Ex-HSBC Trader Involved In Front-Running Scandal To Be Extradited To U.S.

It"s not shaping up to be a great week for a group of former HSBC FX traders who decided to front-run a massive $3.5 billion currency trade placed by one of their clients and net their bank some $8 million in illicit profits in the process.  Earlier this week, Ex-HSBC currency trader Mark Johnson, who was unwittingly captured on an audio recording saying "I think we got away with it," was convicted by a jury in New York of fraud. 

Now we learn that Johnson"s partner in crime (allegedly, of course), Stuart Scott, has lost his court battle in the U.K. and will be extradited to the U.S. to face charges.

Not surprisingly, Scott expressed some "disappointment" with the ruling shortly after being dismissed from court.

*SCOTT SAYS HE IS DISAPPOINTED BY EXTRADITION RULING

*SCOTT SAYS U.S. CASE IS FLAWED, INACCURATE

As we"ve noted previously, Mark Johnson was arrested at New York’s Kennedy Airport in 2016 before he could return to the U.K. but Stuart Scott has remained free at his home in the London suburbs...until now.  Per Bloomberg:

Mark Johnson, HSBC’s global head of foreign exchange cash trading in London, was taken into custody at John F. Kennedy International Airport Tuesday and is scheduled to appear before a judge in federal court in Brooklyn Wednesday morning, said the people, who asked not to be named because the case hasn’t been made public. He’s charged with conspiracy to commit wire fraud, the people said.

 

According to Bloomberg, Johnson’s arrest comes more than a year after five global banks pleaded guilty to charges related to the rigging of currency benchmarks. HSBC, which wasn’t part of those criminal cases, in November 2014 agreed to pay $618 million in penalties to U.S. and British regulators to resolve currency manipulation allegations. HSBC, which still faces investigations by the Justice Department and other authorities for the conduct, has set aside $1.3 billion for possible settlements, according to an August filing.

 

Rob Sherman, an HSBC spokesman, and Peter Carr, a Justice Department spokesman, declined to comment.

A few weeks ago, details of court filings began to leak from Scott"s British extradition case which allowed us to learn exactly how much each HSBC trader made for his trading book in the illicit scheme that netted a total of $8 million in profits...Scott took second place with a total profit of $585,105.  Per Bloomberg:

"The defendant personally obtained over $500,000 profit," the U.S. Justice Department, represented by British lawyer Mark Summers, said in written arguments prepared for the hearing. "The offenses of which he is accused are highly serious. They involve a systematic and organized conspiracy to defraud, committed in breach of trust."

 

Scott was charged, along with his ex-boss Mark Johnson, by the Justice Department in July 2016 with using insider knowledge to front-run a $3.5 billion currency deal by Cairn Energy Plc that made the bank $8 million. Johnson is on trial in New York and a jury there could begin deliberations this week.

Here"s how everyone else made out per the DOJ:

For those who haven"t followed the story closely, according to the original DOJ complaint, HSBC was selected by Cairn Energy Plc to execute a foreign exchange transaction – which was going to require converting approximately $3.5 billion in sales proceeds into British Pound Sterling – in October 2011.  But, before executing that trade, he tipped off a bunch of HSBC traders who loaded up their proprietary accounts with Pounds just before the massive trade sent the currency higher.

“As alleged, the defendants placed personal and company profits ahead of their duties of trust and confidentiality owed to their client, and in doing so, defrauded their client of millions of dollars,” stated United States Attorney Capers.  “When questioned by their client about the higher price paid for their significant transaction, the defendants wove a web of lies designed to conceal the truth and divert attention away from their fraudulent trades.  The charges and arrest announced today reflect our steadfast commitment to hold accountable corporate executives and licensed professionals who use their positions to fraudulently enrich themselves.”

 

“The defendants allegedly betrayed their client’s confidence, and corruptly manipulated the foreign exchange market to benefit themselves and their bank,” said Assistant Attorney General Caldwell.  “This case demonstrates the Criminal Division’s commitment to hold corporate executives, including at the world’s largest and most sophisticated institutions, responsible for their crimes.”

