NSA: Wall Street ready to trash criminal enterprises
Impeachment Triggered by Securities and Exchange Commission
If the government won't protect the Constitution, Wall Street is fully prepared to trash those who defy the law. Then the SEC and stock holders may discover during litigation who has been lying and violating the law.
It's going to be interesting to see which phone companies and other NSA contractors have their stocks deslisted from the NYSE for their alleged violations of their state charters.
The real mess may come when the securities litigation starts and the bankruptcy courts give the bad news to stock holders: The stock in that NSA contractor is worthless.
Caveat emptor !
Added: Monday, 15 May 2006: Verizon takes a hit. [ Comments Click ] Check the form 4s on the telcos [ Click ]
Verizon hit their peak in late 2005, just around the NYT article; [ Click ] while AT&T appears to have done the opposite, rising. [ Look at the time the affidavit was issued in re NARUS STA 6400 Click ]
AT&T had already started down years before the Narus revelations in the first week of April 2006. You can see in the last week of Feb 06, AT*T had high volume in a downdraft, but no comparitive volume in Dec05 when the NYT news came out.
The major problem facing the phone companies is that they cannot demonstrate they exercised their fiduciary duty in ensuring the request for information was lawful, consistent with FISA, or in compliance with the 4th Amendment.
Because other attorneys have arrived at another conclusion, no reasonable corporate officer can argue that it is a "clear case" that the data transfer was lawful. Rather, this is something that will have to be adjudicated by the court, and not something the President can merely assert as "OK."
Other comments.
One of the ideas of a civilized society is that the people move in a manner consistent with the rule of law.
One false notion going around is that because some commercial entity agrees to violate the law, then that means that individual citizens give up their Constitutional rights. [Ref]
The core problem the phone companies have is that they are not "all on the same sheet of music." Because one firm has opted out of the data-delivery requirement -- and apparently faced no legal consequence -- no claim can be made that the "national security"-argument is binding.
This never happened:
§ 322. Failure of corporation to obey order of court; appointment of receiver.
Whenever any corporation shall refuse, fail or neglect to obey any order or decree of any court of this State within the time fixed by the court for its observance, such refusal, failure or neglect shall be a sufficient ground for the appointment of a receiver of the corporation by the Court of Chancery . . .[ Ref ]
Rather, in light of the absence of lawful Federal Government action against Quest, the opposite is more likely: That the "cooperation" and "national security argument" were merely ruses to get what the government had no lawful authority to get: Access to information in violation of the FISA.
The claim that the records were turned over in a manner that is "consistent" with the customer service agreement is refutable and does not appear credible.
It is our view that these are no bonafide "national security support operations." Rather they are the opposite: Efforts to cooperate with an alleged criminal conspiracy to undermine the rule of law, destroy the Constitution, and otherwise support other to be understood illegal activity.
No court can recognize as legal any transfer of anything of value that was done under duress, threat, or promise of something in exchange for not going what one should do.
These are issues of fiduciary duty, not simply for the corporate attorneys, but also the corporate officers and members of the board of directors. They have a duty to investigate.
The core problem all the government attorneys and corporate officers -- but those on Quest -- have, is that they are not consistent with what some have freely chosen to do: Require the law to be followed. It seems fair to say that Quest took the right action; and in 2006 it is too late to argue that they did the "wrong" thing. Rather, they're still in business.
It would appear that the firms which refused to turn over the records well knew that the FISA and laws of the land applied: Thou shall get warrants. Here's sample language showing us that the incorporation statutes are directly linked with compliance with the law, fiduciary duties, and other lawful obligations under the US Code and Constitution:
§ 393. Rights, liabilities and duties under prior statutes.
All rights, privileges and immunities vested or accrued by and under any laws enacted prior to the adoption or amendment of this chapter, all suits pending, all rights of action conferred, and all duties, restrictions, liabilities and penalties imposed or required by and under laws enacted prior to the adoption or amendment of this chapter, shall not be impaired, diminished or affected by this chapter.Ref
Thus, any claim that Quest acted "improperly" is absurd. Rather, the DoJ attorneys and the White House have to explain why -- if their asserted "national security argument" is correct -- why they did not bring charges of sedition and treason against Quest. Again, the failure to timely act is clear evidence that the "national security argument" is not real, but fiction.
