was going strong here in California. Prospectors came to make their fortunes. Some did. Some didn’t. In addition to those gold prospectors, some folks that assisted them also found their fortunes. Think Levi Strauss, who switched very early on from canvas to twilled cotton cloth to make his now-famous pants. He later co-patented, with a Reno tailor, the pants with rivets to make them stronger. It was the birth of blue jeans. “Blue jean baby . . . L.A. lady, seamstress for the band” (sorry). But, it was the birth of blue jeans, if you will. There was also Henry Wells and William Fargo of stagecoach and now banking renown. One of the prospectors, Charles Bowles, had a side job. He robbed Wells Fargo stagecoaches of their strongboxes ‘round these parts. He committed 28 such robberies in Northern California in eight years and became better known as Black Bart. Gotta love the name.
At the same time, a group of market prospectors in Chicago started what would become the Chicago Board of Trade. Commodity prices were in disarray with extreme volatility that didn’t do anyone any good. These market prospectors sought to fix that. Cotton wasn’t one of the original products traded, but soon, it would be.
Here we are, all these years later, and like the Western gold prospectors who changed the way they looked for gold over the years, the market prospectors—in particular the speculators—have also changed, or morphed. The question I ask as a regulator, and I know some of you ask as well, is this: Are markets still performing the purposes envisioned by those folks back in the day? There are a couple of areas, actually some new types of traders and activities, which make me wha wha wha wonder.
The Massive Passive Gang
First, we have seen a “financialization” of commodity markets by a band of traders called Massive Passives—the Massive Passive Gang (they are a “gang” for today). Investors looking to diversify their present-day strongbox portfolios sought out the derivatives world and dumped roughly $200 billion into U.S. regulated futures markets as they were “coming round the mountain” between 2005 and 2008.
Say a pension fund wanted to diversify into commodities—there’s nothing wrong with that from my perspective. They aren’t Desperados. Nevertheless, the type of trading activity they undertake is different from what speculators have typically done. Instead of getting in and out of markets, maybe based upon a drought or other natural disaster, this gang of very large funds, pension funds, some hedge funds, exchange traded funds (ETFs), and the like buy and hold their market positions. They bury them, only to come back a few years later. They are both massive in size, and fairly passive in their trading strategy—the Massive Passive Gang.
Here’s the worrisome part, pardners: too much concentration in markets by too many of the Massive Passive Gang can influence and contribute to price abnormalities. Heck, just one large massive passive can impact price if they are large enough.
Take 2008, when crude went from right around $99 at the beginning of the year to more than $145 in July, then all the way back to $31 in December. All of that took place without much change in supply or demand. Convince me the Massive Passive Gang had no role in that market distortion and I’ll wear chaps and a fringe coat to your next meeting.
On cotton futures markets, absent a few exceptions (uh hum, 2008, pardon me…frog in my throat) since their inception more than 120 years ago, things have been comparatively stable. There are lots of commercial traders, like many of you and other end-user-related traders. Of course, we still have the market speculators. We need the speculators, want ‘em, gotta have ‘em, or we have no markets.
One thing that has changed is the length of the trading day. The markets run nearly 24-7-365. That’s actually caused some problems in cotton, by the way. Also back in 2008, we saw 14 days in about a six week period where markets went lock-limit, 11 of which were before sun-up in New York—ya know, back in the Old States. There was sparse liquidity, and traders in China in the markets, and what would normally not be huge trades pushed prices to the limits. Heck, the markets were locked before folks here had their eggs and bacon.
In response to what was going on in 2008 with the Massive Passive Gang, Congress and President Obama instructed us (as part of the Dodd-Frank financial reform law in 2010) to put in place speculative position limits. Those limits would ensure that regulators have the firepower to run excessive speculation outta these markets. To date, the limits aren’t in place. There’s fierce opposition out there, but we’re fix’n to pony up and fix that soon. In September I expect we’ll get back in the saddle again and put out a proposal on position limits. And, I believe the final limits rule will be in place come January of 2014. This rule, I assure you, won’t be able to be shot down (in a blaze of glory or otherwise).
So, that’s the Massive Passive Gang. Let’s go, daylights burning and we’ve got ground to cover.
The Fastest Gunslingers
There is a lot of debate about who actually was the fastest gun in the West. Some say Doc Holliday or Johnny Ringo deserve the designation. Others suggest Bat Masterson (born Bartholomew, by the way—what’s it about those dandy Western names?). How about Billy the Kid? The Kid thought he was the one, “I’m Billy the Kid,” he said, “…the fastest draw. It’s not arrogance. It’s the truth.” Maybe Wyatt Earp? Nah, he held that, “Fast is fine, but accuracy is everything.” Annie Oakley and Calamity Jane, the renowned sharpshooters, would agree with Sherriff Earp. Some suggest the fastest gun was John Wesley Hardin, also known as “Little Arkansaw.” He claimed to have killed 42 men.
Let’s talk about some other fast guns—market gunslingers. They’re a rough bunch of young guns, and a Wild West breed all their own. Not a horse, like the Lone Ranger’s “Silver,” or a cow, coyote or rattlesnake, but a cheetah. That’s right, a cheetah. Not a card cheater who sits in the gunfighter’s chair in the corner saloon, but a cheetah as in the fastest land animal. Those cats are the fastest trading guns. Sometimes you just gotta mix it up.
Now, I’m asking you to envision a cheetah with a hat (let’s say a ten-gallon hat, just for the hell of it), tooled boots with silver spurs, and a low-slung gun belt on those slim cheetah hips. That cheetah gunslinger is eyeballing us from 40 paces. Will we be fast enough to take him? In truth, nah, probably not. They usually win, those cheetahs, with their fancy spurs. Who do they think they are?
The thing is, those cheetahs gunslingers are always so hell-bent for leather when they trade that they are impacting the ability of you guys, and other end-users, to do what you need to do, to hedge. I mean, pardon you guys to pieces for simply trying to hedge your legitimate business risks. For crying out loud, you aren’t looking for a gunfight. You just wanna do what those original prospectors set in motion all those years ago. Yet, here you are, staring down the barrel of a gun. And . . . that gun is held by a damn cat, with a hat . . . at that!
How Fast is Fast?
How fast are these cheetah gunslingers? Well, it’s about a thousand miles from New York to Chicago. A recent article in the Financial Times pointed out that communications cables laid between the two cities meant that a message could be delivered in 14.5 milliseconds—70 round trips per second. Now that’s fast—cheetah gunslinger fast. But not fast enough for some who use those cables to trade commodities. It’s been reported that at least one company has cut that time down to 13.1 milliseconds and that microwave capability could get it under 10 milliseconds. Holy smokes!
Let me give you some of our own data: over the last year, we analyzed 20 million trading seconds. Of those 20 million, we pinpointed 189,000 seconds, primarily around the open and close of markets. In those 189,000 seconds we found something astounding: cheetahs traded at rates of 100-500 trades per second in a major commodity market! Trading 100 to 500 times per second, as a gang, in one commodity contract? That’s pretty hard to wrap your head around. Heck, it’s easier to imagine our cheetah friends in their gunfighter get-up.
Why this need for speed? It’s not the need to stay alive like an Old West gunfighter, of course not. It’s about the dinero, the loot. A study late last year, which was conducted in conjunction with the CFTC, said in essence that cheetah trading imposes quantifiable costs. Aggressive cheetahs make a lot of money, and they make their biggest paydays when they trade with small, traditional traders. A cheetah trading with a fundamental trader—like a lot of you—makes $1.92 on a $50,000 trade, but if that same trade is made with a small trader, the number goes up to $3.49. This could end up pushing smaller, slow-shooters out of markets and it doesn’t help the fundamental traders either.
But that’s not the only issue with the cheetahs, no sirree.
Ghost Town Liquidity
The name “Tahoe” actually came from the name “Washoe,” which is the name of the Native Americas that inhabited this area for something like 6,000 years. In fact, Washoe City is located just south of Reno. In the 1860’s it was booming with a sawmill for lumber used in Virginia City (ya know, where the Cartwright clan went when they went to town—da ta da da da, da da da, ta da da, da da da daa). Washoe City was even the county seat of Washoe County (it’s now Reno). But today, you can’t even visit Washoe City. It’s all fenced off. Washoe City is an Old West ghost town.
That brings us to another problem area with the cheetah gang. I told you it was like the William Tell Overture—lots going on. In fact, this ghost town thing is sort of a dirty little secret. It involves “wash” trading, where cheetahs (and sometimes others) trade with themselves. They make a bid or offer and they hit it themselves. Putting a price out and hitting it yourself, you take no risk, yet create the impression that a legitimate trade has occurred. That entices others—easy prey—to get into markets. But the liquidity isn’t real. It’s ghost town liquidity. If this was only for a few trades, it wouldn’t make much difference. However, there is a lot of ghost town liquidity. I mean a whole lot. “Voluminous” is the word I’ve used. And if this ghost town trading amounts to wash trading, it’s not only wrong, but based upon the facts and circumstances, it is illegal. That’s because wash trading is clearly unfair to other traders, and it can impact price discovery which is unfair to consumers.
Wash Blockers—20-Mule Team Borax!
One might think the exchanges would put in place what are called “wash blockers.” That sounds like a commercial: “Wash blockers—for cleaner markets!” Remember Death Valley Days? “Brought to you by 20-Mule Team Borax.” The show was Ronald Reagan’s last acting gig before he went into politics.
Wash blocker technology is available and exchanges are starting to put more of an emphasis on it. In my view, traders shouldn’t be able to just opt-in to the technology requirements if they want to. It needs to be mandatory that they utilize wash blocker technology. Otherwise, we’ll still have ghost town liquidity and markets that aren’t necessarily fair and effective.
So, that’s the cheetah gang and we did the Massive Passive Gang. Let’s head down the trail to our last topics.
Bank Ownership
When we think about how the West was won, it had a lot to do with the railroads. As the Iron Horses moved from east to west, towns along the line grew. But towns could never ever have amounted to much without banks. The banks helped build the towns. They made loans to individuals and businesses. They helped fuel economic development. They built communities. Some refer to the Winchester rifle as “The gun that won the West.” But I’ll tell ya, a good case could be made that banks won the West.
However, just like markets have morphed with the Massive Passive Gang, with non-stop trading, with our cheetah gunslingers and their “gee whiz” technology, so too have the banks changed. And it seems some have lost sight of those noble endeavors for which they are known as the country moved west.
A decade ago, in the shifting climate to allow banks more freedom, several policy changes took place. One such change was approved by the Federal Reserve. It allowed the ownership of totally unrelated businesses. The idea was that it was a good thing for the banks to be diversified. It was okay to get away from their sweet spot—ya know . . . banking. Like folks do when they see an opening, the banks got into all sorts of other businesses—businesses which include physical commodities like agriculture, energy or metals. It also includes owing the storage or warehousing facilities of commodities, and/or the delivery mechanisms of commodities—like pipelines, shipping, rail or other transportation interests.
Bank Ownership: The Data
You might wonder, “What it is they actually do own?” Well, let me tell you a story. A couple of weeks ago we rounded up a posse to look and see what actually is owned by the banks. I’m a financial regulator; you’d think it would be a piece of pie to find a list of what they own, right? I mean, it would be understandable if there were certain business reasons why a few particulars of the ownership information might not be available to the public. Nevertheless, you’d think I could get it. After all, banks own commercial interests that can impact prices, and at the same time their trading desks are all over the very same markets. There are obvious conflicts of interest. I’m not saying there have been any violations of the law, but how would we even know?
Our little posse did find that Morgan Stanley has ownership stakes in oil tankers and a fuel distributor. And, of course, they also trade crude oil and other energy contracts. Parts of Citigroup, Goldman Sachs and Bank of America own or have owned power plants. They also trade energy contracts. And, everybody’s been talking about Goldman Sachs holding onto aluminum at warehouses they own. Some say that’s consequently driving the up the price of beer and soda, while the bank collects storage fees. And, they trade aluminum. JP Morgan also owns similar warehouses, although they said last week they may get out of commodities. We’ll see. Oh, and by the way, Barclays and JP Morgan are putting out hundreds of millions of dollars in restitution for getting caught rigging electricity prices. There is that.
But, getting other information on ownership of the banks has been super difficult, at best. Maybe we need a “WANTED” poster:
W A N T E D
Information leading to the apprehension of ownership data related to large investment banks, including but not limited to businesses related to commodities, the storage and warehousing of commodities, and/or the delivery mechanisms of commodities.
This might be a little amusing if it weren’t such a serious thing that the information isn’t readily available. In fact, its sorta deja-oohish in that it’s reminiscent of that period of time, just before the financial crisis, when folks were asking questions about the valuation of credit default swaps (CDSs). Nobody could turn up much of anything. We all know how that troubled tale of tragedy ended . . . in tragedy and economic catastrophe. So, this is a big deal.
Tracking down this information should be an immediate responsibility of regulators. It’s gonna require more bodies and more horses, and maybe that “WANTED” poster, but we need to find out specifically—and comprehensively—what banks own relating to physical commodities. Furthermore, the basic ownership information should be transparent, certainly to regulators. And public information should be easily accessible on the Federal Reserve’s website or someplace where people can view it without needing a bloodhound to track it down.
Bank Ownership: The Work-Around (Volcker & Limits)
There is also a related issue with ownership of commodities by banks. If the banks own the physical commodities, warehousing or delivery mechanisms, they may then contend that their “legitimate business interests” should allow them to hedge those risks, in addition to hedging their financial proprietary risks.
This approach could amount to yet another work-around the Volcker Rule. Recall the Volcker Rule? It’s a provision of Dodd –Frank that requires that banks no longer be able to conduct speculative trading. They may only hedge their legitimate business risk. But, if they own the physical, then it muddies up what is their business risk.
I’ve written to Chairman Bernanke about this issue (and am discussing it for the first time today). In the letter, I urge that the final Volcker Rule be written in a precise and surefooted fashion that allows only for appropriate hedging of banks proprietary risks, but firmly prohibits speculation. I even provided rule text language for his consideration. I won’t vote for a final Volcker Rule unless this language, or something substantially similar, is included in the final text.
Incidentally, owning the physical could also be used as a way around speculative position limits. (I’m working on that one.) We’d be fools to think the bank lawyers aren’t thinking about these work-around end runs.
Bank Ownership: Reverse the Policy!
One easy way to stop the work-around is to simply have the Federal Reserve’s ownership policy reversed. Why can’t the banks, just can’t get back to banking? That’s my preferred policy. I don’t want a bank owning an electric service, or cotton, corn or feedlots. I don’t want banks owning warehouses, whether they have aluminum, gold, silver, or anything else in them. Get back (Jo Jo) to making loans to individuals and businesses to help get our economy on track. We don’t want Cowboy Companies out there. We don’t want a Wild West anymore when it comes to our economy. Do what you did when the West was won, when you helped to build the frontier. That is such an honorable, worthy, noble and essential endeavor. Plus, you were so very good at accomplishing so much!
I hope the Federal Reserve, which announced last week that the policy was being reviewed, actually reverses it. They can and should reverse it. Sure, if they have to grandfather some of the bank ownership in for a time-certain, I get that. The banks shouldn’t be required to take a loss due to the policy change. But the policy should, in fact, change, and soon. And, if the Fed doesn’t do so, I expect there will be efforts in Congress, and I hope there are, to prohibit such ownership by changing the law.
Cowboy Ethics
Our trail has come to an end. However, I’d like to leave you with this: there’s a book out by a gentleman named James P. Owen who’s a cowboy and western lover and who also happens to be a 40-year veteran of Wall Street. The book’s called Cowboy Ethics. It is sort of a coffee table book with a message—great photography, too. Owen opines that businesses today, especially the behemoth banks on Wall Street, need to live less by the “greed is good” mantra and more like the Code of the West. “When you make a promise, keep it.” “Remember that some things aren’t for sale.” “Know where to draw the line.” Do those sound like mantras for Wall Street? Unfortunately—not so much. You folks can recall the horrific headlines of malfeasance as well as anyone. A recent study queried 250 financial service industry insiders and 23 percent said they had “observed or had firsthand knowledge of wrongdoing in the workplace.”