Of course, we"re sure this is all just an effort to "criminalize behavior that is normal"...at least on Wall Street. 

Ex-HSBC Currency Trader Convicted Of Fraud In Massive Front-Running Scandal

Ex-HSBC currency trader Mark Johnson, who was unwittingly captured on an audio recording saying "I think we got away with it," has just been convicted by a jury in New York of fraud for front-running a $3.5 billion transaction that netted his firm some $8 million in illicit profits.  Per Bloomberg:

Former HSBC Holdings Plc currency trader Mark Johnson was found guilty of fraud for front-running a $3.5 billion client order, a victory for U.S. prosecutors as they seek to root out misconduct in global financial markets.

 

He was convicted on Monday after a month-long trial in Brooklyn, New York.

 

Johnson was the first person to be tried since the global currency-rigging scandal that resulted in global banks paying more the $10 billion in penalties. The charges stemmed from HSBC’s execution of a trading order from Cairn Energy Plc in 2011 to convert the proceeds of a unit sale from dollars into pounds.

 

"This sends a signal to traders and banks that this type of behavior is absolutely inappropriate and will be pursued by the government," Michael Weinstein, a former Justice Department trial attorney, said. "That’s a big hammer over the banks -- it may force them to monitor and self-regulate their people."

For those who haven"t followed this particular story, Mark Johnson was arrested at New York’s Kennedy Airport in 2016 before he could return to the U.K. following a nearly 3-year investigation into efforts on the part of several large investment banks to rig FX markets but Stuart Scott has remained free at his home in the London suburbs pending the outcome of the extradition proceedings.  Per Bloomberg:

Mark Johnson, HSBC’s global head of foreign exchange cash trading in London, was taken into custody at John F. Kennedy International Airport Tuesday and is scheduled to appear before a judge in federal court in Brooklyn Wednesday morning, said the people, who asked not to be named because the case hasn’t been made public. He’s charged with conspiracy to commit wire fraud, the people said.

 

According to Bloomberg, Johnson’s arrest comes more than a year after five global banks pleaded guilty to charges related to the rigging of currency benchmarks. HSBC, which wasn’t part of those criminal cases, in November 2014 agreed to pay $618 million in penalties to U.S. and British regulators to resolve currency manipulation allegations. HSBC, which still faces investigations by the Justice Department and other authorities for the conduct, has set aside $1.3 billion for possible settlements, according to an August filing.

 

Rob Sherman, an HSBC spokesman, and Peter Carr, a Justice Department spokesman, declined to comment.

According to the original DOJ complaint, HSBC was selected by Cairn Energy Plc to execute a foreign exchange transaction – which was going to require converting approximately $3.5 billion in sales proceeds into British Pound Sterling – in October 2011.  But, before executing that trade, he tipped off a bunch of HSBC traders who loaded up their proprietary accounts with Pounds just before the massive trade sent the currency higher.

“As alleged, the defendants placed personal and company profits ahead of their duties of trust and confidentiality owed to their client, and in doing so, defrauded their client of millions of dollars,” stated United States Attorney Capers.  “When questioned by their client about the higher price paid for their significant transaction, the defendants wove a web of lies designed to conceal the truth and divert attention away from their fraudulent trades.  The charges and arrest announced today reflect our steadfast commitment to hold accountable corporate executives and licensed professionals who use their positions to fraudulently enrich themselves.”

 

“The defendants allegedly betrayed their client’s confidence, and corruptly manipulated the foreign exchange market to benefit themselves and their bank,” said Assistant Attorney General Caldwell.  “This case demonstrates the Criminal Division’s commitment to hold corporate executives, including at the world’s largest and most sophisticated institutions, responsible for their crimes.”

As we"ve noted over the past couple of weeks, tidbits of the prosecution"s case has made it"s way into the media recently, including reports last week that Johnson used the code phrase "my watch is off" to trigger trading by HSBC traders all around the globe.  Meanwhile, as Law360 recently pointed out, jurors also had the opportunity to hear some rather damning recordings of Johnson"s phone conversations with traders, including the one below in which he says "I think we got away with it."