It is not a credible claim for anyone in the phone companies to argue they conduct their operations in "full compliance" with the law. If that were true, then Quest -- by doing the opposite -- should have been found to have violated the law. Again, this is fiction: There is no law that imposes any sanction on a company for refusing to cooperate with an alleged criminal conspiracy or other alleged violations of the Supreme Law of the Land: The US Constitution.
It remains to be understood whether an affirmative assertion of compliance is relied upon and result in financial losses. Rather, it appears as though the firms which have violated FISA and illegally provided data have committed alleged violations of the 1933/4 Acts, subject to SEC investigation, and NYSE delisting in re wire fraud, per rules 10b-5 and 15c1-2.
It remains to be understood which specific auditor reviewed these transactions -- if at all -- and how the "legal risk issues" were or were not communicated to the General Counsel and/or the Board of directors. Failure by an auditor to review these transactions could be an issue of audit malpractice for allegedly failing to discovery/report to the Commission illegal activity as required per GAAS.
Any claim that this activity is to 'defeat the enemy" are absurd. The primary objective of this activity -- if it were known -- is wholly at odds with any bonafide national security interest. Rather, the real objective appears to be to fumble around, create contracts, and shift work to the NSA contractors. The claim that this is to "fight some X-enemy" is at odds with the contrary action in Iraq which has refused to do just that.
It remains to be understood what the real objective of this illegal data mining is. In the absence of White House and DoJ cooperate, the courts could make adverse inferences:
The purpose of this note is not to argue that the rule of law is or is not a good thing; or that we should debate whether or not the Constitution should be protected. These are absolute assumptions which are at this basis of a civilized society.
Rather, this note merely calls into question the media for permitting these absurd promises to go unchallenged.
Bluntly, it doesn't matter what an attorney or commercial entity's legal argument is, the Constitution remains the law of the law. Whether that General Counsel is subsequently disbarred for failing to protect the Constitution is a matter for the state disciplinary board to review.
The way forward is to realize that American citizens -- yes, you reading this bog -- are going to have to stand tall, and start doing the media's job:
Some in the media have argued that if they ask the hard questions, then they’re going to be denied access.
Well, then make that the story, and make adverse judgments to the contrary.
Someone else -- like the FBI and/or the opposing counsel -- can find other ways to gather facts.
Your job is not to assent to this tyranny. Rather, your job is to inform the public what is going on.
Here's what's going on:
One of the core arguments of the phone companies is that they may violate the law in order to protect the Constitution. This asks us to accept that criminals are beating us to give us an education about the rude reality of life.
Rather, the way forward is to realize that "reality of life" is a choice to embrace the rule of law, not assent to non-sense.
The phone companies would have Americans believe that by violating the FISA, they are doing a good thing. Rather, the phone companies have shown that they are a threat to the Constitution; have ignored the law; and despite knowing the requirement to have valid warrants, ignored that law.
They are criminal enterprises.
IT remains to be understood to what extent the commercial entities were threatened with the loss of something valuable, or were induced to violate the law with something of value. These are not lawful agreements. Rather, they are extortionate methods to support other illegal activity by the White House, NSA, and others in the Departments of Justice and Defense.
The current amicus brief is a good start, and other effort is needed to quantify the Marbury v. Madison precedent which this President ignores. The President has no power to assert -- as he has done -- that something is or is not legal; that is the exclusive power of the courts.
Further, the amicus needs to discuss the illegal activity of those who physically transferred the funds from the government, through the NSA, into the contractors. Those financial officers who support this activity -- by continuing to provide funds through the NSA to the phone companies -- are personally liable.
It remains to be understood what legal fiction they have been inducted to accept, contrary to their statutory obligation to follow the law; or what threats or promises they have been subjected to in order to get them to assent to the conspiracy.
There is credible no basis to assert that because someone has chosen to ignore the law or violate the law that that action is a ratification of the illegal conduct.
Rather, once someone agrees to become a commercial firm -- as are the firms who work with the Federal government -- they agree to abide by the laws of the land.
Commercial entities are generally incorporated at the State level, and may be chartered overseas in other locations. The point is that all US firms which violate the US law -- in ignoring FISA, or providing something to the US government illegally -- have not simply committed a felony, but they have engaged in conduct contrary to their state charter.
Short version: They have subjected themselves to State-level review.