For a while now, I’ve been saying that there needs to be a culture shift in the financial sector. How about the responsibility to customers, to society and the economy? Maybe the Code of the West is just the thing.
Conclusion—Shut Up
There’s a scene near the end of The Lone Ranger where, as the sun is setting, the masked man rears up on Silver, and says the famous “Hi-Yo Silver, away!”—only time in the movie he actually says it. And Johnny Depp, as Tonto, says, “Don’t ever do that again.” Well, I’m not going to stop working on these issues. I’m going to remember the Old West and how and why these markets began. I’m going to talk about them and work on them again and again. Even if the William Tell Overture remains our theme song.
However, there’s another old cowboy adage, “Never miss a good chance to shut up.” So, for now I’ll just say . . . thanks, Kemosabes.
“Cowboy Company”
Speech of Commissioner Bart Chilton to the Amcot 2013 Business Conference, Lake Tahoe, California
August 5, 2013
Hey Yeah, Hold Your Horses!
Hey yeah! Much obliged for the introduction. It sure is a fine thing to spend a spell with all you good folks in this pretty part of the American West. I always get a little “giddy-up” when dealing with cooperatives, so it’s a great treat to be with each of you.
When people think of Tahoe, they may ponder “Tahoe, oh—skiing, the Lake, maybe golf or gambling. Heck, let’s go.” But today, well, let’s switch it up and talk about the Old West and Tahoe aglow, back in the day. This is a fitting place to do just that. The Ponderosa Ranch, from Bonanza, was just over yonder, on the Nevada side of the Lake. Remember the Cartwright’s? There was Ben who survived three wives, but begets a son from each one: Adam, Hoss, and Little Joe. And just a few miles from here, they hold the Genoa Cowboy Festival at the site of the first ranch in Nevada. (Not the Mustang Ranch—that’s 15 minutes east of Reno. Hey, you at the door, where ya going?) The first ranch in Nevada was Trimmer Ranch No. 1. Let’s assume there were others. The oldest saloon in Nevada is also in Genoa. A portion of the original bar from the 1800’s is still in use. And, the local phone book lists at least 25 places to “get your boots on” and get a pair.
Right about now, some of you might be thinking, “Whoa, hold your horses there, long hair.” Isn’t this supposed to be about financial regulation or commodity markets or something?” Yeah, Sundance, it is. We’re just going to kick up the dust a bit as we “tumble along with the tumbling tumbleweeds” and have our cordial conversationalizing. After all, like George Strait sings, “I ain’t here for a long time. I’m here for a good time.” So, let’s get to it and talk some about the Old West and our financial markets today.
Has anybody seen the new Lone Ranger movie? Ooh, not too many, eh? It received some rough reviews, although I found a few good ones. It tanked on opening weekend. As of a few days ago, the film had made $85 million in the U.S., and $164 million worldwide. The production budget was $215 million. So, not good, Kemosabe. The whole thing has the good folks at Disney cogitating some on that one. But, I’ll come clean: I’m partial to it. In fact, I really liked it! Yessiree, Bob. (Jarral asked me to refer to Bob Norris as “sir.” Yessiree, Bob. Was that okay, Jarral?) In fact my wife and I saw The Lone Ranger twice. Heck, he’s an American legend. Plus, I’m a patsy for Westerns and the William Tell Overture. Can’tcha just hear that tune? Hi-Yo Silver, away! It really gets you going. You can envision Silver rearing up then taking off like wildfire and galloping along. Lots and lots of action—ooh, ooh yeah!
Well, there’s a lot of action in financial markets too. How smooth was that? But it’s true. The William Tell Overture might as well be the theme music for our work, sun-up to sun-down these days.
Blue Jean Baby & Prospectors
So, let’s travel back those golden days of yesteryear, to the mid-1800’s. The Gold Rush was going strong here in California. Prospectors came to make their fortunes. Some did. Some didn’t. In addition to those gold prospectors, some folks that assisted them also found their fortunes. Think Levi Strauss, who switched very early on from canvas to twilled cotton cloth to make his now-famous pants. He later co-patented, with a Reno tailor, the pants with rivets to make them stronger. It was the birth of blue jeans. “Blue jean baby . . . L.A. lady, seamstress for the band” (sorry). But, it was the birth of blue jeans, if you will. There was also Henry Wells and William Fargo of stagecoach and now banking renown. One of the prospectors, Charles Bowles, had a side job. He robbed Wells Fargo stagecoaches of their strongboxes ‘round these parts. He committed 28 such robberies in Northern California in eight years and became better known as Black Bart. Gotta love the name.
At the same time, a group of market prospectors in Chicago started what would become the Chicago Board of Trade. Commodity prices were in disarray with extreme volatility that didn’t do anyone any good. These market prospectors sought to fix that. Cotton wasn’t one of the original products traded, but soon, it would be.
Here we are, all these years later, and like the Western gold prospectors who changed the way they looked for gold over the years, the market prospectors—in particular the speculators—have also changed, or morphed. The question I ask as a regulator, and I know some of you ask as well, is this: Are markets still performing the purposes envisioned by those folks back in the day? There are a couple of areas, actually some new types of traders and activities, which make me wha wha wha wonder.
The Massive Passive Gang
First, we have seen a “financialization” of commodity markets by a band of traders called Massive Passives—the Massive Passive Gang (they are a “gang” for today). Investors looking to diversify their present-day strongbox portfolios sought out the derivatives world and dumped roughly $200 billion into U.S. regulated futures markets as they were “coming round the mountain” between 2005 and 2008.
Say a pension fund wanted to diversify into commodities—there’s nothing wrong with that from my perspective. They aren’t Desperados. Nevertheless, the type of trading activity they undertake is different from what speculators have typically done. Instead of getting in and out of markets, maybe based upon a drought or other natural disaster, this gang of very large funds, pension funds, some hedge funds, exchange traded funds (ETFs), and the like buy and hold their market positions. They bury them, only to come back a few years later. They are both massive in size, and fairly passive in their trading strategy—the Massive Passive Gang.
Here’s the worrisome part, pardners: too much concentration in markets by too many of the Massive Passive Gang can influence and contribute to price abnormalities. Heck, just one large massive passive can impact price if they are large enough.
Take 2008, when crude went from right around $99 at the beginning of the year to more than $145 in July, then all the way back to $31 in December. All of that took place without much change in supply or demand. Convince me the Massive Passive Gang had no role in that market distortion and I’ll wear chaps and a fringe coat to your next meeting.
On cotton futures markets, absent a few exceptions (uh hum, 2008, pardon me…frog in my throat) since their inception more than 120 years ago, things have been comparatively stable. There are lots of commercial traders, like many of you and other end-user-related traders. Of course, we still have the market speculators. We need the speculators, want ‘em, gotta have ‘em, or we have no markets.
One thing that has changed is the length of the trading day. The markets run nearly 24-7-365. That’s actually caused some problems in cotton, by the way. Also back in 2008, we saw 14 days in about a six week period where markets went lock-limit, 11 of which were before sun-up in New York—ya know, back in the Old States. There was sparse liquidity, and traders in China in the markets, and what would normally not be huge trades pushed prices to the limits. Heck, the markets were locked before folks here had their eggs and bacon.
In response to what was going on in 2008 with the Massive Passive Gang, Congress and President Obama instructed us (as part of the Dodd-Frank financial reform law in 2010) to put in place speculative position limits. Those limits would ensure that regulators have the firepower to run excessive speculation outta these markets. To date, the limits aren’t in place. There’s fierce opposition out there, but we’re fix’n to pony up and fix that soon. In September I expect we’ll get back in the saddle again and put out a proposal on position limits. And, I believe the final limits rule will be in place come January of 2014. This rule, I assure you, won’t be able to be shot down (in a blaze of glory or otherwise).
So, that’s the Massive Passive Gang. Let’s go, daylights burning and we’ve got ground to cover.
The Fastest Gunslingers
There is a lot of debate about who actually was the fastest gun in the West. Some say Doc Holliday or Johnny Ringo deserve the designation. Others suggest Bat Masterson (born Bartholomew, by the way—what’s it about those dandy Western names?). How about Billy the Kid? The Kid thought he was the one, “I’m Billy the Kid,” he said, “…the fastest draw. It’s not arrogance. It’s the truth.” Maybe Wyatt Earp? Nah, he held that, “Fast is fine, but accuracy is everything.” Annie Oakley and Calamity Jane, the renowned sharpshooters, would agree with Sherriff Earp. Some suggest the fastest gun was John Wesley Hardin, also known as “Little Arkansaw.” He claimed to have killed 42 men.
Let’s talk about some other fast guns—market gunslingers. They’re a rough bunch of young guns, and a Wild West breed all their own. Not a horse, like the Lone Ranger’s “Silver,” or a cow, coyote or rattlesnake, but a cheetah. That’s right, a cheetah. Not a card cheater who sits in the gunfighter’s chair in the corner saloon, but a cheetah as in the fastest land animal. Those cats are the fastest trading guns. Sometimes you just gotta mix it up.
Now, I’m asking you to envision a cheetah with a hat (let’s say a ten-gallon hat, just for the hell of it), tooled boots with silver spurs, and a low-slung gun belt on those slim cheetah hips. That cheetah gunslinger is eyeballing us from 40 paces. Will we be fast enough to take him? In truth, nah, probably not. They usually win, those cheetahs, with their fancy spurs. Who do they think they are?
The thing is, those cheetahs gunslingers are always so hell-bent for leather when they trade that they are impacting the ability of you guys, and other end-users, to do what you need to do, to hedge. I mean, pardon you guys to pieces for simply trying to hedge your legitimate business risks. For crying out loud, you aren’t looking for a gunfight. You just wanna do what those original prospectors set in motion all those years ago. Yet, here you are, staring down the barrel of a gun. And . . . that gun is held by a damn cat, with a hat . . . at that!
How Fast is Fast?
How fast are these cheetah gunslingers? Well, it’s about a thousand miles from New York to Chicago. A recent article in the Financial Times pointed out that communications cables laid between the two cities meant that a message could be delivered in 14.5 milliseconds—70 round trips per second. Now that’s fast—cheetah gunslinger fast. But not fast enough for some who use those cables to trade commodities. It’s been reported that at least one company has cut that time down to 13.1 milliseconds and that microwave capability could get it under 10 milliseconds. Holy smokes!
Let me give you some of our own data: over the last year, we analyzed 20 million trading seconds. Of those 20 million, we pinpointed 189,000 seconds, primarily around the open and close of markets. In those 189,000 seconds we found something astounding: cheetahs traded at rates of 100-500 trades per second in a major commodity market! Trading 100 to 500 times per second, as a gang, in one commodity contract? That’s pretty hard to wrap your head around. Heck, it’s easier to imagine our cheetah friends in their gunfighter get-up.
Why this need for speed? It’s not the need to stay alive like an Old West gunfighter, of course not. It’s about the dinero, the loot. A study late last year, which was conducted in conjunction with the CFTC, said in essence that cheetah trading imposes quantifiable costs. Aggressive cheetahs make a lot of money, and they make their biggest paydays when they trade with small, traditional traders. A cheetah trading with a fundamental trader—like a lot of you—makes $1.92 on a $50,000 trade, but if that same trade is made with a small trader, the number goes up to $3.49. This could end up pushing smaller, slow-shooters out of markets and it doesn’t help the fundamental traders either.
But that’s not the only issue with the cheetahs, no sirree.
Ghost Town Liquidity
The name “Tahoe” actually came from the name “Washoe,” which is the name of the Native Americas that inhabited this area for something like 6,000 years. In fact, Washoe City is located just south of Reno. In the 1860’s it was booming with a sawmill for lumber used in Virginia City (ya know, where the Cartwright clan went when they went to town—da ta da da da, da da da, ta da da, da da da daa). Washoe City was even the county seat of Washoe County (it’s now Reno). But today, you can’t even visit Washoe City. It’s all fenced off. Washoe City is an Old West ghost town.
That brings us to another problem area with the cheetah gang. I told you it was like the William Tell Overture—lots going on. In fact, this ghost town thing is sort of a dirty little secret. It involves “wash” trading, where cheetahs (and sometimes others) trade with themselves. They make a bid or offer and they hit it themselves. Putting a price out and hitting it yourself, you take no risk, yet create the impression that a legitimate trade has occurred. That entices others—easy prey—to get into markets. But the liquidity isn’t real. It’s ghost town liquidity. If this was only for a few trades, it wouldn’t make much difference. However, there is a lot of ghost town liquidity. I mean a whole lot. “Voluminous” is the word I’ve used. And if this ghost town trading amounts to wash trading, it’s not only wrong, but based upon the facts and circumstances, it is illegal. That’s because wash trading is clearly unfair to other traders, and it can impact price discovery which is unfair to consumers.
Wash Blockers—20-Mule Team Borax!
One might think the exchanges would put in place what are called “wash blockers.” That sounds like a commercial: “Wash blockers—for cleaner markets!” Remember Death Valley Days? “Brought to you by 20-Mule Team Borax.” The show was Ronald Reagan’s last acting gig before he went into politics.
Wash blocker technology is available and exchanges are starting to put more of an emphasis on it. In my view, traders shouldn’t be able to just opt-in to the technology requirements if they want to. It needs to be mandatory that they utilize wash blocker technology. Otherwise, we’ll still have ghost town liquidity and markets that aren’t necessarily fair and effective.
So, that’s the cheetah gang and we did the Massive Passive Gang. Let’s head down the trail to our last topics.
Bank Ownership
When we think about how the West was won, it had a lot to do with the railroads. As the Iron Horses moved from east to west, towns along the line grew. But towns could never ever have amounted to much without banks. The banks helped build the towns. They made loans to individuals and businesses. They helped fuel economic development. They built communities. Some refer to the Winchester rifle as “The gun that won the West.” But I’ll tell ya, a good case could be made that banks won the West.
However, just like markets have morphed with the Massive Passive Gang, with non-stop trading, with our cheetah gunslingers and their “gee whiz” technology, so too have the banks changed. And it seems some have lost sight of those noble endeavors for which they are known as the country moved west.
A decade ago, in the shifting climate to allow banks more freedom, several policy changes took place. One such change was approved by the Federal Reserve. It allowed the ownership of totally unrelated businesses. The idea was that it was a good thing for the banks to be diversified. It was okay to get away from their sweet spot—ya know . . . banking. Like folks do when they see an opening, the banks got into all sorts of other businesses—businesses which include physical commodities like agriculture, energy or metals. It also includes owing the storage or warehousing facilities of commodities, and/or the delivery mechanisms of commodities—like pipelines, shipping, rail or other transportation interests.
Bank Ownership: The Data
You might wonder, “What it is they actually do own?” Well, let me tell you a story. A couple of weeks ago we rounded up a posse to look and see what actually is owned by the banks. I’m a financial regulator; you’d think it would be a piece of pie to find a list of what they own, right? I mean, it would be understandable if there were certain business reasons why a few particulars of the ownership information might not be available to the public. Nevertheless, you’d think I could get it. After all, banks own commercial interests that can impact prices, and at the same time their trading desks are all over the very same markets. There are obvious conflicts of interest. I’m not saying there have been any violations of the law, but how would we even know?
Our little posse did find that Morgan Stanley has ownership stakes in oil tankers and a fuel distributor. And, of course, they also trade crude oil and other energy contracts. Parts of Citigroup, Goldman Sachs and Bank of America own or have owned power plants. They also trade energy contracts. And, everybody’s been talking about Goldman Sachs holding onto aluminum at warehouses they own. Some say that’s consequently driving the up the price of beer and soda, while the bank collects storage fees. And, they trade aluminum. JP Morgan also owns similar warehouses, although they said last week they may get out of commodities. We’ll see. Oh, and by the way, Barclays and JP Morgan are putting out hundreds of millions of dollars in restitution for getting caught rigging electricity prices. There is that.
But, getting other information on ownership of the banks has been super difficult, at best. Maybe we need a “WANTED” poster:
W A N T E D
Information leading to the apprehension of ownership data related to large investment banks, including but not limited to businesses related to commodities, the storage and warehousing of commodities, and/or the delivery mechanisms of commodities.