Prosecutors played a recording of a call between Johnson and Stuart after the 3 p.m. fix as they debrief, with Johnson telling Stuart, “I think we got away with it,” but Stuart replies that HSBC executive Dipak Khot — who acted as the go between with Cairn and HSBC — thinks otherwise and suspects that Cairn will protest.

 

Johnson in turn argued that Cairn is still in a better position than it would have been if it had taken any other offers to execute the deal in alternate methods as opposed to the fix. “They don’t really have a lot of room to complain,” he said on the call.

 

But as Cahill was trading ahead of the 3 p.m. fix on the day of the transaction, Johnson sounded more concerned about “ramping it up” too much. Jurors heard another recording of a call between Johnson and Scott, with Scott talking to Cahill in the background as he trades, in which Johnson cautions against spiking the price of sterling too high out of concern that Cairn will "squeal."

 

“Frank, Frank if it rates above 30 at the fix, I think they’ll start to ah ... if you need to buy them, obviously, but ideally don’t ramp it above 30,” Scott tells Cahill. “Do what you need to do, but ... sorry I know I’m probably not helping much...I’ll leave you alone.”

 

“Is he getting a bit tetchy?” Johnson asks.

 

“No, he’s not,” Scott replies.

 

“He can’t, fucking moaning bastard,” Johnson said. “I do all the work and he gets all the glory.”

 

Jurors heard that days later in a call with HSBC forex trader Ed Carmichael in Hong Kong, Johnson told him that HSBC’s London forex trading desk, “just had a bonanza” on the Cairn deal, and described his response when Cairn sought an explanation on the less than stellar result for the oil and gas developer.

Of course, when HSBC"s client complained about their less than stellar execution price, Johnson admits that he blamed all the usual suspects: "Russians, other central banks, all that sort of stuff."

“And they said, well you know it jumped up a bit, who else was buying? And we said the usual Russian names, other central banks, all that sort of stuff,” Johnson said on the call.

As we noted last week, nearly a dozen HSBC traders around the globe netted over $8 million in profits by allegedly front-running their own client.

Of course, while the DOJ will undoubtedly celebrate their conviction in the media, there is little doubt that Mark Johnson"s "pre-hedging" scandal is hardly unique for an industry that has been built on front-running clients.

"I Think We Got Away With It": HSBC Trader"s Fate Left To Jurors After Damning Phone Recordings Revealed

After weeks of testimony, the fate of former HSBC trader Mark Johnson, who stands accused of orchestrating a massive international front-running scheme that netted his firm over $8 million in illicit profits, has been left in the hands jurors.

Over the past couple of weeks, tidbits of the prosecution"s case has made it"s way into the media, including reports last week that Johnson used the code phrase "my watch is off" to trigger trading by HSBC traders all around the globe.  Meanwhile, as Law360 recently pointed out, jurors also had the opportunity to hear some rather damning recordings of Johnson"s phone conversations with traders, including the one below in which he says "I think we got away with it."

Prosecutors played a recording of a call between Johnson and Stuart after the 3 p.m. fix as they debrief, with Johnson telling Stuart, “I think we got away with it,” but Stuart replies that HSBC executive Dipak Khot — who acted as the go between with Cairn and HSBC — thinks otherwise and suspects that Cairn will protest.

 

Johnson in turn argued that Cairn is still in a better position than it would have been if it had taken any other offers to execute the deal in alternate methods as opposed to the fix. “They don’t really have a lot of room to complain,” he said on the call.

 

But as Cahill was trading ahead of the 3 p.m. fix on the day of the transaction, Johnson sounded more concerned about “ramping it up” too much. Jurors heard another recording of a call between Johnson and Scott, with Scott talking to Cahill in the background as he trades, in which Johnson cautions against spiking the price of sterling too high out of concern that Cairn will "squeal."

 

“Frank, Frank if it rates above 30 at the fix, I think they’ll start to ah ... if you need to buy them, obviously, but ideally don’t ramp it above 30,” Scott tells Cahill. “Do what you need to do, but ... sorry I know I’m probably not helping much...I’ll leave you alone.”

 

“Is he getting a bit tetchy?” Johnson asks.