The way forward is to examine whether the state officials where these firms are incorporated swiftly move to review the state laws and examine whether they are still in compliance with their legal duties. AT risk are two broad things: Their ability to do business in the State; and their ability to remain listed on the NYSE.
In other words, these are issues of criminal law related to the State Securities laws; by association now the US Securities and Exchange Commission will have to review the matter.
Given the SEC is actually under direct control of the White House, it remains to be seen whether civil litigation against the firms -- not simply over the Constitutional rights under the existing litigation -- but in terms of a 1933/34 Act violation under the Private Securities Litigation Reform Act.
The PSLRA is a simple set of rules which tell the CEO and other corporate officers what they are supposed to do. If you'll recall, Jared Paul Stern formerly of the NY Post had a run in with an SEC-regulated officer, Mr. Burkle. Note closely that the CEO was wired and working closely with the FBI and US Attorney.
Make no mistake about what is happening. This is not a crisis. Rather, this is simply a broadening problem for the White House.
Each time they create an excuse, their defense because the reasonable basis to bring in other players into the arena.
Although the White House may -- as it has done with the DoJ OPR -- obstruct justice, the public's financial interests are now at stake. Yes, those pension funds which have invested in the firms which have violated the law are now at risk. They are not allowed to have their funds invested in entities that are below performance.
Going forward is remains to be seen how quickly the various financial entities are destroyed. Wall Street has little sympathy for facts. It merely moves without warning.
Within minutes, and entire business entity can be destroyed.
The White House argues it is for freedom, open markets, and a place to do business.
This White House will quickly realize how soon that dream may be realized.
Recall the lessons of 9-11. People had funds invested on the advance warning of what was going to happen.
Today, it is likely that there are members with inside knowledge who knew well that the various firms were subject to a liability. IT remains to be seen how many have improperly benefited because of this inside knowledge. A 1933/34 claim can succeed as it did with Martha Stewart if the court can be convinced that losses were improperly avoided.
Today, make no mistake the US is being run by criminals. At the same time, there are active market forces which are tearing at the companies which support this illegal activity.
There is nothing the CEOs of these firms can do to support their stock, other than spew forth more non-sense. The market will ultimately destroy those firms which refuse to comply with their state charters or the NYSE listing requirements.
This may take many years to sort out.
Know in the end, those who have abused power and have betrayed the public trust will ultimately be trashed in the financial markets.
Whether the public does or does not comprehend the abuse of power is not relevant. The point is to see that the White House and the corporations appear to be working hand in glove for one goal: To avoid financial losses.
It remains to be understood how many in the White House have trust funds with money in the very firms which agreed to cooperate with this illegal activity. In the end, they will be exposed not because the White House cooperates, but because Wall Street is the fastest way to communicate the bad news.
If the rule of law does not prevail, the US financial markets will be trashed. You can kiss your pensions goodbye, and you will have to go back to work doing things you hoped you could avoid.
This could have been avoided. Had you simply focused on facts, the law, and done the "right thing," you might have made good decisions. Rather, because you were lazy and wanted a free ride, you hoped your friends in the White House would protect you.
In the end, the joke is on you. Because you wanted something -- that the White House showed it could not provide, security -- you gave up your freedom, your mind, and your power.
This White House has betrayed your trust. There is a rush for the exits. Those who are about to learn the most are the ones who are most supportive of the illegal activity.
Their lives are about to be turned upside down. Not because of a physical threat, but because they are about to learn the hard way: Wall Street has no patience for those who cross the line.
It's only going to get worse: Cover-ups, lying over the summer, and pretending things aren't a problem. Watch your state officials. The same ones who blindly support the White House are the ones who will -- through their inaction -- send a green light for more abuse of power.
They are not asserting their oath. Rather, they are turning a blind eye to real financial risks. In all likelihood, they've privately taken action to protect themselves, all the while publicly asserting that things are "just fine" or "no problem."
Ken Lay at Enron showed us what could actually be going on.
Is it going to be a real mess? We'll see. In order to clean up a mess you need to have people who are willing to notice the mess.
Americans are willing to embrace non-sense, all the while believing their "go along, to get along"-attitude is going to save them.
Wall Street loves suckers like you. You're going to get trashed.
Then it will get nasty.
The rush for the exits has started.
If you're reading this, you're too late.
posted by Constant @ 10:44 AM
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