This might be a little amusing if it weren’t such a serious thing that the information isn’t readily available. In fact, its sorta deja-oohish in that it’s reminiscent of that period of time, just before the financial crisis, when folks were asking questions about the valuation of credit default swaps (CDSs). Nobody could turn up much of anything. We all know how that troubled tale of tragedy ended . . . in tragedy and economic catastrophe. So, this is a big deal.
Tracking down this information should be an immediate responsibility of regulators. It’s gonna require more bodies and more horses, and maybe that “WANTED” poster, but we need to find out specifically—and comprehensively—what banks own relating to physical commodities. Furthermore, the basic ownership information should be transparent, certainly to regulators. And public information should be easily accessible on the Federal Reserve’s website or someplace where people can view it without needing a bloodhound to track it down.
Bank Ownership: The Work-Around (Volcker & Limits)
There is also a related issue with ownership of commodities by banks. If the banks own the physical commodities, warehousing or delivery mechanisms, they may then contend that their “legitimate business interests” should allow them to hedge those risks, in addition to hedging their financial proprietary risks.
This approach could amount to yet another work-around the Volcker Rule. Recall the Volcker Rule? It’s a provision of Dodd –Frank that requires that banks no longer be able to conduct speculative trading. They may only hedge their legitimate business risk. But, if they own the physical, then it muddies up what is their business risk.
I’ve written to Chairman Bernanke about this issue (and am discussing it for the first time today). In the letter, I urge that the final Volcker Rule be written in a precise and surefooted fashion that allows only for appropriate hedging of banks proprietary risks, but firmly prohibits speculation. I even provided rule text language for his consideration. I won’t vote for a final Volcker Rule unless this language, or something substantially similar, is included in the final text.
Incidentally, owning the physical could also be used as a way around speculative position limits. (I’m working on that one.) We’d be fools to think the bank lawyers aren’t thinking about these work-around end runs.
Bank Ownership: Reverse the Policy!
One easy way to stop the work-around is to simply have the Federal Reserve’s ownership policy reversed. Why can’t the banks, just can’t get back to banking? That’s my preferred policy. I don’t want a bank owning an electric service, or cotton, corn or feedlots. I don’t want banks owning warehouses, whether they have aluminum, gold, silver, or anything else in them. Get back (Jo Jo) to making loans to individuals and businesses to help get our economy on track. We don’t want Cowboy Companies out there. We don’t want a Wild West anymore when it comes to our economy. Do what you did when the West was won, when you helped to build the frontier. That is such an honorable, worthy, noble and essential endeavor. Plus, you were so very good at accomplishing so much!
I hope the Federal Reserve, which announced last week that the policy was being reviewed, actually reverses it. They can and should reverse it. Sure, if they have to grandfather some of the bank ownership in for a time-certain, I get that. The banks shouldn’t be required to take a loss due to the policy change. But the policy should, in fact, change, and soon. And, if the Fed doesn’t do so, I expect there will be efforts in Congress, and I hope there are, to prohibit such ownership by changing the law.
Cowboy Ethics
Our trail has come to an end. However, I’d like to leave you with this: there’s a book out by a gentleman named James P. Owen who’s a cowboy and western lover and who also happens to be a 40-year veteran of Wall Street. The book’s called Cowboy Ethics. It is sort of a coffee table book with a message—great photography, too. Owen opines that businesses today, especially the behemoth banks on Wall Street, need to live less by the “greed is good” mantra and more like the Code of the West. “When you make a promise, keep it.” “Remember that some things aren’t for sale.” “Know where to draw the line.” Do those sound like mantras for Wall Street? Unfortunately—not so much. You folks can recall the horrific headlines of malfeasance as well as anyone. A recent study queried 250 financial service industry insiders and 23 percent said they had “observed or had firsthand knowledge of wrongdoing in the workplace.”
For a while now, I’ve been saying that there needs to be a culture shift in the financial sector. How about the responsibility to customers, to society and the economy? Maybe the Code of the West is just the thing.
Conclusion—Shut Up
There’s a scene near the end of The Lone Ranger where, as the sun is setting, the masked man rears up on Silver, and says the famous “Hi-Yo Silver, away!”—only time in the movie he actually says it. And Johnny Depp, as Tonto, says, “Don’t ever do that again.” Well, I’m not going to stop working on these issues. I’m going to remember the Old West and how and why these markets began. I’m going to talk about them and work on them again and again. Even if the William Tell Overture remains our theme song.
However, there’s another old cowboy adage, “Never miss a good chance to shut up.” So, for now I’ll just say . . . thanks, Kemosabes.
LOS ALAMOS SCIENTIST TO DISCUSS IF BEHAVIOR IS PRODUCT OF DNA OR ENVIRONMENT
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| Photo Caption: Cells in the human body contains strands of DNA nearly 10 feet long that look like this and are packed into cellular sacks less than a millionth of an inch in diameter. Credit: LANL |
Lab’s Frontiers in Science lectures focus on epigenetics
Is behavior hardwired by DNA or a product of environment?
LOS ALAMOS, N.M., August 7, 2013—Los Alamos National Laboratory scientist Karissa Sanbonmatsu, will discuss epigenetics in a series of Frontiers in Science lectures beginning Tuesday, Aug. 13, at the New Mexico Museum of Natural History and Science in Albuquerque.
The 7 p.m. talk, titled “Nature, Nurture or Neither: The New Science of Epigenetics,” focuses on the age-old question of “nature versus nurture,” and also looks at how social interactions and environmental factors play a role in programming your DNA.
“Over the past decade, epigenetics research has and continues to unveil a whole new kind of biological circuitry,” Sanbonmatsu said. “The act of a mother nurturing or not nurturing her baby programs DNA; so literally, nurture directly affects nature in a way that nature and nurture are fused together.”
The new science of epigenetics studies how DNA is reprogrammed at the molecular level. DNA is often considered the blueprint of life, however, environmental factors and social interactions during formative years can affect genes for more than three generations. This heritable switching is called “epigenetics” and has been associated with diet, exercise, mate preference, depression, autism, eating disorders and response to abuse.
Sanbonmatsu, of Los Alamos’ Theoretical Biology and Biophysics Group, will discuss the new science of epigenetics and how it is related to a wide range of biological phenomena. Her research involves how DNA can be reprogrammed throughout life and how the missing link could be RNA molecules.
“We have been lucky enough to land on the cutting edge of this field, in the area of long non-coding RNAs, which has absolutely exploded in the last three years,” Sanbonmatsu said. “With many suggesting that the number of long non-coding RNAs may rival the number of proteins, the landscape of molecular biology may look entirely different ten years from now."
These Frontiers in Science lectures all begin at 7 p.m., at the following locations:
Tuesday, Aug. 13, New Mexico Museum of Natural History and Science, 1801 Mountain Road NW, Albuquerque
Thursday, Aug. 15, Nick L. Salazar Center for the Arts, Northern New Mexico College, 921 Paseo de Oñate, Española
Tuesday, Aug. 20, Duane W. Smith Auditorium, Los Alamos High School, Los Alamos
Thursday, Aug. 22, James A. Little Theater, New Mexico School for the Deaf, 1060 Cerrillos Road, Santa Fe.
Sponsored by the Fellows of Los Alamos National Laboratory, the Frontiers in Science lecture series is intended to increase local public awareness of the diversity of science and engineering research at the Laboratory.
"DEEP TIME" FUTURE PREDICTIONS
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| Time spiral: looking back through time to understand future climate change. Credit: NASA |
Back to the future: Scientists look into Earth's "Deep Time" to predict future effects of climate change
Climate change alters the way in which species interact with one another--a reality that applies not just to today or to the future, but also to the past, according to a paper published by a team of researchers in this week's issue of the journal Science.
"We found that, at all time scales, climate change can alter biotic interactions in very complex ways," said paleoecologist Jessica Blois of the University of California, Merced, the paper's lead author.
"If we don't incorporate this information when we're anticipating future changes, we're missing a big piece of the puzzle."
Blois asked for input from researchers who study "deep time," or the very distant past, as well as those who study the present, to help make predictions about what the future holds for life on Earth as climate shifts.
Co-authors of the paper are Phoebe Zarnetske of Yale University, Matthew Fitzpatrick of the University of Maryland, and Seth Finnegan of the University of California, Berkeley.
"Climate change and other human influences are altering Earth's living systems in big ways, such as changes in growing seasons and the spread of invasive species," said Alan Tessier, program director in the National Science Foundation's (NSF) Division of Environmental Biology, which co-funded the research with NSF's Division of Earth Sciences.
"This paper highlights the value of using information about past episodes of rapid change from Earth's history to help predict future changes to our planet's ecosystems."
Scientists are seeing responses in many species, Blois said, including plants that have never been found in certain climates--such as palms in Sweden--and animals like pikas moving to higher elevations as their habitats grow too warm.
"The worry is that the rate of current and future climate change is more than species can handle," Blois said.
The researchers are studying how species interactions may change between predators and prey, and between plants and pollinators, and how to translate data from the past and present into future models.
"One of the most compelling current questions science can ask is how ecosystems will respond to climate change," said Lisa Boush, program director in NSF's Division of Earth Sciences.
"These researchers address this using the fossil record and its rich history," said Boush. "They show that climate change has altered biological interactions in the past, driving extinction, evolution and the distribution of species.
"Their study allows us to better understand how modern-day climate change might influence the future of biological systems and the rate at which that change will occur."
While more research is needed, Blois said, changes can be observed today as well as in the past, although it's harder to gather information from incomplete fossil records.
Looking back, there were big changes at the end of major climate change periods, such as the end of the last Ice Age when large herbivores went extinct.
Without those mega-eaters to keep certain plants at bay, new communities of flora developed, most of which in turn are now gone.
"People used to think climate was the major driver of all these changes," Blois said, "but it's not just climate. It's also extinction of the megafauna, changes in the frequency of natural fires, and expansion of human populations. They're all linked."
People are comfortable with the way things have been, said Blois. "We've known where to plant crops, for example, and where to find water."
Now we need to know how to respond, she said, to changes that are already happening--and to those coming in the near future.
-NSF-
Friday, August 9, 2013
UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT FOR WEEKENDING JULY 27, 2013
FROM: U.S. DEPARTMENT OF LABOR
SEASONALLY ADJUSTED DATA
In the week ending August 3, the advance figure for seasonally adjusted initial claims was 333,000, an increase of 5,000 from the previous week's revised figure of 328,000. The 4-week moving average was 335,500, a decrease of 6,250 from the previous week's revised average of 341,750.
The advance seasonally adjusted insured unemployment rate was 2.3 percent for the week ending July 27, unchanged from the prior week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending July 27 was 3,018,000, an increase of 67,000 from the preceding week's unrevised level of 2,951,000. The 4-week moving average was 3,023,750, a decrease of 2,250 from the preceding week's unrevised average of 3,026,000.
UNADJUSTED DATA
The advance number of actual initial claims under state programs, unadjusted, totaled 286,738 in the week ending August 3, an increase of 5,285 from the previous week. There were 320,219 initial claims in the comparable week in 2012.
The advance unadjusted insured unemployment rate was 2.3 percent during the week ending July 27, unchanged from the prior week's unrevised rate. The advance unadjusted number for persons claiming UI benefits in state programs totaled 2,954,988, an increase of 27,804 from the preceding week's revised level of 2,927,184. A year earlier, the rate was 2.5 percent and the volume was 3,242,883.
The total number of people claiming benefits in all programs for the week ending July 20 was 4,520,948, a decrease of 174,418 from the previous week. There were 5,750,327 persons claiming benefits in all programs in the comparable week in 2012.
No state was triggered "on" the Extended Benefits program the week ending July 20.
Initial claims for UI benefits filed by former Federal civilian employees totaled 2,149 in the week ending July 27, a decrease of 130 from the prior week. There were 2,205 initial claims filed by newly discharged veterans, a decrease of 17 from the preceding week.
There were 20,596 former Federal civilian employees claiming UI benefits for the week ending July 20, an increase of 588 from the previous week. Newly discharged veterans claiming benefits totaled 34,312, a decrease of 698 from the prior week.
States reported 1,516,275 persons claiming Emergency Unemployment Compensation (EUC) benefits for the week ending July 20, a decrease of 48,242 from the prior week. There were 2,412,938 persons claiming EUC in the comparable week in 2012. EUC weekly claims include first, second, third, and fourth tier activity.
The highest insured unemployment rates in the week ending July 20 were in Puerto Rico (4.9), New Jersey (3.7), Alaska (3.5), Connecticut (3.4), Pennsylvania (3.3), New Mexico (3.1), California (3.0), Nevada (2.9), Illinois (2.8), New York (2.8), Rhode Island (2.8), and Virgin Islands (2.8).
The largest increases in initial claims for the week ending July 27 were in Idaho (+264), Wisconsin (+179), South Dakota (+115), Arkansas (+90), and Hawaii (+61), while the largest decreases were in California (-21,479), Michigan (-8,647), Missouri (-3,208), Georgia (-2,951), and Texas (-2,782).
SEASONALLY ADJUSTED DATA
In the week ending August 3, the advance figure for seasonally adjusted initial claims was 333,000, an increase of 5,000 from the previous week's revised figure of 328,000. The 4-week moving average was 335,500, a decrease of 6,250 from the previous week's revised average of 341,750.
The advance seasonally adjusted insured unemployment rate was 2.3 percent for the week ending July 27, unchanged from the prior week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending July 27 was 3,018,000, an increase of 67,000 from the preceding week's unrevised level of 2,951,000. The 4-week moving average was 3,023,750, a decrease of 2,250 from the preceding week's unrevised average of 3,026,000.
UNADJUSTED DATA
The advance number of actual initial claims under state programs, unadjusted, totaled 286,738 in the week ending August 3, an increase of 5,285 from the previous week. There were 320,219 initial claims in the comparable week in 2012.
The advance unadjusted insured unemployment rate was 2.3 percent during the week ending July 27, unchanged from the prior week's unrevised rate. The advance unadjusted number for persons claiming UI benefits in state programs totaled 2,954,988, an increase of 27,804 from the preceding week's revised level of 2,927,184. A year earlier, the rate was 2.5 percent and the volume was 3,242,883.
The total number of people claiming benefits in all programs for the week ending July 20 was 4,520,948, a decrease of 174,418 from the previous week. There were 5,750,327 persons claiming benefits in all programs in the comparable week in 2012.
No state was triggered "on" the Extended Benefits program the week ending July 20.
Initial claims for UI benefits filed by former Federal civilian employees totaled 2,149 in the week ending July 27, a decrease of 130 from the prior week. There were 2,205 initial claims filed by newly discharged veterans, a decrease of 17 from the preceding week.
There were 20,596 former Federal civilian employees claiming UI benefits for the week ending July 20, an increase of 588 from the previous week. Newly discharged veterans claiming benefits totaled 34,312, a decrease of 698 from the prior week.
States reported 1,516,275 persons claiming Emergency Unemployment Compensation (EUC) benefits for the week ending July 20, a decrease of 48,242 from the prior week. There were 2,412,938 persons claiming EUC in the comparable week in 2012. EUC weekly claims include first, second, third, and fourth tier activity.
The highest insured unemployment rates in the week ending July 20 were in Puerto Rico (4.9), New Jersey (3.7), Alaska (3.5), Connecticut (3.4), Pennsylvania (3.3), New Mexico (3.1), California (3.0), Nevada (2.9), Illinois (2.8), New York (2.8), Rhode Island (2.8), and Virgin Islands (2.8).
The largest increases in initial claims for the week ending July 27 were in Idaho (+264), Wisconsin (+179), South Dakota (+115), Arkansas (+90), and Hawaii (+61), while the largest decreases were in California (-21,479), Michigan (-8,647), Missouri (-3,208), Georgia (-2,951), and Texas (-2,782).
SECRETARY OF STATE KERRY'S REMARKS ON ANNIVERSARY OF THE EAST AFRICA EMBASSY BOMBINGS
FROM: U.S. STATE DEPARTMENT
Fifteenth Anniversary of East Africa Embassy Bombings
Press Statement
John Kerry
Secretary of State
Washington, DC
August 7, 2013
On the fifteenth anniversary of the U.S. Embassy bombings in Kenya and Tanzania, our thoughts and prayers are with the survivors and innocent victims of these cowardly attacks.