 

“No, he’s not,” Scott replies.

 

“He can’t, fucking moaning bastard,” Johnson said. “I do all the work and he gets all the glory.”

 

Jurors heard that days later in a call with HSBC forex trader Ed Carmichael in Hong Kong, Johnson told him that HSBC’s London forex trading desk, “just had a bonanza” on the Cairn deal, and described his response when Cairn sought an explanation on the less than stellar result for the oil and gas developer.

Of course, when HSBC"s client complained about their less than stellar execution price, Johnson admits that he blamed all the usual suspects: "Russians, other central banks, all that sort of stuff."

“And they said, well you know it jumped up a bit, who else was buying? And we said the usual Russian names, other central banks, all that sort of stuff,” Johnson said on the call.

For those who haven"t followed this particular story, Mark Johnson was arrested at New York’s Kennedy Airport in 2016 before he could return to the U.K. following a nearly 3-year investigation into efforts on the part of several large investment banks to rig FX markets but Stuart Scott has remained free at his home in the London suburbs pending the outcome of the extradition proceedings.  Per Bloomberg:

Mark Johnson, HSBC’s global head of foreign exchange cash trading in London, was taken into custody at John F. Kennedy International Airport Tuesday and is scheduled to appear before a judge in federal court in Brooklyn Wednesday morning, said the people, who asked not to be named because the case hasn’t been made public. He’s charged with conspiracy to commit wire fraud, the people said.

 

According to Bloomberg, Johnson’s arrest comes more than a year after five global banks pleaded guilty to charges related to the rigging of currency benchmarks. HSBC, which wasn’t part of those criminal cases, in November 2014 agreed to pay $618 million in penalties to U.S. and British regulators to resolve currency manipulation allegations. HSBC, which still faces investigations by the Justice Department and other authorities for the conduct, has set aside $1.3 billion for possible settlements, according to an August filing.

 

Rob Sherman, an HSBC spokesman, and Peter Carr, a Justice Department spokesman, declined to comment.

According to the original DOJ complaint, HSBC was selected by Cairn Energy Plc to execute a foreign exchange transaction – which was going to require converting approximately $3.5 billion in sales proceeds into British Pound Sterling – in October 2011.  But, before executing that trade, he tipped off a bunch of HSBC traders who loaded up their proprietary accounts with Pounds just before the massive trade sent the currency higher.

“As alleged, the defendants placed personal and company profits ahead of their duties of trust and confidentiality owed to their client, and in doing so, defrauded their client of millions of dollars,” stated United States Attorney Capers.  “When questioned by their client about the higher price paid for their significant transaction, the defendants wove a web of lies designed to conceal the truth and divert attention away from their fraudulent trades.  The charges and arrest announced today reflect our steadfast commitment to hold accountable corporate executives and licensed professionals who use their positions to fraudulently enrich themselves.”

 

“The defendants allegedly betrayed their client’s confidence, and corruptly manipulated the foreign exchange market to benefit themselves and their bank,” said Assistant Attorney General Caldwell.  “This case demonstrates the Criminal Division’s commitment to hold corporate executives, including at the world’s largest and most sophisticated institutions, responsible for their crimes.”

As we noted last week, nearly a dozen HSBC traders around the globe netted over $8 million in profits by allegedly front-running their own client.

Of course, Johnson would like for you to know that this entire case is just "much ado about nothing" as he never intended to "front-run" his client but rather was just engaging in some innocent "pre-hedging"...which is a new term for us...must be a technical term only used by European FX traders.

FBI General Counsel Reportedly Under Investigation For Leaks To Mainstream Media

Authored by Sara Carter via Circa.com,

FBI General Counsel James A. Baker is purportedly under a Department of Justice criminal investigation for allegedly leaking classified national security information to the media, according to multiple government officials close to the probe who spoke with Circa on the condition of anonymity.

This comes as Department of Justice Attorney General Jeff Sessions said he would soon be making an announcement regarding the progress of leak investigations. A DOJ official declined to comment on Circa’s inquiry into Baker but did say, the planned announcement by Sessions is part of the overall "stepped up efforts on leak investigations."

