The Decline of The U.S. and the NYSE

-A +A
0

Just as the road to hell is paved with good intentions, the financial destruction of America was the unintended consequence of the inactions of people such as Mary Jo White.

[Column: Policing Wall Street]

 
Recently the Deutsche Borse made a takeover bid for the New York Stock Exchange that bastion of American capitalism and entrepreneurship.  But in reality the NYSE was the most prominent symbol of the “crony capitalism,” which has destroyed America.

This article is about the “tipping point” of the decline of the NYSE- and how the cover up of one scandal by the Department of Justice and the Securities and Exchange Commission led to the rapid decline of the NYSE. 

In 1998 William Killeen, Chief Executive Officer of Oakford Corp., and Thomas Bock, Chief Financial Officer of Oakford Corp., were indicted along with eight NYSE floor brokers for having New York Stock Exchange floor brokers trade illegally for accounts, which were maintained at Oakford Corp.

Spear Leeds and Kellogg, which was purchased by Goldman Sachs in 2000 for $6.5 billion, cleared all trades for Oakford and maintained all illegal trading accounts for Oakford.  Oakford Corp. paid SLK $10 million per annum in clearance costs and margin loans.  Only eight NYSE floor brokers were indicted by the United States Attorney.  Yet, the Office of the United States Attorney had in its possession Oakford’s trading records, which proved that in excess of 100 NYSE floor brokers had traded illegally for Oakford Corp. 

Upon his arrest William Killeen made a proffer Mary Jo White, the United States Attorney for the Southern District of New York in an attempt to avoid a prison term.  Killeen offered to provide information concerning illegal trading at Spear Leeds and Kellogg.  Killeen offered information that senior managing directors at Spear Leeds and Kellogg had assisted Oakford Corp. in establishing illegal trading accounts at Spear Leeds and Kellogg- and those senior managing directors of Spear Leeds and Kellogg had approved overnight loans of sums exceeding $30 million so that Oakford Corp. could continue its illegal trading.  Killeen was not alone in his proffer.  Edward Muegger, Michael Frayler and Angelo Meneghello also offered proof independently of Killeen that senior managing directors of Spear Leeds had known and had approved of Oakford’s illegal activities.

Killeen stated that Gary Frankel, a senior managing director, had arranged for Spear Leeds and Kellogg to lend Oakford as much as $30 million so that Oakford could meet its professional margin requirements.

Killeen stated that Harvey Silverman, the number two senior managing director of SLK after Peter Kellogg and a billionaire, had become enamored of the profits, which Oakford was earning, and had offered Killeen a partnership in SLK if Oakford would be taken over by SLK.  Killeen also told me that Silverman personally approved the loan of $30 million to finance Oakford’s trading.

Silverman had an even darker side.  Silverman was also a member of the Board of the American Stock Exchange and is a friend of Robert VanCaneghan, who admitted to the Board of Amex that he had sexually assaulted and raped his female employees. 

But as big as SLK was, Killeen had offered much more than SLK to the United States Attorney.  Killeen had also offered up Goldman Sachs, the annihilator of America and Western Europe, and Richard Grasso, Chairman of the New York Stock Exchange.

As recounted in “A Street Scandal That May Not Die,” which appeared in the 9 August 1999 issue of Business Week, Killeen recounted how he witnessed a Goldman Sachs floor broker trade the stock of Dayton Hudson for his illegal account at Goldman.  Contrary to the myth, which is perpetrated by the NYSE, there are no traders on the floor of the NYSE.  There are only floor brokers, who execute orders, and specialists, who are supposed to make markets in stocks.
 
And guess who not only signed in Killeen on the floor of the NYSE when Killeen witnessed this trade but also accompanied Killeen when he witnessed this illegal trade?  None other than Dick Grasso!  Yes that Dick Grasso whose greed destroyed the NYSE as a money-making machine.

But there is more- much more.  Killeen and other NYSE floor brokers told me that Grasso knew that Oakford was trading illegally.

Muegger, a personal friend of Grasso, told me that not only did Grasso know of the illegal trading of Oakford but that Muegger and Grasso had discussed the amount of money, which Muegger had earned trading for Oakford.

Killeen was willing to give up Grasso- he of the $190 million payday and the symbol of greed at the NYSE and halting the unbridled greed of Dick Grasso would have saved the NYSE.

Mary Jo White declined all proffers.  

Mary Jo White was never going to indict Dick Grasso, Chairman of the NYSE; the managing directors of Spear Leeds and Kellogg; and Goldman Sachs.  Why?  The reason is quite simple. What Wall Street brokerage firm would provide White’s law firm, Debevoise and Plimpton, with legal work if May Jo White had indicted Spear Leeds and Kellogg; Goldman Sachs; and Dick Grasso?

None.

So White made a conscious decision to permit the rot of Wall Street to continue.  And her decision ultimately destroyed the financial might of America.

It was White’s conscious decision to permit crime on Wall Street to fester that weakened the NYSE so badly that the Deutsche Borse has launched a takeover bid for the NYSE- because once criminals know that they can steal without punishment, they will steal with impunity and destroy all that is good in society.

America vanquished Japan and Germany in World War II. Honda, Nissan and Toyota conquered General Motors and Chrysler.

The Deutsche Borse has vanquished the New York Stock Exchange.

And China, the country which America saved from the atrocities of Japan during WWII, has the financial power to destroy the United States economically because of the vast amount of American government debt that it holds.

Just as the road to hell is paved with good intentions, the financial destruction of America was the unintended consequence of the inactions of people such as Mary Jo White. 



Manfredonia was a Wall Street trader who was banished after he became a whistleblower





Also Check Out...

MASQUERADE PARTIES AND NATIVITY
Politics As Usual
Politics As Usual
NYC Tests Mali Traveler For Ebola
It Never Gets Old
BRITS HONOR FIRST BLACK ARMY