We honor the memory of the over 200 people who lost their lives, and we remember the nearly 5,000 who were injured.
The victims included American, Kenyan, and Tanzanian employees of our embassies.
Our continued presence in the region and our enduring friendship with the people of Kenya and Tanzania remind us that, despite the devastation and loss of life, the terrorists failed.
We are committed to bringing them all to justice.
Tragedies like these also remind us why embassy security and the safety of our personnel and visitors remain a priority for the U.S. Department of State.
Working closely with our African partners, we will continue to combat terrorism while we keep our doors open to all those of good will.
Fifteenth Anniversary of East Africa Embassy Bombings
Press Statement
John Kerry
Secretary of State
Washington, DC
August 7, 2013
On the fifteenth anniversary of the U.S. Embassy bombings in Kenya and Tanzania, our thoughts and prayers are with the survivors and innocent victims of these cowardly attacks.
We honor the memory of the over 200 people who lost their lives, and we remember the nearly 5,000 who were injured.
The victims included American, Kenyan, and Tanzanian employees of our embassies.
Our continued presence in the region and our enduring friendship with the people of Kenya and Tanzania remind us that, despite the devastation and loss of life, the terrorists failed.
We are committed to bringing them all to justice.
Tragedies like these also remind us why embassy security and the safety of our personnel and visitors remain a priority for the U.S. Department of State.
Working closely with our African partners, we will continue to combat terrorism while we keep our doors open to all those of good will.
3 MS-13 LEADERS FOUND GUILTY OF RACKETEERING AND MORE CHARGES RELATED TO MULTIPLE MURDERS
FROM: U.S. JUSTICE DEPARTMENT
Tuesday, August 6, 2013
Three MS-13 Leaders Found Guilty of Racketeering and Additional Charges for Multiple Murders and Attacks
Twelve Others Have Pleaded Guilty in the Case
Three leaders of MS-13 in Washington, D.C., were found guilty by a federal jury today of conspiring to participate in racketeering activity and other charges stemming from their roles in murders, extortion and other violent crimes in the Washington area.
The verdicts, which followed a month-long trial, were announced by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Ronald C. Machen Jr. of the District of Columbia; Special Agent in Charge John P. Torres of U.S. Immigration and Customs Enforcement (ICE) - Homeland Security Investigations (HSI) in Washington; and Cathy L. Lanier, Chief of the Washington, D.C., Metropolitan Police Department (MPD).
“Today, a jury has found three defendants guilty of committing heinous crimes as part of their membership in a brutal international criminal organization that has terrorized communities throughout the United States and Central America,” said Acting Assistant Attorney General Raman. “As a result of this successful investigation and prosecution, these violent gang members now face substantial prison sentences.”
“After a month-long trial, this jury delivered the message that MS-13 and its brutal brand of violence will not be tolerated in the District of Columbia,” said U.S. Attorney Machen. “These three killers now face life in prison for their outrageous crimes, including the stabbing death of a 14-year-old boy in Columbia Heights. I want to thank the prosecutors and our law enforcement partners who have dedicated years to investigating and prosecuting this transnational gang. The District is safer with these murderers behind bars.”
“This verdict represents the consequences for the decisions made and the lifestyle choices of the three convicted gang members,” said Special Agent in Charge Torres. “Investigating violent crimes committed by trans-national gang members is a priority for HSI.”
“The convictions of these three violent gang leaders should send a clear message to the members of this ruthless, international criminal organization that gang activity will not be tolerated in our communities,” said Police Chief Lanier. “I applaud the hard work and dedication by the members of the Metropolitan Police Department and our law enforcement partners who helped make today’s convictions possible. Our communities will be safer as a result.”
Yester Ayala, 22, aka “Freeway” and “Daddy Yankee,” of Washington; Noe Machado-Erazo, aka “Gallo,” 30, of Wheaton, Md.; and Jose Martinez-Amaya, 26, aka “Crimen,” of Brentwood, Md., were each found guilty in U.S. District Court in the District of Columbia. At sentencing, scheduled for Nov. 4, 2013, each of the defendants faces a maximum sentence of life in prison.
Ayala was found guilty of one count of conspiracy to participate in racketeering activity, two counts of murder in aid of racketeering, one count of first-degree premeditated murder and one count of second-degree murder. Machado-Erazo was found guilty of conspiracy to participate in racketeering activity, murder in aid of racketeering and possession of a firearm during a crime of violence. Martinez-Amaya was found guilty of conspiracy to participate in racketeering activity, murder in aid of racketeering and possession of a firearm during a crime of violence.
The government’s evidence showed that MS-13, a large gang that operates in the United States and Central America, engages in racketeering activity including murder, narcotics distribution, extortion, robberies, obstruction of justice and other crimes. The gang has numerous rules, such as enduring a beating of 13 seconds before becoming a member; killing rival gang members; and staying unfailingly loyal.
According to the government’s evidence, Machado-Erazo was a member and Martinez-Amaya was a leader of the Normandie clique, one of a number of smaller MS-13 groups operating in the Washington area. Ayala was a leader of the Sailors, another clique. The local cliques often act together, and evidence showed that Machado-Erazo was the leader of a program of cliques that worked together. According to evidence presented in court, the local MS-13 cliques act in accordance with the international MS-13’s strictures and have frequent contact with MS-13 leadership in El Salvador. The evidence showed that two of the murders were committed on orders from MS-13 leadership in El Salvador.
The three defendants are among numerous people indicted by a grand jury in 2010 following a federal investigation. Twelve others have pleaded guilty to charges in the case.
The range of criminal activity alleged in the indictment includes acts committed from 2008 through 2010 in the District of Columbia, Maryland, Virginia and other states.
Ayala was convicted of taking part in two murders in 2008, and Machado-Erazo and Martinez-Amaya were convicted of taking part in the murder of another victim.
The government presented evidence that Ayala helped carry out orders to murder Louis Alberto Membreno-Zelaya, a fellow MS-13 member who had removed his gang tattoos. Membreno-Zelaya, 27, was stabbed at least 20 times, according to evidence presented in court. His body was found on Nov. 6, 2008, in Northwest Washington.
The second murder, according to evidence presented in court, took place in the late afternoon of Dec. 12, 2008. Ayala joined in on an attack against Giovanni Sanchez, 14, near the Columbia Heights Metro station in Washington. Giovanni had 11 stab wounds, and witnesses identified Ayala as one of the assailants.
According to evidence presented at trial, Machado-Erazo and Martinez-Amaya took part in the killing of Felipe Enriquez, 25, whose body was found on March 31, 2010, in Montgomery County, Md. Enriquez, another fellow MS-13 member, was fatally shot. Evidence presented during trial showed that Machado-Erazao provided the gun and Martinez-Amaya committed the shooting.
This case was prosecuted by Assistant U.S. Attorney Nihar Mohanty of the District of Columbia and Trial Attorney Laura Gwinn of the Criminal Division’s Organized Crime and Gang Section.
The case was investigated by ICE-HSI and the MPD. Assistance was provided by the Montgomery County and the Prince George’s County, Md. Police Departments, the State’s Attorney’s Office for Montgomery County, the U.S. Attorney’s Office for the District of Maryland and the U.S. Attorney’s Office for the Eastern District of Virginia. Assistance was provided by the Organized Crime Drug Enforcement Task Force (OCDETF).
Tuesday, August 6, 2013
Three MS-13 Leaders Found Guilty of Racketeering and Additional Charges for Multiple Murders and Attacks
Twelve Others Have Pleaded Guilty in the Case
Three leaders of MS-13 in Washington, D.C., were found guilty by a federal jury today of conspiring to participate in racketeering activity and other charges stemming from their roles in murders, extortion and other violent crimes in the Washington area.
The verdicts, which followed a month-long trial, were announced by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Ronald C. Machen Jr. of the District of Columbia; Special Agent in Charge John P. Torres of U.S. Immigration and Customs Enforcement (ICE) - Homeland Security Investigations (HSI) in Washington; and Cathy L. Lanier, Chief of the Washington, D.C., Metropolitan Police Department (MPD).
“Today, a jury has found three defendants guilty of committing heinous crimes as part of their membership in a brutal international criminal organization that has terrorized communities throughout the United States and Central America,” said Acting Assistant Attorney General Raman. “As a result of this successful investigation and prosecution, these violent gang members now face substantial prison sentences.”
“After a month-long trial, this jury delivered the message that MS-13 and its brutal brand of violence will not be tolerated in the District of Columbia,” said U.S. Attorney Machen. “These three killers now face life in prison for their outrageous crimes, including the stabbing death of a 14-year-old boy in Columbia Heights. I want to thank the prosecutors and our law enforcement partners who have dedicated years to investigating and prosecuting this transnational gang. The District is safer with these murderers behind bars.”
“This verdict represents the consequences for the decisions made and the lifestyle choices of the three convicted gang members,” said Special Agent in Charge Torres. “Investigating violent crimes committed by trans-national gang members is a priority for HSI.”
“The convictions of these three violent gang leaders should send a clear message to the members of this ruthless, international criminal organization that gang activity will not be tolerated in our communities,” said Police Chief Lanier. “I applaud the hard work and dedication by the members of the Metropolitan Police Department and our law enforcement partners who helped make today’s convictions possible. Our communities will be safer as a result.”
Yester Ayala, 22, aka “Freeway” and “Daddy Yankee,” of Washington; Noe Machado-Erazo, aka “Gallo,” 30, of Wheaton, Md.; and Jose Martinez-Amaya, 26, aka “Crimen,” of Brentwood, Md., were each found guilty in U.S. District Court in the District of Columbia. At sentencing, scheduled for Nov. 4, 2013, each of the defendants faces a maximum sentence of life in prison.
Ayala was found guilty of one count of conspiracy to participate in racketeering activity, two counts of murder in aid of racketeering, one count of first-degree premeditated murder and one count of second-degree murder. Machado-Erazo was found guilty of conspiracy to participate in racketeering activity, murder in aid of racketeering and possession of a firearm during a crime of violence. Martinez-Amaya was found guilty of conspiracy to participate in racketeering activity, murder in aid of racketeering and possession of a firearm during a crime of violence.
The government’s evidence showed that MS-13, a large gang that operates in the United States and Central America, engages in racketeering activity including murder, narcotics distribution, extortion, robberies, obstruction of justice and other crimes. The gang has numerous rules, such as enduring a beating of 13 seconds before becoming a member; killing rival gang members; and staying unfailingly loyal.
According to the government’s evidence, Machado-Erazo was a member and Martinez-Amaya was a leader of the Normandie clique, one of a number of smaller MS-13 groups operating in the Washington area. Ayala was a leader of the Sailors, another clique. The local cliques often act together, and evidence showed that Machado-Erazo was the leader of a program of cliques that worked together. According to evidence presented in court, the local MS-13 cliques act in accordance with the international MS-13’s strictures and have frequent contact with MS-13 leadership in El Salvador. The evidence showed that two of the murders were committed on orders from MS-13 leadership in El Salvador.
The three defendants are among numerous people indicted by a grand jury in 2010 following a federal investigation. Twelve others have pleaded guilty to charges in the case.
The range of criminal activity alleged in the indictment includes acts committed from 2008 through 2010 in the District of Columbia, Maryland, Virginia and other states.
Ayala was convicted of taking part in two murders in 2008, and Machado-Erazo and Martinez-Amaya were convicted of taking part in the murder of another victim.
The government presented evidence that Ayala helped carry out orders to murder Louis Alberto Membreno-Zelaya, a fellow MS-13 member who had removed his gang tattoos. Membreno-Zelaya, 27, was stabbed at least 20 times, according to evidence presented in court. His body was found on Nov. 6, 2008, in Northwest Washington.
The second murder, according to evidence presented in court, took place in the late afternoon of Dec. 12, 2008. Ayala joined in on an attack against Giovanni Sanchez, 14, near the Columbia Heights Metro station in Washington. Giovanni had 11 stab wounds, and witnesses identified Ayala as one of the assailants.
According to evidence presented at trial, Machado-Erazo and Martinez-Amaya took part in the killing of Felipe Enriquez, 25, whose body was found on March 31, 2010, in Montgomery County, Md. Enriquez, another fellow MS-13 member, was fatally shot. Evidence presented during trial showed that Machado-Erazao provided the gun and Martinez-Amaya committed the shooting.
This case was prosecuted by Assistant U.S. Attorney Nihar Mohanty of the District of Columbia and Trial Attorney Laura Gwinn of the Criminal Division’s Organized Crime and Gang Section.
The case was investigated by ICE-HSI and the MPD. Assistance was provided by the Montgomery County and the Prince George’s County, Md. Police Departments, the State’s Attorney’s Office for Montgomery County, the U.S. Attorney’s Office for the District of Maryland and the U.S. Attorney’s Office for the Eastern District of Virginia. Assistance was provided by the Organized Crime Drug Enforcement Task Force (OCDETF).
COURT ORDERS TRADER TO PAY OVER $7.5 MILLION FOR ROLE IN COMMODITY FUTURES FRAUD
FROM: COMMODITY FUTURES TRADING COMMISSION
Federal Court in Illinois Orders Chicago-Based Trader Bradley Scott Schiller to Pay more than $7.5 Million in Restitution and a Civil Monetary Penalty for a Multi-Million Dollar Commodity Futures Fraud
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge Thomas M. Durkin of the U.S. District Court for the Northern District of Illinois entered a Consent Order for Permanent Injunction (Order) requiring defendant Bradley Scott Schiller, of Chicago, Illinois, to pay restitution of approximately $4.565 million and a civil monetary penalty of $3 million for commodity futures fraud. The Order also imposes permanent trading and registration bans, among other sanctions.
The Order stems from a CFTC Enforcement complaint filed on May 24, 2012 (see CFTC Press Release 6262-12). The Order finds that from at least January 2008 through approximately May 2012, Schiller fraudulently solicited approximately $7.8 million from at least six investors for trading futures, and that Schiller misappropriated investors’ funds and issued false account statements to customers in order to perpetuate his fraud. According to the Order, Schiller, a former floor broker, told prospective investors that he was a successful trader and showed prospective investors altered account statements to bolster his claims when he was soliciting funds. However, according to the Order, Schiller opened no accounts in the name of his investors, misappropriated approximately $3 million to pay for personal expenses and to re-pay earlier investors and lost approximately $1.6 million in trading in an account in his own name.
The CFTC appreciates the assistance of the U.S. Attorney’s Office, Northern District of Illinois, and the Federal Bureau of Investigation, Chicago Division.
The CFTC Division of Enforcement staff members responsible for this case are Jennifer Diamond, Judith McCorkle, Joseph Konizeski, Scott Williamson, Rosemary Hollinger and Richard B. Wagner.
Last Updated: August 6, 2013
Federal Court in Illinois Orders Chicago-Based Trader Bradley Scott Schiller to Pay more than $7.5 Million in Restitution and a Civil Monetary Penalty for a Multi-Million Dollar Commodity Futures Fraud
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge Thomas M. Durkin of the U.S. District Court for the Northern District of Illinois entered a Consent Order for Permanent Injunction (Order) requiring defendant Bradley Scott Schiller, of Chicago, Illinois, to pay restitution of approximately $4.565 million and a civil monetary penalty of $3 million for commodity futures fraud. The Order also imposes permanent trading and registration bans, among other sanctions.
The Order stems from a CFTC Enforcement complaint filed on May 24, 2012 (see CFTC Press Release 6262-12). The Order finds that from at least January 2008 through approximately May 2012, Schiller fraudulently solicited approximately $7.8 million from at least six investors for trading futures, and that Schiller misappropriated investors’ funds and issued false account statements to customers in order to perpetuate his fraud. According to the Order, Schiller, a former floor broker, told prospective investors that he was a successful trader and showed prospective investors altered account statements to bolster his claims when he was soliciting funds. However, according to the Order, Schiller opened no accounts in the name of his investors, misappropriated approximately $3 million to pay for personal expenses and to re-pay earlier investors and lost approximately $1.6 million in trading in an account in his own name.
The CFTC appreciates the assistance of the U.S. Attorney’s Office, Northern District of Illinois, and the Federal Bureau of Investigation, Chicago Division.