Three sources, with knowledge of the investigation, told Circa that Baker is the top suspect in an ongoing leak investigation, but Circa has not been able to confirm the details of what national security information or material was allegedly leaked.

A federal law enforcement official with knowledge of ongoing internal investigations in the bureau told Circa, "the bureau is scouring for leakers and there"s been a lot of investigations."

The revelation comes as the Trump administration has ramped up efforts to contain leaks both within the White House and within its own national security apparatus.

Baker is a close confidant of former FBI Director James Comey, and recent media reports suggested he was reportedly advising the then-FBI director on legal matters following private meetings the former director had in February with President Trump in the Oval Office.

Baker was appointed to the FBI"s general counsel by Comey in 2014 and has had a long and distinguished history within the intelligence community.

After working as a federal prosecutor in the Criminal Division of the Department of Justice during the 1990s, he joined the Office of Intelligence Policy and Review In 1996, according to his FBI bio. (https://archives.fbi.gov/archives/news/pressrel/press-releases/james-a.-baker-appointed-as-fbis-general-counsel).

In 2006 Baker received the George H.W. Bush Award for Excellence in counter-terrorism—the CIA’s highest counter-terrorism award, according to his biography. During Baker"s long and distinguished career he received the "NSA’s Intelligence Under Law Award; the NSA Director’s Distinguished Service Medal; and DOJ’s highest award— the Edmund J. Randolph Award."

He is a fellow at the Institute of Politics at the John F. Kennedy School of Government at Harvard University and a lecturer at Harvard Law School.

FBI spokeswoman Carol Cratty said the bureau would not comment on Baker and would not confirm or deny any investigation.

Alan Dershowitz Slams New York Times For Trump Jr. "Treason" Claims

Over the past couple of days, the emergence of details regarding Trump Jr."s meeting with the Russian-born lawyer Natalia Veselnitskaya has prompted a return of the Trump-Russia mass hysteria on the part of the mainstream media and the left. Hillary Clinton"s former running mate, Tim Kaine, even went so far as to refer to Don Jr."s meeting as "treasonous."

Tim Kaine: “potentially treason” in Russia investigation (via @kasie) pic.twitter.com/Cp5aUp9tsI

— Bradd Jaffy (@BraddJaffy) July 11, 2017

Meanwhile, the New York Times published an op-ed detailing how treason statutes could potentially be adapted for the sole purpose of incriminating Don Jr. for taking the meeting with Veselnitskaya.

Although we do not yet have enough facts to judge, Donald Jr. and others may also be liable for conspiracy with respect to espionage, depending on how any illicit information was obtained and the level of their awareness of any spying. Because the Russian campaign that followed was nothing less than an assault on our democracy, we understand why some are raising issues of treason as well. Prosecution under the federal treason statute is ultimately unlikely because we are not at war with Russia. But during the Cold War, treasonous conduct was often prosecuted under other statutes. (Alger Hiss was sentenced to four years in prison for “forgetting” in sworn testimony that he had met with Whitaker Chambers, an American working for the Russians.)

But former Harvard Law Professor, Alan Dershowitz, a constant voice of reason throughout the post-election hysteria, says all of the discussion of "treason" on the left is nothing more than wishful thinking.  As Dershowitz reasonably points out, while the act of actually stealing or hacking information is illegal, "seeking to obtain the work product of a prior hack would be no more criminal than a newspaper publishing the work product of thefts such as the Pentagon Papers and the material stolen by Snowden and Manning."

Obviously if anyone conspired in advance with another to commit a crime – such as hacking the DNC – that would be criminal. But merely seeking to obtain the work product of a prior hack would be no more criminal than a newspaper publishing the work product of thefts such as the Pentagon Papers and the material stolen by Snowden and Manning.   Moreover, the emails sent to Trump Jr. say that the dirt peddled by Veselnitskaya came from “official documents.”  No mention is made of hacking or other illegal activities. So it is unlikely that attendance at the meeting violated any criminal statute.

Meanwhile, regarding all those "collusion" claims, Dershowitz points out that while the act of "colluding" with a foreign government maybe should be made illegal in the future, it is not currently a crime under existing laws....so tough luck there too.