The CFTC Division of Enforcement staff members responsible for this case are Jennifer Diamond, Judith McCorkle, Joseph Konizeski, Scott Williamson, Rosemary Hollinger and Richard B. Wagner.
Last Updated: August 6, 2013
SECRETARY OF STATE KERRY'S PRESS STATEMENT ON SAUDI ARABIA AND THE UN CENTRE ON COUNTERTERRORISM
FROM: U.S. STATE DEPARTMENT
Saudi Arabia's Contribution to the UN Centre on Counterterrorism
Press Statement
John Kerry
Secretary of State
Washington, DC
August 8, 2013
We welcome and applaud today’s $100 million donation by His Majesty King Abdullah, on behalf of the Kingdom of Saudi Arabia, to the UN Centre on Counterterrorism (UNCCT).
His Majesty’s generous donation, on the occasion of Eid al Fitr, demonstrates once again the Kingdom’s commitment to supporting multilateral institutions and strengthening international cooperation on counterterrorism.
With these funds, we hope that the UN Counterterrorism Implementation Task Force (UNCTITF), of which the Centre is a critical component, can intensify its work to provide countries with the long-term capacity building support they need to implement the UN Global Counterterrorism Strategy.
Saudi Arabia's Contribution to the UN Centre on Counterterrorism
Press Statement
John Kerry
Secretary of State
Washington, DC
August 8, 2013
We welcome and applaud today’s $100 million donation by His Majesty King Abdullah, on behalf of the Kingdom of Saudi Arabia, to the UN Centre on Counterterrorism (UNCCT).
His Majesty’s generous donation, on the occasion of Eid al Fitr, demonstrates once again the Kingdom’s commitment to supporting multilateral institutions and strengthening international cooperation on counterterrorism.
With these funds, we hope that the UN Counterterrorism Implementation Task Force (UNCTITF), of which the Centre is a critical component, can intensify its work to provide countries with the long-term capacity building support they need to implement the UN Global Counterterrorism Strategy.
WHERE DISEASES AND CLIMATE CHANGE INTERSECT
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| Rat Eating Seeds. Credit: Wikimedia. |
Infectious diseases and climate change intersect with no simple answers
Climate change is already affecting the spread of infectious diseases--and human health and biodiversity worldwide--according to disease ecologists reporting research results in this week's issue of the journal Science.
Modeling disease outcomes from host and parasite responses to climate variables, they say, could help public health officials and environmental managers address the challenges posed by the changing landscape of infectious disease.
"Earth's changing climate and the global spread of infectious diseases are threatening human health, agriculture and wildlife," said Sam Scheiner, National Science Foundation (NSF) program director for the joint NSF-National Institutes of Health Ecology and Evolution of Infectious Diseases Program, which funded the research.
"Solving these problems requires a comprehensive approach that unites scientists from biology, the geosciences and the social sciences."
According to lead author Sonia Altizer of the University of Georgia, the issue of climate change and disease has provoked intense debate over the last decade, particularly in the case of diseases that affect humans.
In the Science paper, Altizer and her colleagues--Richard Ostfeld of the Cary Institute of Ecosystem Studies; Pieter Johnson of the University of Colorado; Susan Kutz of the University of Calgary and Canadian Cooperative Wildlife Health Centre; and Drew Harvell of Cornell University--laid out an agenda for future research and action.
"For a lot of human diseases, responses to climate change depend on the wealth of nations, healthcare infrastructure, and the ability to take mitigating measures," Altizer said.
"The climate signal, in many cases, is hard to tease apart from other factors like vector control, and vaccine and drug availability."
In diseases affecting wildlife and agricultural ecosystems, however, findings show that climate warming is already causing changes.
"In many cases, we're seeing an increase in disease and parasitism," Altizer said. "But the effect of climate change on these disease relationships depends on the physiology of the organisms and on the structure of natural communities."
At the organism level, climate change can alter the physiology of parasites. Some of the clearest examples are found in the Arctic, where temperatures are rising rapidly. Parasites are developing faster as a result. A lungworm that affects muskoxen, for instance, may be transmitted over a longer period each summer, making it a more serious problem for the populations it infects.
Climate change is also affecting entire plant and animal communities.
Community-level responses to rising temperatures are evident in tropical marine environments such as the coral reef ecosystems of the Caribbean. Warmer water temperatures have directly stressed corals and facilitated infections by pathogenic fungi and bacteria. When corals succumb, other species that depend on them are affected.
The potential consequences of these changes are serious. The combination of warmer temperatures and altered disease patterns is placing growing numbers of species at risk of extinction, the scientists say.
In human health, there is a direct risk from pathogens like dengue, malaria and cholera. All are linked to warmer temperatures.
Indirect risks also exist in threats to agricultural systems and game species that are crucial for subsistence and cultural activities.
The scientists recommend building on and expanding data on the physiological responses of hosts and parasites to temperature change. Those mechanisms may offer clues to how a system will respond to climate warming.
"We'd like to be able to predict, for example, that if the climate warms by a certain amount, then in a particular host-parasite system we might see an increase from one to two disease transmission cycles each year," Altizer said.
"But we'd also like to try to tie these predictions to actions that might be taken."
Some of those actions might involve more monitoring and surveillance, adjusting the timing of vector control measures and adopting new management measures.
These could include, for instance, closing coral reefs to human activity if a disease outbreak is predicted, or changing the planting strategy for crops to compensate for unusually high risks of certain diseases.
The researchers also point out that certain local human communities, such as those of indigenous peoples in the Arctic, could be disproportionately affected by climate-disease interactions.
Predicting where these local-scale effects might be most intense would allow societies to take measures to address issues such as health and food security.
"Involving local communities in disease surveillance," said Altizer, "could become essential."
Thursday, August 8, 2013
DOCTOR AND OWNER OF MICHIGAN ONCOLOGY CENTERS CHARGED IN $35 MILLION MEDICARE FRAUD SCHEME
FROM: U.S. DEPARTMENT OF JUSTICE
Tuesday, August 6, 2013
Oakland County Doctor and Owner of Michigan Hematology and Oncology Centers Charged in $35 Million Medicare Fraud Scheme
Dr. Farid Fata, 48, of Oakland Township, Michigan, was arrested this morning and charged in a criminal complaint for his role in a health care fraud scheme which involved submitting false claims to Medicare for services that were medically unnecessary, including chemotherapy treatments.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, FBI Special Agent in Charge Robert D. Foley III and Special Agent in Charge Lamont Pugh of the Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.
“Dr. Fata allegedly perpetrated a brazen and dangerous fraud that time and again jeopardized his patients’ wellbeing,” said Acting Assistant Attorney General Raman. “The conduct alleged today is chilling, with the defendant endangering patient safety through misdiagnoses, over- or mis-prescription of chemotherapy and other treatments, and delay of hospital care for patients with serious injuries. Through the work of our dedicated prosecutors and agents, today we have taken swift action to safeguard patient safety and hold the defendant to account.”
“Our first priority is patient care,” said U.S. Attorney McQuade. “The agents and attorneys acted with great attention to detail to stop these allegedly dangerous practices as quickly as possible, and we have set up a victim hotline so that patients can access their files and get questions answered.”
“Violating a patient's trust and placing them at risk through fraudulent abuse of our nation's health care system is deplorable and a crime which the FBI takes most seriously,” said FBI Special Agent in Charge Foley. “The FBI remains committed to the arrest and prosecution of those who commit health care fraud.”
“The conduct alleged in this complaint is serious, not only in terms of potential Medicare dollars improperly obtained, but patient safety as well,” said HHS-OIG Special Agent in Charge Pugh. “The OIG will aggressively investigate allegations of this nature in order to ensure the safety of Medicare patients and to protect vital taxpayer dollars.”
According to the complaint, Dr. Fata owns and operates Michigan Hematology Oncology Centers (MHO), which has offices in Clarkston, Bloomfield Hills, Lapeer, Sterling Heights, Troy and Oak Park. It was through MHO that Dr. Fata allegedly submitted fraudulent claims to Medicare for medically unnecessary services, including chemotherapy treatments, Positron Emission Tomograph (PET) scans and a variety of cancer and hematology treatments for patients who did not need them. In the course of the scheme, Dr. Fata falsified and directed others to falsify documents to justify cancer treatments for billing purposes. MHO billed Medicare for approximately $35 million dollars over a two-year period, approximately $25 million of which is attributable to Dr. Fata.
The complaint further alleges that Dr. Fata directed the administration of unnecessary chemotherapy to patients in remission; deliberate misdiagnoses of patients as having cancer to justify unnecessary cancer treatment; administration of chemotherapy to end-of-life patients who would not have benefitted from the treatment; deliberate misdiagnoses of patients without cancer to justify expensive testing; fabrication of other diagnoses such as anemia and fatigue to justify unnecessary hematology treatments, and distribution of controlled substances to patients without medical necessity or through administering the drugs at dangerous levels.
Dr. Fata will be making his initial appearance in federal court this afternoon at 1 p.m. in Detroit.
Patients who have questions concerning their medical records and/or information regarding this investigation and prosecution can call the United States Attorney’s Office Information Line at 888-702-0553.
The case is being prosecuted by Assistant Chief Catherine Dick, supervisor of the Detroit Medicare Fraud Strike Force and Trial Attorney Matthew Thuesen of the Department of Justice as well as Sarah Resnick Cohen, Deputy Chief of the Health Care Fraud Unit at the U.S. Attorney’s Office, and Justin Bidwell, Special Assistant United States Attorney. The investigations were conducted jointly by the FBI and HHS-OIG, along with the assistance of the Michigan Attorney General’s Office.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
Tuesday, August 6, 2013
Oakland County Doctor and Owner of Michigan Hematology and Oncology Centers Charged in $35 Million Medicare Fraud Scheme
Dr. Farid Fata, 48, of Oakland Township, Michigan, was arrested this morning and charged in a criminal complaint for his role in a health care fraud scheme which involved submitting false claims to Medicare for services that were medically unnecessary, including chemotherapy treatments.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, FBI Special Agent in Charge Robert D. Foley III and Special Agent in Charge Lamont Pugh of the Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.
“Dr. Fata allegedly perpetrated a brazen and dangerous fraud that time and again jeopardized his patients’ wellbeing,” said Acting Assistant Attorney General Raman. “The conduct alleged today is chilling, with the defendant endangering patient safety through misdiagnoses, over- or mis-prescription of chemotherapy and other treatments, and delay of hospital care for patients with serious injuries. Through the work of our dedicated prosecutors and agents, today we have taken swift action to safeguard patient safety and hold the defendant to account.”
“Our first priority is patient care,” said U.S. Attorney McQuade. “The agents and attorneys acted with great attention to detail to stop these allegedly dangerous practices as quickly as possible, and we have set up a victim hotline so that patients can access their files and get questions answered.”
“Violating a patient's trust and placing them at risk through fraudulent abuse of our nation's health care system is deplorable and a crime which the FBI takes most seriously,” said FBI Special Agent in Charge Foley. “The FBI remains committed to the arrest and prosecution of those who commit health care fraud.”
“The conduct alleged in this complaint is serious, not only in terms of potential Medicare dollars improperly obtained, but patient safety as well,” said HHS-OIG Special Agent in Charge Pugh. “The OIG will aggressively investigate allegations of this nature in order to ensure the safety of Medicare patients and to protect vital taxpayer dollars.”
According to the complaint, Dr. Fata owns and operates Michigan Hematology Oncology Centers (MHO), which has offices in Clarkston, Bloomfield Hills, Lapeer, Sterling Heights, Troy and Oak Park. It was through MHO that Dr. Fata allegedly submitted fraudulent claims to Medicare for medically unnecessary services, including chemotherapy treatments, Positron Emission Tomograph (PET) scans and a variety of cancer and hematology treatments for patients who did not need them. In the course of the scheme, Dr. Fata falsified and directed others to falsify documents to justify cancer treatments for billing purposes. MHO billed Medicare for approximately $35 million dollars over a two-year period, approximately $25 million of which is attributable to Dr. Fata.
The complaint further alleges that Dr. Fata directed the administration of unnecessary chemotherapy to patients in remission; deliberate misdiagnoses of patients as having cancer to justify unnecessary cancer treatment; administration of chemotherapy to end-of-life patients who would not have benefitted from the treatment; deliberate misdiagnoses of patients without cancer to justify expensive testing; fabrication of other diagnoses such as anemia and fatigue to justify unnecessary hematology treatments, and distribution of controlled substances to patients without medical necessity or through administering the drugs at dangerous levels.
Dr. Fata will be making his initial appearance in federal court this afternoon at 1 p.m. in Detroit.
Patients who have questions concerning their medical records and/or information regarding this investigation and prosecution can call the United States Attorney’s Office Information Line at 888-702-0553.
The case is being prosecuted by Assistant Chief Catherine Dick, supervisor of the Detroit Medicare Fraud Strike Force and Trial Attorney Matthew Thuesen of the Department of Justice as well as Sarah Resnick Cohen, Deputy Chief of the Health Care Fraud Unit at the U.S. Attorney’s Office, and Justin Bidwell, Special Assistant United States Attorney. The investigations were conducted jointly by the FBI and HHS-OIG, along with the assistance of the Michigan Attorney General’s Office.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
LANL ANNOUNCES EXPRESS LICENSING PROGRAM FOR NEW TECHNOLOGY
FROM: LOS ALAMOS NATIONAL LABORATORY
Los Alamos National Laboratory announces Express Licensing program
Streamlined procedure speeds business access to new technology
LOS ALAMOS, N.M., August 1, 2013—With the launch of a new “Express Licensing” program, access to innovative technology invented at Los Alamos National Laboratory (LANL) has gotten easier. The new licensing alternative was announced today by David Pesiri, director of LANL’s Technology Transfer Division.
“The Express License program offers an additional licensing resource for local entrepreneurs as well as national collaborators,” Pesiri said. “Our licensing and software teams have worked very hard to offer this specialized model for those wanting to quickly license Los Alamos technology.”
The Express Licensing program at LANL is the first of several new initiatives under development by the Technology Transfer Division (TT) at Los Alamos that should streamline access to LANL innovations by potential partners and customers.
“The primary goal of our first new commercialization initiative, the Express Licensing program, is to provide easy access to Los Alamos technologies and expedite the licensing process,” said Laura Barber, licensing manager at LANL. “This program will provide an accelerated, streamlined process for non-exclusive licensing of patents and software at LANL, with favorable, pre-established terms that eliminate time-consuming negotiations. Many of the software packages are freely available as either executable downloads or open-source software and may be accessed online with the click of a mouse.”
“By making access to LANL technologies faster, easier and more valuable to our partners, this initiative moves us closer to our broader goal of getting Los Alamos innovations into the hands of the experts in the marketplace and elsewhere who can make an impact,” Pesiri said.
Los Alamos National Laboratory announces Express Licensing program
Streamlined procedure speeds business access to new technology
LOS ALAMOS, N.M., August 1, 2013—With the launch of a new “Express Licensing” program, access to innovative technology invented at Los Alamos National Laboratory (LANL) has gotten easier. The new licensing alternative was announced today by David Pesiri, director of LANL’s Technology Transfer Division.
“The Express License program offers an additional licensing resource for local entrepreneurs as well as national collaborators,” Pesiri said. “Our licensing and software teams have worked very hard to offer this specialized model for those wanting to quickly license Los Alamos technology.”
The Express Licensing program at LANL is the first of several new initiatives under development by the Technology Transfer Division (TT) at Los Alamos that should streamline access to LANL innovations by potential partners and customers.
“The primary goal of our first new commercialization initiative, the Express Licensing program, is to provide easy access to Los Alamos technologies and expedite the licensing process,” said Laura Barber, licensing manager at LANL. “This program will provide an accelerated, streamlined process for non-exclusive licensing of patents and software at LANL, with favorable, pre-established terms that eliminate time-consuming negotiations. Many of the software packages are freely available as either executable downloads or open-source software and may be accessed online with the click of a mouse.”
“By making access to LANL technologies faster, easier and more valuable to our partners, this initiative moves us closer to our broader goal of getting Los Alamos innovations into the hands of the experts in the marketplace and elsewhere who can make an impact,” Pesiri said.