Whether or not such collusion, if it occurred, is a crime, it is clear that the American people have the right to know whether any sort of collusion –legal or illegal – took place.  And, if so, what was its nature.

The Mueller investigation is limited to possible criminal activity.  Probing the moral, political or other non-criminal implications of collusion with, or interference by, Russia is beyond the jurisdiction of the special counsel.  It is the role of Congress, not the Criminal Division of the Justice Department, to make changes in existing laws.  Perhaps mere collusion by a campaign with a foreign government should be made a crime, so as to prevent future contamination of our elections.  But it is not currently a crime.

Nor will it be easy to draft a criminal statute prohibiting a campaign from using material provided by a foreign power, without trenching on the constitutional rights of candidates.  But this is all up to Congress and the courts, not the special counsel, with his limited jurisdiction.

And here is the full interview with Dershowitz from earlier today:

Stockman Warns "A Great Big Coup Is On The Way"

Submitted by David Stockman via The Daily Reckoning,

So let’s start with an obvious point about the whole Russia fiasco…

Namely, there is no “there, there.” First off, the president has the power to declassify secret documents at will. But in this instance he could also do that without compromising intelligence community (IC) “sources and methods” in the slightest.

That’s because after Edward Snowden’s revelations in 2013, the whole world was put on notice — and most especially Washington’s adversaries — that it collects every single electronic digit that passes through the worldwide web and related communications grids.

Washington essentially has universal and omniscient SIGINT (signals intelligence). Acknowledging that fact by publishing the Russia-Trump intercepts would provide new knowledge to exactly no one.

Nor would it jeopardize the lives of any American spy or agent (HUMINT). It would just document the unconstitutional interference in the election process that had been committed by the U.S. intelligence agencies and political operatives in the Obama White House.

That pales compared to whatever noise comes out of Langley (CIA) and Ft. Meade (NSA). And I do mean noise.

Yes, I can hear the boxes on the CNN screen harrumphing that declassifying the “evidence” would amount to obstruction of justice! That is, since Trump’s “crime” is a given (i.e. his occupancy of the Oval Office), anything that gets in the way of his conviction and removal therefrom amounts to “obstruction.”

Given that he is up against a Deep State/Democratic/Neoconservative/mainstream media prosecution, the Donald has no chance of survival short of an aggressive offensive of the type I just described.

But that’s not happening because the man is clueless about what he is doing in the White House. And he’s being advised by a cacophonous coterie of amateurs and nincompoops. So he has no action plan except to impulsively reach for his Twitter account.

That became more than evident — and more than pathetic, too — when he tweeted out an attack on his own Deputy Attorney General, Rod Rosenstein. At least Nixon fired Elliot Richardson (his Attorney General) and Bill Ruckelshaus (Deputy AG):

I am being investigated for firing the FBI Director by the man who told me to fire the FBI Director! Witch Hunt.

Alone with his Twitter account, clueless advisors and pulsating rage, the Donald is instead laying the groundwork for his own demise. Were this not the White House, this would normally be the point at which they send in the men in white coats with a straight jacket.

Indeed, that’s essentially what the Donald’s so-called GOP allies on the Hill are actually doing.

RussiaGate is a witch hunt like few others in American political history. Yet as the mainstream cameras and microphones were thrust at one Congressional Republican after another following the Donald’s outburst quoted above, there was nary an echo of agreement.

Even Senator John Thune, an ostensible Swamp-hating conservative, had nothing but praise for Special Counsel Robert Mueller, that he would fairly and thoroughly get to the bottom of the matter.

No he won’t!

Mueller is a card-carrying member of the Deep State who was there at the founding of today’s surveillance monster as FBI Director following 9/11. Since the whole $75 billion apparatus that eventually emerged was based on an exaggerated threat of global Islamic terrorism, Russia had to be demonized into order to keep the game going — a transition that Mueller fully subscribed to.

So he will “find” extensive Russian interference in the 2016 election and bring the hammer down on the Donald for seeking to prevent it from coming to light. The clock is now ticking. And his investigatory team is being packed with prosecutorial killers with proven records of thuggery. They’re determined to find crimes that create fame and fortune for prosecutors — even if the crime itself never happened.