FDA WORKS TO UNDERSTAND THE SAFETY OF ANESTHESIA FOR INFANTS AND YOUNG CHILDREN
FROM: U.S. FOOD AND DRUG ADMINISTRATION
When infants or young children need surgery, does anesthesia affect their developing brains?
With more than 1 million children under age 4 requiring anesthesia for surgery in the United States each year, the Food and Drug Administration (FDA) and other health organizations are working together to answer this question.
Previous scientific studies in young animals have shown that commonly used anesthetics can be harmful to the developing brain. However, results have been mixed in children. Some studies of infants and young children undergoing anesthesia have reported long-term deficits in learning and behavior; other studies have not.
These conflicting results show that more research is needed to fully understand the risks anesthesia may pose to very young patients.
To close these research gaps, FDA and the International Anesthesia Research Society (IARS) started an initiative called SmartTots (Strategies for Mitigating Anesthesia-Related neuroToxicity in Tots). SmartTots seeks to ensure that children under age 4 will be as safe as possible when they need anesthesia during surgery. Studies have shown that this is a period of significant brain development in young children.
"Our hope is that research funded through SmartTots will help us design the safest anesthetic regimens possible," says Bob Rappaport, M.D., director of the Division of Anesthesia, Analgesia and Addiction Products at FDA. "This research can potentially foster the development of new and safer anesthetic drugs for use in pediatric medicine."
According to SmartTots steering committee co-chair James Ramsay, M.D., young children usually do not undergo surgery unless the procedure is vital to their health. "Therefore, postponing a necessary procedure may itself lead to significant health problems and may not be an option for the majority of children," Ramsey says.
When infants or young children need surgery, does anesthesia affect their developing brains?
With more than 1 million children under age 4 requiring anesthesia for surgery in the United States each year, the Food and Drug Administration (FDA) and other health organizations are working together to answer this question.
Previous scientific studies in young animals have shown that commonly used anesthetics can be harmful to the developing brain. However, results have been mixed in children. Some studies of infants and young children undergoing anesthesia have reported long-term deficits in learning and behavior; other studies have not.
These conflicting results show that more research is needed to fully understand the risks anesthesia may pose to very young patients.
To close these research gaps, FDA and the International Anesthesia Research Society (IARS) started an initiative called SmartTots (Strategies for Mitigating Anesthesia-Related neuroToxicity in Tots). SmartTots seeks to ensure that children under age 4 will be as safe as possible when they need anesthesia during surgery. Studies have shown that this is a period of significant brain development in young children.
"Our hope is that research funded through SmartTots will help us design the safest anesthetic regimens possible," says Bob Rappaport, M.D., director of the Division of Anesthesia, Analgesia and Addiction Products at FDA. "This research can potentially foster the development of new and safer anesthetic drugs for use in pediatric medicine."
According to SmartTots steering committee co-chair James Ramsay, M.D., young children usually do not undergo surgery unless the procedure is vital to their health. "Therefore, postponing a necessary procedure may itself lead to significant health problems and may not be an option for the majority of children," Ramsey says.
FORMER FUGITIVE SENTENCED FOR ROLE IN FORECLOSURE SCAM
FROM: U.S. DEPARTMENT OF JUSTICE
Monday, August 5, 2013
Former Federal Fugitive Sentenced in California for Nationwide Foreclosure Scam
Collected More Than $1.2 Million from More Than 800 Distressed Homeowners
Glen Alan Ward, 48, a former Los Angeles resident who fled to Canada and was a federal fugitive for 12 years, was sentenced today to serve 132 months in prison for aggravated identity theft and bankruptcy fraud in connection with his leading role in a nearly 15-year foreclosure-rescue scam that fraudulently postponed foreclosure sales for more than 800 distressed homeowners.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney André Birotte Jr. of the Central District of California, U.S. Attorney for the Northern District of California Melinda Haag, Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office, Special Agent in Charge David J. Johnson of the FBI’s San Francisco Field Office and Special Inspector General for the Troubled Asset Relief Program Christy Romero made the announcement.
Ward was sentenced by U.S. District Judge Dale S. Fischer in the Central District of California. In addition to his prison term, Ward was sentenced to serve three years of supervised release and ordered to pay approximately $60,000 in restitution.
Ward pleaded guilty on April 8, 2013, in connection with three separate sets of charges in the Central and Northern Districts of California, all stemming from Ward’s 15-year fraud. In 2000, Ward became a federal fugitive when he failed to appear in court after signing a plea agreement, which arose out of federal charges in 2000 in the Central District of California related to Ward’s early conduct in the scheme. In 2002, Ward was indicted on multiple counts of bankruptcy fraud in the Northern District of California for continuing the scheme in and around San Francisco. On Aug. 17, 2012, Ward was indicted on mail fraud, aggravated identity theft, and additional bankruptcy fraud counts in the Central District of California after fleeing to Canada and continuing his fraud from there. While in Canada, Ward recruited Frederic Alan Gladle, who was indicted in the Central District of California for bankruptcy fraud and identity theft in 2011, and was sentenced in 2012 on his guilty plea to 61 months in custody for engaging in similar conduct.
On April 5, 2012, Ward was arrested in Canada by the Royal Canadian Mounted Police and the Waterloo Regional Police Service based on a U.S. provisional arrest warrant. On Dec. 21, 2012, Ward was extradited to the United States to answer all three sets of charges.
According to the plea agreement, Ward led a scheme that solicited and recruited homeowners whose properties were in danger of imminent foreclosure. Ward promised to delay their foreclosures for as long as the homeowners could afford his $700 monthly fee. Once a homeowner paid the fee, Ward accessed a public bankruptcy database and retrieved the name of an individual debtor who recently filed bankruptcy. Ward admitted that he obtained copies of unsuspecting debtors’ bankruptcy petitions and directed his clients to execute, notarize and record a grant deed transferring generally a 1/100th fractional interest in their distressed home into the name of the debtor that Ward provided. Then, after stealing the debtor’s identity, Ward faxed a copy of the bankruptcy petition, the notarized grant deed and a cover letter to the homeowner’s lender or the lender’s representative, directing it to stop the impending foreclosure sale due to the bankruptcy.
Because bankruptcy filings give rise to automatic stays that protect debtors’ properties, the receipt of the bankruptcy petitions and deeds in the debtors’ names forced lenders to cancel foreclosure sales. The lenders, which included banks that received government funds under the Troubled Asset Relief Program (TARP), could not move forward to collect money that was owed to them until getting permission from the bankruptcy courts, thereby repeatedly delaying the lenders’ recovery of their money for months and even years. In addition, if a distressed homeowner wanted to complete a loan modification or short sale, they were left to the mercy of Ward to send them forged deeds, supposedly signed by the debtors, to re-unify their title as required by most lenders.
As part of the scheme, Ward delayed the foreclosure sales of approximately 824 distressed properties by using at least 414 bankruptcies filed in 26 judicial districts across the country. During that same period, Ward admitted to collecting from his clients who paid for his illegal foreclosure-delay services more than $1.2 million.
The investigation was conducted by the Office of the Special Inspector General for the Troubled Asset Relief Program and the FBI, which received substantial assistance from the U.S. Trustee’s Office. In addition, the Office of International Affairs of the Department of Justice, Canadian Waterloo Regional Police Service and Royal Canadian Mounted Police provided exceptional support and assistance in connection with Ward’s arrest and extradition.
This case was prosecuted by Assistant U.S. Attorney Evan Davis of the U.S. Attorney’s Office for the Central District of California with assistance from the Criminal Division’s Fraud Section. Assistant U.S. Attorney Jonathan Schmidt is prosecuting the charges in the Northern District of California, which were transferred to the Central District of California for entry of the guilty pleas.
This prosecution is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorney’s offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants.
Monday, August 5, 2013
Former Federal Fugitive Sentenced in California for Nationwide Foreclosure Scam
Collected More Than $1.2 Million from More Than 800 Distressed Homeowners
Glen Alan Ward, 48, a former Los Angeles resident who fled to Canada and was a federal fugitive for 12 years, was sentenced today to serve 132 months in prison for aggravated identity theft and bankruptcy fraud in connection with his leading role in a nearly 15-year foreclosure-rescue scam that fraudulently postponed foreclosure sales for more than 800 distressed homeowners.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney André Birotte Jr. of the Central District of California, U.S. Attorney for the Northern District of California Melinda Haag, Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office, Special Agent in Charge David J. Johnson of the FBI’s San Francisco Field Office and Special Inspector General for the Troubled Asset Relief Program Christy Romero made the announcement.
Ward was sentenced by U.S. District Judge Dale S. Fischer in the Central District of California. In addition to his prison term, Ward was sentenced to serve three years of supervised release and ordered to pay approximately $60,000 in restitution.
Ward pleaded guilty on April 8, 2013, in connection with three separate sets of charges in the Central and Northern Districts of California, all stemming from Ward’s 15-year fraud. In 2000, Ward became a federal fugitive when he failed to appear in court after signing a plea agreement, which arose out of federal charges in 2000 in the Central District of California related to Ward’s early conduct in the scheme. In 2002, Ward was indicted on multiple counts of bankruptcy fraud in the Northern District of California for continuing the scheme in and around San Francisco. On Aug. 17, 2012, Ward was indicted on mail fraud, aggravated identity theft, and additional bankruptcy fraud counts in the Central District of California after fleeing to Canada and continuing his fraud from there. While in Canada, Ward recruited Frederic Alan Gladle, who was indicted in the Central District of California for bankruptcy fraud and identity theft in 2011, and was sentenced in 2012 on his guilty plea to 61 months in custody for engaging in similar conduct.
On April 5, 2012, Ward was arrested in Canada by the Royal Canadian Mounted Police and the Waterloo Regional Police Service based on a U.S. provisional arrest warrant. On Dec. 21, 2012, Ward was extradited to the United States to answer all three sets of charges.
According to the plea agreement, Ward led a scheme that solicited and recruited homeowners whose properties were in danger of imminent foreclosure. Ward promised to delay their foreclosures for as long as the homeowners could afford his $700 monthly fee. Once a homeowner paid the fee, Ward accessed a public bankruptcy database and retrieved the name of an individual debtor who recently filed bankruptcy. Ward admitted that he obtained copies of unsuspecting debtors’ bankruptcy petitions and directed his clients to execute, notarize and record a grant deed transferring generally a 1/100th fractional interest in their distressed home into the name of the debtor that Ward provided. Then, after stealing the debtor’s identity, Ward faxed a copy of the bankruptcy petition, the notarized grant deed and a cover letter to the homeowner’s lender or the lender’s representative, directing it to stop the impending foreclosure sale due to the bankruptcy.
Because bankruptcy filings give rise to automatic stays that protect debtors’ properties, the receipt of the bankruptcy petitions and deeds in the debtors’ names forced lenders to cancel foreclosure sales. The lenders, which included banks that received government funds under the Troubled Asset Relief Program (TARP), could not move forward to collect money that was owed to them until getting permission from the bankruptcy courts, thereby repeatedly delaying the lenders’ recovery of their money for months and even years. In addition, if a distressed homeowner wanted to complete a loan modification or short sale, they were left to the mercy of Ward to send them forged deeds, supposedly signed by the debtors, to re-unify their title as required by most lenders.
As part of the scheme, Ward delayed the foreclosure sales of approximately 824 distressed properties by using at least 414 bankruptcies filed in 26 judicial districts across the country. During that same period, Ward admitted to collecting from his clients who paid for his illegal foreclosure-delay services more than $1.2 million.
The investigation was conducted by the Office of the Special Inspector General for the Troubled Asset Relief Program and the FBI, which received substantial assistance from the U.S. Trustee’s Office. In addition, the Office of International Affairs of the Department of Justice, Canadian Waterloo Regional Police Service and Royal Canadian Mounted Police provided exceptional support and assistance in connection with Ward’s arrest and extradition.
This case was prosecuted by Assistant U.S. Attorney Evan Davis of the U.S. Attorney’s Office for the Central District of California with assistance from the Criminal Division’s Fraud Section. Assistant U.S. Attorney Jonathan Schmidt is prosecuting the charges in the Northern District of California, which were transferred to the Central District of California for entry of the guilty pleas.
This prosecution is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorney’s offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants.
STATE DEPARTMENT PROGRAM PROMOTING GOVERNMENT ACCOUNTABILITY
FROM U.S. DEPARTMENT OF STATE
Promoting Greater Government Accountability Through the Extractive Industries Transparency Initiative
POSTED BY ROBERT F. CEKUTA
AUGUST 2, 2013
Last week was an important one here in Washington for the Extractive Industries Transparency Initiative (EITI), an international group that countries can join to promote accountability in the management of payments countries receive from oil, gas, and mining activities. While the United States has long supported the EITI as a donor, we have committed to joining the initiative as an implementing member and taking on the same obligations to boost transparency as other countries around the globe (USEITI). This step by the United States is a strong sign of the growing momentum towards greater transparency and accountability apparent in the world today.
The team of U.S. government, civil society, and company representatives that is charged with implementing USEITI met last week and discussed these developments with Clare Short, Chair of the international EITI Board (and former UK Development Minister).
I have the great pleasure of serving with Clare on the international EITI Board, where we worked hard to develop a set of changes in the EITI rules to enable the Initiative to have a greater impact benefiting citizens of the 39 member countries. It was not easy for the Board to agree on these changes and there were many strongly held points of view. After months of work and debate, we succeeded and the resulting consensus sets out a strong sense of what EITI should stand for and how to put in place systems to boost the government transparency and accountability that EITI seeks to promote.
In June, President Obama and all the G8 Leaders strongly supported this work. Their Lough Erne Summit statement references the EITI eleven times, which is a remarkable sign not only of how truly widely supported the EITI has become, but also of the growing awareness of the connection between sound governance, the ability of countries to attract capital, and economic prosperity. Several of our G8 partners – the UK, France, Germany, and Italy – are following the United States’ example by committing to implement or pilot the EITI at home. Other countries that have recently committed, including Colombia and Papua New Guinea, will also be looking to our domestic USEITI process for lessons learned.
So it is in this context that it was truly special to have Clare join us to see the USEITI process in action. Just as the international EITI Board discussed EITI’s goals at an international level, the USEITI representatives are working through what meaning EITI will have inside the United States. This group representing various American stakeholders is showing the Initiative’s goals are important and applicable to countries that already consider themselves quite transparent.
The work here underlines that EITI is about much more than just meeting the Initiative’s core requirement to publish reports matching company payments to government receipts. The USEITI discussions are highlighting that it is about bringing diverse groups together to identify what additional information the partners can make available to be even more transparent, and how to communicate accurate and timely information to the public about how the government is managing our oil, gas, and mining resources. In many cases it is even about pulling together and putting into context information that is already available, in order to help the average citizen hold their government accountable for responsible extractive sector management. And it will be important in many countries around in the world in seeing that the development of their natural resources benefits their people.
Promoting Greater Government Accountability Through the Extractive Industries Transparency Initiative
POSTED BY ROBERT F. CEKUTA
AUGUST 2, 2013
Last week was an important one here in Washington for the Extractive Industries Transparency Initiative (EITI), an international group that countries can join to promote accountability in the management of payments countries receive from oil, gas, and mining activities. While the United States has long supported the EITI as a donor, we have committed to joining the initiative as an implementing member and taking on the same obligations to boost transparency as other countries around the globe (USEITI). This step by the United States is a strong sign of the growing momentum towards greater transparency and accountability apparent in the world today.
The team of U.S. government, civil society, and company representatives that is charged with implementing USEITI met last week and discussed these developments with Clare Short, Chair of the international EITI Board (and former UK Development Minister).
I have the great pleasure of serving with Clare on the international EITI Board, where we worked hard to develop a set of changes in the EITI rules to enable the Initiative to have a greater impact benefiting citizens of the 39 member countries. It was not easy for the Board to agree on these changes and there were many strongly held points of view. After months of work and debate, we succeeded and the resulting consensus sets out a strong sense of what EITI should stand for and how to put in place systems to boost the government transparency and accountability that EITI seeks to promote.