For example, Mueller’s #1 hire was the despicable Andrew Weissmann. This character had led the fraud section of the department’s Criminal Division and served as general counsel to the F.B.I. when Mueller was its director. And more importantly, Weissmann was the driving force behind the Enron task force — the most egregious exercise in prosecutorial abuse and thuggery in 100 years.

Meanwhile, the GOP leadership could not be clearer about what is coming down the pike.

They are not defending Trump with even a hint of the vigor and resolve that I recall from the early days of Tricky Dick Nixon’s ordeal. Of course, Nixon didn’t survive anyway.

Instead, it’s as if Paul Ryan, Mitch McConnell, et al. have offered to hold his coat, while the Donald pummels himself with a 140-character Twitter Knife that is visible to the entire world.

So there should be no doubt. A Great Big Coup is on the way.

But here’s the irony of the matter: Exactly four years ago in June 2013 no one was seriously demonizing Putin or Russia. In fact, the slicksters of CNN were still snickering about Mitt Romney’s silly claim during the 2012 election campaign that Russia was the greatest security threat facing America.

But then came the Syrian jihadist false flag chemical attack in the suburbs of Damascus in August 2013 and the U.S. intelligence community’s flagrant lie that it had proof the villain was Bashar Assad.

To the contrary, it subsequently became evident that the primitive rockets that had carried the deadly sarin gas, which killed upwards of 1500 innocent civilians, could not have been fired from regime held territory. The rockets examined by UN investigators had a range of only a few kilometers, not the 15-20 kilometers from the nearest Syrian base.

In any event, President Obama chose to ignore his own red line and called off the bombers. That in turn paved the way for Vladimir Putin to persuade Assad to give up all of his chemical weapons — a commitment he fully complied with over the course of the next year.

Needless to say, in the eyes of the neocon War Party, this constructive act of international statesmanship by Putin was the unforgivable sin. It thwarted the next target on their regime change agenda — removal of the Assad government in Syria as a step toward an ultimate attack on its ally, the Shiite regime of Iran.

So it did not take long for the Deep State to retaliate. While Putin was basking in the glory of the 2014 winter Olympics at Sochi, the entire apparatus of Imperial Washington — the CIA, the National Endowment for Democracy, the State Department and a long string of Washington funded NGOs — was on the ground in Kiev assisting the putsch that overthrew Ukraine’s constitutionally elected President and Russian ally.

From there, the Ukrainian civil war and partition of Crimea inexorably followed, as did the escalating campaign against Russia and its leader.

So as it turned out, the War Party could not have planned a better outcome — especially after Russia moved to protect its legitimate interests in its own backyard resulting from the Washington-instigated civil war in Ukraine. That included protecting its 200-year old naval base at Sevastopol in Crimea.

The War Party simply characterized these actions falsely as acts of aggression against Russia’s European neighbors.

There is nothing like a demonized enemy to keep the $700 billion national security budget flowing and the hideous Warfare State opulence of the Imperial City intact. So why not throw in an allegedly “stolen” U.S. election to garnish the case?

In a word, the Little Putsch in Kiev is now begetting a Great Big Coup in the Imperial City.

This is a history-shattering development, but don’t tell the boys and girls and robo-machines on Wall Street.

Pathetically, they still think it’s game on.

So if there was ever a time to take advantage of the day traders and robo-machines which linger in the casino, now would be the occasion to sell, sell, sell. Once the breakdown starts there will be no respite from the implosion.

Trump Wants "Fast Decision" On Comey Replacement - Here Are The 11 Candidates

Donald Trump said he expects to make a "fast decision" on a replacement for fired FBI Director James Comey, perhaps before he departs the U.S. on May 19 for his first foreign trip as president. Trump said the candidates under consideration to lead the FBI - White House officials have identified 11 of them so far - are "outstanding people." He said most are "very well known" and of the "highest level."