In June, President Obama and all the G8 Leaders strongly supported this work. Their Lough Erne Summit statement references the EITI eleven times, which is a remarkable sign not only of how truly widely supported the EITI has become, but also of the growing awareness of the connection between sound governance, the ability of countries to attract capital, and economic prosperity. Several of our G8 partners – the UK, France, Germany, and Italy – are following the United States’ example by committing to implement or pilot the EITI at home. Other countries that have recently committed, including Colombia and Papua New Guinea, will also be looking to our domestic USEITI process for lessons learned.
So it is in this context that it was truly special to have Clare join us to see the USEITI process in action. Just as the international EITI Board discussed EITI’s goals at an international level, the USEITI representatives are working through what meaning EITI will have inside the United States. This group representing various American stakeholders is showing the Initiative’s goals are important and applicable to countries that already consider themselves quite transparent.
The work here underlines that EITI is about much more than just meeting the Initiative’s core requirement to publish reports matching company payments to government receipts. The USEITI discussions are highlighting that it is about bringing diverse groups together to identify what additional information the partners can make available to be even more transparent, and how to communicate accurate and timely information to the public about how the government is managing our oil, gas, and mining resources. In many cases it is even about pulling together and putting into context information that is already available, in order to help the average citizen hold their government accountable for responsible extractive sector management. And it will be important in many countries around in the world in seeing that the development of their natural resources benefits their people.
FORMER FBI SPECIAL AGENT CHARGED WITH BRIBERY
FROM: U.S. JUSTICE DEPARTMENT
Friday, August 2, 2013
Former FBI Special Agent and Two Co-Conspirators Charged with Bribery Scheme
A former FBI agent and two others have been charged in the Southern District of New York with engaging in a bribery scheme to secure confidential, internal law enforcement documents about a prominent individual in Bangladesh.
Acting Assistant U.S. Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Preet Bharara of the Southern District of New York, and Inspector General Michael E. Horowitz of the Department of Justice made the announcement.
Robert Lustyik, 50, a former FBI special agent in the White Plains Resident Agency, is accused in a criminal complaint of conspiring with his friend, Johannes Thaler, 49, of soliciting cash payments from Thaler’s acquaintance, Rizve Ahmed, 34, aka “Caesar,” in exchange for confidential, internal law enforcement documents and information that Lustyik could access by virtue of his position at the FBI. Ahmed and Thaler were arrested today on the charges in the complaint and will be presented later today before U.S. Magistrate Judge George A. Yanthis in the federal court in White Plains. Lustyik is currently detained in connection with an unrelated indictment in U.S. District Court for the District of Utah, where he will be initially presented on the charges in the complaint.
Lustyik, Thaler, and Ahmed are each charged in a four-count complaint. Count one charges Lustyik, Thaler, and Ahmed with conspiring to bribe a public official. Count two charges Lustyik and Thaler with soliciting and receiving bribes. Count three charges Ahmed with bribing a public official and offering to bribe a public official. Count four charges Lustyik with unlawfully disclosing a Suspicious Activity Report.
If convicted, Lustyik, of Westchester County, faces a maximum sentence of 25 years in prison. Thaler, of Fairfield County, Conn., faces a maximum sentence of 20 years in prison. Ahmed, of Fairfield County, faces a maximum sentence of 20 years in prison.
According to allegations in the complaint unsealed today in the White Plains federal courthouse, from about September 2011 through March 2012, Lustyik, Thaler and Ahmed engaged in a bribery scheme on behalf of Ahmed, a native of Bangladesh who sought confidential law enforcement information pertaining to a prominent citizen of Bangladesh who was affiliated with an opposing political party (Individual 1). Ahmed sought, among other things, to obtain information about Individual 1, to locate Individual 1, and to harm Individual 1 and others associated with Individual 1.
As part of the scheme, Lustyik and Thaler exchanged text messages, including messages about how to pressure Ahmed to pay them additional money in exchange for confidential information. For example, in text messages, Lustyik told Thaler, “we need to push [Ahmed] for this meeting and get that 40 gs quick . . . . I will talk us into getting the cash . . . . I will work my magic . . . . We r sooooooo close.” Thaler responded, “I know. It’s all right there in front of us. Pretty soon we’ll be having lunch in our oceanfront restaurant . . . .” As another example, in or about late January 2012, Lustyik, upon learning that Ahmed was considering using a different source to obtain confidential information about Individual 1, texted Thaler, “I want to kill [Ahmed] . . . . I hung my [***] out the window n we got nothing? . . . . Tell [Ahmed], I’ve got [Individual 1’s] number and I’m pissed. . . . I will put a wire on n get [Ahmed and his associates] to admit they want [a Bangladeshi political figure] offed n we sell it to [Individual 1].”
According to the complaint, Lustyik and Thaler accepted at least $1,000 from Ahmed in exchange for confidential FBI information, including a Suspicious Activity Report. The complaint also alleges that Lustyik and Thaler schemed to obtain monthly cash bribes from Ahmed, in increments of tens of thousands of dollars, in exchange for the provision of additional confidential law enforcement information about Individual 1 and for assistance in having criminal charges against a Bangladeshi political figure dismissed.
This case was investigated by the Department of Justice’s Office of Inspector General. The prosecution is being handled by the U.S. Attorney’s Office for the Southern District of New York’s White Plains Division and by the Public Integrity Section of the U.S. Department of Justice’ Criminal Division. Assistant U. S. Attorney Benjamin Allee and Trial Attorney Emily Rae Woods are in charge of the prosecution.
The charges in the complaint are merely accusations, and the defendants are presumed innocent until and unless proven guilty.
Friday, August 2, 2013
Former FBI Special Agent and Two Co-Conspirators Charged with Bribery Scheme
A former FBI agent and two others have been charged in the Southern District of New York with engaging in a bribery scheme to secure confidential, internal law enforcement documents about a prominent individual in Bangladesh.
Acting Assistant U.S. Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Preet Bharara of the Southern District of New York, and Inspector General Michael E. Horowitz of the Department of Justice made the announcement.
Robert Lustyik, 50, a former FBI special agent in the White Plains Resident Agency, is accused in a criminal complaint of conspiring with his friend, Johannes Thaler, 49, of soliciting cash payments from Thaler’s acquaintance, Rizve Ahmed, 34, aka “Caesar,” in exchange for confidential, internal law enforcement documents and information that Lustyik could access by virtue of his position at the FBI. Ahmed and Thaler were arrested today on the charges in the complaint and will be presented later today before U.S. Magistrate Judge George A. Yanthis in the federal court in White Plains. Lustyik is currently detained in connection with an unrelated indictment in U.S. District Court for the District of Utah, where he will be initially presented on the charges in the complaint.
Lustyik, Thaler, and Ahmed are each charged in a four-count complaint. Count one charges Lustyik, Thaler, and Ahmed with conspiring to bribe a public official. Count two charges Lustyik and Thaler with soliciting and receiving bribes. Count three charges Ahmed with bribing a public official and offering to bribe a public official. Count four charges Lustyik with unlawfully disclosing a Suspicious Activity Report.
If convicted, Lustyik, of Westchester County, faces a maximum sentence of 25 years in prison. Thaler, of Fairfield County, Conn., faces a maximum sentence of 20 years in prison. Ahmed, of Fairfield County, faces a maximum sentence of 20 years in prison.
According to allegations in the complaint unsealed today in the White Plains federal courthouse, from about September 2011 through March 2012, Lustyik, Thaler and Ahmed engaged in a bribery scheme on behalf of Ahmed, a native of Bangladesh who sought confidential law enforcement information pertaining to a prominent citizen of Bangladesh who was affiliated with an opposing political party (Individual 1). Ahmed sought, among other things, to obtain information about Individual 1, to locate Individual 1, and to harm Individual 1 and others associated with Individual 1.
As part of the scheme, Lustyik and Thaler exchanged text messages, including messages about how to pressure Ahmed to pay them additional money in exchange for confidential information. For example, in text messages, Lustyik told Thaler, “we need to push [Ahmed] for this meeting and get that 40 gs quick . . . . I will talk us into getting the cash . . . . I will work my magic . . . . We r sooooooo close.” Thaler responded, “I know. It’s all right there in front of us. Pretty soon we’ll be having lunch in our oceanfront restaurant . . . .” As another example, in or about late January 2012, Lustyik, upon learning that Ahmed was considering using a different source to obtain confidential information about Individual 1, texted Thaler, “I want to kill [Ahmed] . . . . I hung my [***] out the window n we got nothing? . . . . Tell [Ahmed], I’ve got [Individual 1’s] number and I’m pissed. . . . I will put a wire on n get [Ahmed and his associates] to admit they want [a Bangladeshi political figure] offed n we sell it to [Individual 1].”
According to the complaint, Lustyik and Thaler accepted at least $1,000 from Ahmed in exchange for confidential FBI information, including a Suspicious Activity Report. The complaint also alleges that Lustyik and Thaler schemed to obtain monthly cash bribes from Ahmed, in increments of tens of thousands of dollars, in exchange for the provision of additional confidential law enforcement information about Individual 1 and for assistance in having criminal charges against a Bangladeshi political figure dismissed.
This case was investigated by the Department of Justice’s Office of Inspector General. The prosecution is being handled by the U.S. Attorney’s Office for the Southern District of New York’s White Plains Division and by the Public Integrity Section of the U.S. Department of Justice’ Criminal Division. Assistant U. S. Attorney Benjamin Allee and Trial Attorney Emily Rae Woods are in charge of the prosecution.
The charges in the complaint are merely accusations, and the defendants are presumed innocent until and unless proven guilty.
LABOR DEPARTMENT, WAL-MART RESOLVE OSHA CITATIONS
FROM: U.S. DEPARTMENT OF LABOR
Wal-Mart signs corporate-wide settlement with US Labor Department
Agreement resolves OSHA citations at Rochester, N.Y., store following 2011 inspections
WASHINGTON —Wal-Mart Stores, Inc., has entered into a corporate-wide settlement agreement with the U.S. Department of Labor to improve safety and health conditions in all 2,857 Wal-Mart and Sam’s Club stores under federal jurisdiction. The settlement, which resolves two enforcement cases that began in 2011, includes provisions for the Bentonville, Ark.-based retailer to enhance safety and health practices and training related to trash compactors, cleaning chemicals and hazard communications corporate-wide.
“This settlement will help to keep thousands of exposed Wal-Mart workers safe and healthy on the job,” said Assistant Secretary of Labor for Occupational Safety and Health Dr. David Michaels. “We hope this sends a strong message that the law requires employers to provide safe working conditions, and OSHA will use all the tools at our disposal to ensure that all employers follow the law.”
Under the settlement, trash compactors must remain locked while not in use, and may not be operated except under the supervision of a trained manager or other trained, designated monitor. Wal-Mart will also improve its hazard communications training; and, for cleaning chemicals, will enhance its procedures to ensure that employees do not handle undiluted chemicals. Also, the company must ensure that a protective protocol is in place in case of any malfunctions with a store’s cleaning chemicals dispensing equipment. Wal-Mart will ensure employees are trained on the new procedures in a language, format, and vocabulary that the workers can understand.
For the safety citations pertinent to the corporate-wide trash compactor abatement, the settlement affirms one repeat lockout/tagout citation, two serious lockout/tagout citations, two serious confined space citations, and one serious machine guarding citation.
For the health citations pertinent to the corporate-wide cleaning chemical and hazard communication abatement, the settlement affirms two serious citations related to personal protective equipment, and two serious hazard communication citations.
A summary of the agreement will be posted in each affected store.
Settlement negotiations followed issuance of citations from two separate inspections conducted at the Wal-Mart Supercenter store in Rochester, N.Y. A safety inspection was initiated on Aug. 2, 2011, and a health inspection began Aug. 17, 2011. As part of the settlement, Wal-Mart has also agreed to abate other hazards in the Rochester store unrelated to the corporate-wide remedy, and will pay $190,000 in civil penalties.
For the citations not related to the corporate-wide abatement, citations affirmed in the settlement include one repeat electrical hazard citation, one serious citation for obstructed exit routes, two serious machine guarding citations, one repeat other-than-serious platform fall hazard citation, and 11 serious blood borne pathogens citations.
Wal-Mart signs corporate-wide settlement with US Labor Department
Agreement resolves OSHA citations at Rochester, N.Y., store following 2011 inspections
WASHINGTON —Wal-Mart Stores, Inc., has entered into a corporate-wide settlement agreement with the U.S. Department of Labor to improve safety and health conditions in all 2,857 Wal-Mart and Sam’s Club stores under federal jurisdiction. The settlement, which resolves two enforcement cases that began in 2011, includes provisions for the Bentonville, Ark.-based retailer to enhance safety and health practices and training related to trash compactors, cleaning chemicals and hazard communications corporate-wide.
“This settlement will help to keep thousands of exposed Wal-Mart workers safe and healthy on the job,” said Assistant Secretary of Labor for Occupational Safety and Health Dr. David Michaels. “We hope this sends a strong message that the law requires employers to provide safe working conditions, and OSHA will use all the tools at our disposal to ensure that all employers follow the law.”
Under the settlement, trash compactors must remain locked while not in use, and may not be operated except under the supervision of a trained manager or other trained, designated monitor. Wal-Mart will also improve its hazard communications training; and, for cleaning chemicals, will enhance its procedures to ensure that employees do not handle undiluted chemicals. Also, the company must ensure that a protective protocol is in place in case of any malfunctions with a store’s cleaning chemicals dispensing equipment. Wal-Mart will ensure employees are trained on the new procedures in a language, format, and vocabulary that the workers can understand.
For the safety citations pertinent to the corporate-wide trash compactor abatement, the settlement affirms one repeat lockout/tagout citation, two serious lockout/tagout citations, two serious confined space citations, and one serious machine guarding citation.
For the health citations pertinent to the corporate-wide cleaning chemical and hazard communication abatement, the settlement affirms two serious citations related to personal protective equipment, and two serious hazard communication citations.
A summary of the agreement will be posted in each affected store.
Settlement negotiations followed issuance of citations from two separate inspections conducted at the Wal-Mart Supercenter store in Rochester, N.Y. A safety inspection was initiated on Aug. 2, 2011, and a health inspection began Aug. 17, 2011. As part of the settlement, Wal-Mart has also agreed to abate other hazards in the Rochester store unrelated to the corporate-wide remedy, and will pay $190,000 in civil penalties.
For the citations not related to the corporate-wide abatement, citations affirmed in the settlement include one repeat electrical hazard citation, one serious citation for obstructed exit routes, two serious machine guarding citations, one repeat other-than-serious platform fall hazard citation, and 11 serious blood borne pathogens citations.
Wednesday, August 7, 2013
SEC OBTAINS COURT ORDER TO HALT ALLEGED HEDGE FUND FRAUD TARGETING MILITARY PERSONNEL
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
SEC Halts Ex-Marine’s Hedge Fund Fraud Targeting Fellow Military
FOR IMMEDIATE RELEASE
2013-149
Washington D.C., Aug. 6, 2013 —
The Securities and Exchange Commission today obtained an emergency court order to halt a hedge fund investment scheme by a former Marine living in the Chicago area who has been masquerading as a successful trader to defraud fellow veterans, current military, and other investors.
The SEC alleges that Clayton A. Cohn and his hedge fund management firm Market Action Advisors raised nearly $1.8 million from investors through a hedge fund he managed. Cohn lied to investors about his success as a trader, the performance of the hedge fund, his use of investor proceeds, and his personal stake in the hedge fund. Cohn only invested less than half of the money raised from investors and instead used more than $400,000 for such personal expenses as a Hollywood mansion, luxury automobile, and extravagant tabs at high-end nightclubs. He used his lavish lifestyle to carefully contrive the image of a successful trader and investor, when in reality he lost nearly all of the money invested through the hedge fund. In order to cover up his fraud and continue raising money from investors, Cohn generated phony hedge fund account statements showing annual returns exceeding 200 percent.
“Cohn lured fellow military and other investors into his hedge fund by portraying himself as a successful trader who generated massive returns for his investors,” said Timothy L. Warren, Acting Director of the Chicago Regional Office. “But Cohn’s hedge fund investors didn’t have a chance to make a profit since he never invested most of their money and promptly lost the portion he did invest.”
According to the SEC’s complaint filed in federal court in Chicago, Cohn targets mostly unsophisticated investors and has solicited friends, family members, and fellow veterans to invest in his hedge fund. Cohn controls a so-called charity called the Veterans Financial Education Network (VFEN) that purports to teach veterans how to understand and manage their money. Cohn has touted his Marine Corps pedigree in VFEN press releases and encourages veterans to find “a money-manager who is both trustworthy and knows what he is doing.” VFEN’s website identifies Cohn as a money manager who “manages millions of dollars.”
According to the SEC’s complaint, Cohn managed his hedge fund Market Action Capital Management through his investment advisory firm Market Action Advisors, which is registered with the state of Illinois. Cohn solicited investments by falsely claiming that he had major success as a personal trader and invested $1.5 million of his own money in the hedge fund. He also misrepresented that an accounting firm would audit the hedge fund’s financial statements.
The SEC alleges that Cohn had a record of trading losses, invested no more than $4,000 of his own money, and absconded with far more money for his personal expenses. The audit firm named by Cohn never agreed to audit the fund’s financial statements. Cohn continued to deceive investors after their initial investment by issuing account statements that showed annual returns of more than 200 percent for 2012 when the hedge fund actually lost money.
The SEC’s complaint charges Cohn and Market Action Advisors with violating the antifraud provisions of the federal securities laws. The court granted the SEC’s request for emergency relief including a temporary restraining order and asset freeze. The SEC further seeks permanent injunctions, disgorgement of ill-gotten gains, and financial penalties from Cohn and Market Action Advisors.
The SEC’s investigation was conducted by John J. Sikora, Jr. and Jason A. Howard, and the litigation will be led by Jonathan S. Polish.
SEC Halts Ex-Marine’s Hedge Fund Fraud Targeting Fellow Military
FOR IMMEDIATE RELEASE
2013-149
Washington D.C., Aug. 6, 2013 —
The Securities and Exchange Commission today obtained an emergency court order to halt a hedge fund investment scheme by a former Marine living in the Chicago area who has been masquerading as a successful trader to defraud fellow veterans, current military, and other investors.
The SEC alleges that Clayton A. Cohn and his hedge fund management firm Market Action Advisors raised nearly $1.8 million from investors through a hedge fund he managed. Cohn lied to investors about his success as a trader, the performance of the hedge fund, his use of investor proceeds, and his personal stake in the hedge fund. Cohn only invested less than half of the money raised from investors and instead used more than $400,000 for such personal expenses as a Hollywood mansion, luxury automobile, and extravagant tabs at high-end nightclubs. He used his lavish lifestyle to carefully contrive the image of a successful trader and investor, when in reality he lost nearly all of the money invested through the hedge fund. In order to cover up his fraud and continue raising money from investors, Cohn generated phony hedge fund account statements showing annual returns exceeding 200 percent.
“Cohn lured fellow military and other investors into his hedge fund by portraying himself as a successful trader who generated massive returns for his investors,” said Timothy L. Warren, Acting Director of the Chicago Regional Office. “But Cohn’s hedge fund investors didn’t have a chance to make a profit since he never invested most of their money and promptly lost the portion he did invest.”
According to the SEC’s complaint filed in federal court in Chicago, Cohn targets mostly unsophisticated investors and has solicited friends, family members, and fellow veterans to invest in his hedge fund. Cohn controls a so-called charity called the Veterans Financial Education Network (VFEN) that purports to teach veterans how to understand and manage their money. Cohn has touted his Marine Corps pedigree in VFEN press releases and encourages veterans to find “a money-manager who is both trustworthy and knows what he is doing.” VFEN’s website identifies Cohn as a money manager who “manages millions of dollars.”
According to the SEC’s complaint, Cohn managed his hedge fund Market Action Capital Management through his investment advisory firm Market Action Advisors, which is registered with the state of Illinois. Cohn solicited investments by falsely claiming that he had major success as a personal trader and invested $1.5 million of his own money in the hedge fund. He also misrepresented that an accounting firm would audit the hedge fund’s financial statements.
The SEC alleges that Cohn had a record of trading losses, invested no more than $4,000 of his own money, and absconded with far more money for his personal expenses. The audit firm named by Cohn never agreed to audit the fund’s financial statements. Cohn continued to deceive investors after their initial investment by issuing account statements that showed annual returns of more than 200 percent for 2012 when the hedge fund actually lost money.
The SEC’s complaint charges Cohn and Market Action Advisors with violating the antifraud provisions of the federal securities laws. The court granted the SEC’s request for emergency relief including a temporary restraining order and asset freeze. The SEC further seeks permanent injunctions, disgorgement of ill-gotten gains, and financial penalties from Cohn and Market Action Advisors.
The SEC’s investigation was conducted by John J. Sikora, Jr. and Jason A. Howard, and the litigation will be led by Jonathan S. Polish.
U.S. EXPORT-IMPORT BANK SAYS EXPORTS REACH ALL-TIME HIGH
FROM: EXPORT-IMPORT BANK
U.S. Exports Reach All-Time High of $191.2 Billion in June
Exports Up 41.5 Percent Since 2009
WASHINGTON, D.C. – The United States exported a record $191.2 billion of goods and services in June 2013, according to trade data was released today by the Bureau of Economic Analysis (BEA) of the U.S. Commerce Department.
U.S. exports in June 2013 reached an all-time high, exceeding the previous record of $188.7 billion set in December 2012. The June export level is also 2.2 percent higher than that of the previous month.
“Today’s announcement of record-level U.S. exports in June is a testament to the strength of American exports. Increased exports mean more jobs here at home – the goal of President Obama’s National Export Initiative. We at Ex-Im Bank work every day to help American exporters and their workers succeed in selling their products and services in an increasingly competitive global marketplace,” said Ex-Im Bank Chairman and President Fred P. Hochberg.
Exports of goods and services over the past twelve months totaled $2.2 trillion, which is 41.5 percent above the level of exports in 2009. Exports have been growing at an annualized rate of 10.4 percent when compared to the same period in 2009.
Over the last twelve months, among the major export markets (i.e., markets with at least $6 billion in annual imports of U.S. goods), the countries with the largest annualized increase in U.S. goods purchases, when compared to 2009, occurred in Panama (28.6 percent), United Arab Emirates (23.1 percent), Russia (22.6 percent), Peru (21.9 percent), Chile (21.4 percent), Colombia (19.5 percent), Hong Kong (19.2 percent), Argentina (18.5 percent), South Africa (18.3 percent) and Venezuela (18.1 percent).
U.S. Exports Reach All-Time High of $191.2 Billion in June
Exports Up 41.5 Percent Since 2009
WASHINGTON, D.C. – The United States exported a record $191.2 billion of goods and services in June 2013, according to trade data was released today by the Bureau of Economic Analysis (BEA) of the U.S. Commerce Department.
U.S. exports in June 2013 reached an all-time high, exceeding the previous record of $188.7 billion set in December 2012. The June export level is also 2.2 percent higher than that of the previous month.
“Today’s announcement of record-level U.S. exports in June is a testament to the strength of American exports. Increased exports mean more jobs here at home – the goal of President Obama’s National Export Initiative. We at Ex-Im Bank work every day to help American exporters and their workers succeed in selling their products and services in an increasingly competitive global marketplace,” said Ex-Im Bank Chairman and President Fred P. Hochberg.
Exports of goods and services over the past twelve months totaled $2.2 trillion, which is 41.5 percent above the level of exports in 2009. Exports have been growing at an annualized rate of 10.4 percent when compared to the same period in 2009.
Over the last twelve months, among the major export markets (i.e., markets with at least $6 billion in annual imports of U.S. goods), the countries with the largest annualized increase in U.S. goods purchases, when compared to 2009, occurred in Panama (28.6 percent), United Arab Emirates (23.1 percent), Russia (22.6 percent), Peru (21.9 percent), Chile (21.4 percent), Colombia (19.5 percent), Hong Kong (19.2 percent), Argentina (18.5 percent), South Africa (18.3 percent) and Venezuela (18.1 percent).
SECRETARY OF STATE KERRY'S STATEMENT ON THE FOUNDING OF ASEAN
FROM: U.S. STATE DEPARTMENT
Marking the Anniversary of the Founding of ASEAN
Press Statement
John Kerry
Secretary of State
Washington, DC
August 6, 2013
On behalf of President Obama and the people of the United States, we join the 600 million people of the member states of the Association of Southeast Asian Nations (ASEAN) - Brunei Darussalam, the Kingdom of Cambodia, the Republic of Indonesia, the Lao People's Democratic Republic, Malaysia, the Republic of the Union of Myanmar, the Republic of the Philippines, the Republic of Singapore, the Kingdom of Thailand, and the Socialist Republic of Vietnam - in marking the 46th anniversary of the founding of ASEAN.
ASEAN plays a critical and growing role in Asia through promoting regional integration and maintaining regional security. As the central regional organization in Asia, ASEAN is the keystone for Asia’s multilateral architecture, including the ASEAN Regional Forum and the East Asia Summit.
The United States is deeply committed to supporting and partnering with ASEAN. The United States was the first dialogue partner nation to establish a dedicated mission to ASEAN. Our engagement with ASEAN has led to collaboration on everything from maritime security to investing in sustainable energy resources to development in the Lower Mekong sub-region.
I was privileged to participate in my first ASEAN-U.S. Ministerial meeting just last month in Brunei to advance our cooperation on this wide range of shared interests, and I look forward to deepening and broadening our cooperation in the coming years. And I know that President Obama looks forward to participating in the East Asia Summit and the ASEAN-U.S. Summit in Brunei in October.
As we celebrate the anniversary of the founding of ASEAN, know that the United States stands with you as a steadfast partner.
Marking the Anniversary of the Founding of ASEAN
Press Statement
John Kerry
Secretary of State
Washington, DC
August 6, 2013
On behalf of President Obama and the people of the United States, we join the 600 million people of the member states of the Association of Southeast Asian Nations (ASEAN) - Brunei Darussalam, the Kingdom of Cambodia, the Republic of Indonesia, the Lao People's Democratic Republic, Malaysia, the Republic of the Union of Myanmar, the Republic of the Philippines, the Republic of Singapore, the Kingdom of Thailand, and the Socialist Republic of Vietnam - in marking the 46th anniversary of the founding of ASEAN.
ASEAN plays a critical and growing role in Asia through promoting regional integration and maintaining regional security. As the central regional organization in Asia, ASEAN is the keystone for Asia’s multilateral architecture, including the ASEAN Regional Forum and the East Asia Summit.
The United States is deeply committed to supporting and partnering with ASEAN. The United States was the first dialogue partner nation to establish a dedicated mission to ASEAN. Our engagement with ASEAN has led to collaboration on everything from maritime security to investing in sustainable energy resources to development in the Lower Mekong sub-region.
I was privileged to participate in my first ASEAN-U.S. Ministerial meeting just last month in Brunei to advance our cooperation on this wide range of shared interests, and I look forward to deepening and broadening our cooperation in the coming years. And I know that President Obama looks forward to participating in the East Asia Summit and the ASEAN-U.S. Summit in Brunei in October.
As we celebrate the anniversary of the founding of ASEAN, know that the United States stands with you as a steadfast partner.
FTC SEEKS CONTEMPT RULING AGAINST DEFENDANTS WHO VIOLATED A PERMANENT INJUNCTION
FROM: U.S. FEDERAL TRADE COMMISSION
FTC Seeks Contempt Ruling Against Suntasia Telemarketing Defendants
Defendants Ordered to Pay Over $11 Million in 2008
The Federal Trade Commission is seeking a contempt order in federal court against defendants previously involved in a massive, Florida-based marketing scheme, alleging that they violated the terms of a court-ordered permanent injunction by engaging in some of the same deceptive tactics that led to the FTC’s prior charges against them.
In 2007, the FTC took action against the defendants behind Suntasia Marketing, Inc., charging them with deceptively marketing negative option programs to consumers nationwide. According to the agency, the defendants defrauded consumers and charged their bank accounts without consent for various negative option programs, including memberships in discount buyer’s and travel clubs. In a negative option program, a company takes consumers’ silence or failure to cancel the program as acceptance of the offer and permission to debit funds from their accounts.
The defendants agreed to the 2008 injunction in order to settle the FTC’s charges. Under the settlement, 14 defendants involved in the scheme were required to pay more than $16 million. In particular, defendants Bryon Wolf and Roy Eliasson were required to pay over $11 million, and were barred from misrepresenting material facts regarding an offer, failing to disclose material terms of what they sell, debiting consumers’ accounts without their consent, and other unlawful acts.
But according to the FTC, within months of the court’s 2008 order, defendants Bryon Wolf and Roy Eliasson, and their firm Membership Services, LLC, which Wolf and Eliasson control, devised a new plan to defraud consumers. In this scheme, they targeted recent loan applicants with deceptive phone and Internet solicitations that misled consumers to believe the defendants would provide them with cash advances or loans, or general lines of credit. Instead of providing these services, the defendants debited consumers’ accounts for membership in a continuity program. Very few consumers used the program and many cancelled upon discovering their account had been debited by defendants. The continuity plans go under the names “Monster Rewards,” “Mongo,” and “Money on the Go.”
Based on this conduct, the FTC charged the defendants with violating the permanent injunction by making misrepresentations to consumers about their programs, by failing to make key disclosures, by failing to get express informed consent before debiting consumers’ accounts, and by failing to disclose clearly and promptly their programs during telemarketed solicitations. According to the FTC, through their deceptive actions, the defendants have netted over $9 million.
The civil contempt action was filed under seal in the U.S. District Court for the Middle District of Florida, Tampa Division on May 22, 2013, and unsealed by the Court on July 31, 2013. It names as defendants Bryon Wolf, Roy Eliasson, and Membership Services, LLC.
FTC Seeks Contempt Ruling Against Suntasia Telemarketing Defendants
Defendants Ordered to Pay Over $11 Million in 2008
The Federal Trade Commission is seeking a contempt order in federal court against defendants previously involved in a massive, Florida-based marketing scheme, alleging that they violated the terms of a court-ordered permanent injunction by engaging in some of the same deceptive tactics that led to the FTC’s prior charges against them.
In 2007, the FTC took action against the defendants behind Suntasia Marketing, Inc., charging them with deceptively marketing negative option programs to consumers nationwide. According to the agency, the defendants defrauded consumers and charged their bank accounts without consent for various negative option programs, including memberships in discount buyer’s and travel clubs. In a negative option program, a company takes consumers’ silence or failure to cancel the program as acceptance of the offer and permission to debit funds from their accounts.
The defendants agreed to the 2008 injunction in order to settle the FTC’s charges. Under the settlement, 14 defendants involved in the scheme were required to pay more than $16 million. In particular, defendants Bryon Wolf and Roy Eliasson were required to pay over $11 million, and were barred from misrepresenting material facts regarding an offer, failing to disclose material terms of what they sell, debiting consumers’ accounts without their consent, and other unlawful acts.
But according to the FTC, within months of the court’s 2008 order, defendants Bryon Wolf and Roy Eliasson, and their firm Membership Services, LLC, which Wolf and Eliasson control, devised a new plan to defraud consumers. In this scheme, they targeted recent loan applicants with deceptive phone and Internet solicitations that misled consumers to believe the defendants would provide them with cash advances or loans, or general lines of credit. Instead of providing these services, the defendants debited consumers’ accounts for membership in a continuity program. Very few consumers used the program and many cancelled upon discovering their account had been debited by defendants. The continuity plans go under the names “Monster Rewards,” “Mongo,” and “Money on the Go.”
Based on this conduct, the FTC charged the defendants with violating the permanent injunction by making misrepresentations to consumers about their programs, by failing to make key disclosures, by failing to get express informed consent before debiting consumers’ accounts, and by failing to disclose clearly and promptly their programs during telemarketed solicitations. According to the FTC, through their deceptive actions, the defendants have netted over $9 million.
The civil contempt action was filed under seal in the U.S. District Court for the Middle District of Florida, Tampa Division on May 22, 2013, and unsealed by the Court on July 31, 2013. It names as defendants Bryon Wolf, Roy Eliasson, and Membership Services, LLC.
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