As Bloomberg reports, the 11 candidates under consideration as a permanent replacement for Comey:

SEN. JOHN CORNYN

Cornyn is the No. 2 Senate Republican and a former Texas attorney general and state Supreme Court justice. He has been a member of the Senate GOP leadership team for a decade and serves on the Senate Judiciary Committee. In the aftermath of Comey"s dismissal, Cornyn said Trump was "within his authority" to fire him and said it would not affect the investigation of possible Russian ties to Trump"s presidential campaign.

REP. TREY GOWDY

The South Carolina Republican is best known for leading the congressional inquiry into the deadly attacks on a U.S. facility in Benghazi, Libya, a panel that oversaw a lengthy grilling of Hillary Clinton in 2015. A former federal prosecutor and state attorney, Gowdy was elected to Congress in the 2010 tea party wave and has focused on law enforcement issues. He originally endorsed Florida Sen. Marco Rubio for president before backing Trump in May 2016.

FORMER REP. MIKE ROGERS

Rogers is the former chairman of the House Intelligence Committee. He served Michigan in Congress for more than a decade before stepping down in 2015. Rogers worked for the FBI as a special agent based in Chicago in the 1990s and briefly advised Trump"s transition team on national security issues. His name was floated as a possible replacement for then-FBI Director Robert Mueller in 2013, and he received support from an association of FBI agents before President Barack Obama chose Comey.

RAY KELLY

Kelly was commissioner of the New York City Police Department for more than a decade, serving two mayors. In the aftermath of the 9/11 attacks, he created the first counterterrorism bureau of any municipal police department and oversaw a drastic reduction in crime. But Kelly also came under fire for his use of aggressive police tactics, including a program that spied on Muslims and a dramatic spike in the use of stop-and-frisk, which disproportionately affected non-white New Yorkers.

J. MICHAEL LUTTIG

Luttig, the general counsel for Boeing Corp., is viewed as a conservative legal powerhouse from his tenure as a judge on the 4th Circuit U.S. Court of Appeals and his time as a Justice Department lawyer. He was considered for two U.S. Supreme Court vacancies that went to Chief Justice John Roberts and Justice Samuel Alito. Luttig clashed with the Bush White House on a prominent terror case, rebuking the administration for its actions in the case involving "enemy combatant" Jose Padilla.

LARRY THOMPSON

A deputy attorney general under President George W. Bush, Thompson served as the department"s No. 2 from 2001 to 2003. Among his most high-profile actions was allowing Syrian-born Canadian citizen Maher Arar to be deported to Syria, where he was tortured, after being falsely named as a terrorist. Thompson also served as U.S. attorney for the Northern District of Georgia and held several high-level positions at PepsiCo.

PAUL ABBATE

Abbate is a senior official at the FBI, currently responsible for the bureau"s criminal and cyber branch. He previously led FBI field offices in Washington, one of the agency"s largest, and in Detroit. He"s been deeply involved for years in FBI efforts to fight terrorism, serving in supervisory roles in Iraq and Afghanistan and later overseeing FBI international terrorism investigations as a section chief. He"s been with the FBI for more than 20 years, and is one of the FBI officials who interviewed this week for the role of interim director.

ALICE FISHER

Currently a partner at the law firm Latham & Watkins specializing in white-collar criminal and internal investigations, Fisher formerly served as assistant attorney general for the Criminal Division of the Justice Department. Fisher faced resistance from Democrats during her confirmation over her alleged participation in discussions about detention policies at the Guantanamo Bay facility in Cuba. She also served as deputy special counsel to the Senate special committee that investigated President Bill Clinton"s Whitewater scandal. If selected, she would be the bureau"s first female director.

ANDREW MCCABE

A Duke-educated lawyer, McCabe was named last year as the FBI"s deputy director, the No. 2 position in the bureau, overseeing significant investigations and operations. Since joining the FBI more than 20 years ago, he"s held multiple leadership positions, including overseeing the FBI"s national security branch and its Washington field office. McCabe became acting director after Comey was fired, but has shown a repeated willingness to break from White House explanations of the ouster and its characterizations of the Russia investigation.

MICHAEL GARCIA

A former New York prosecutor, Garcia has served as an associate judge on the New York Court of Appeals — the state"s highest court — since early 2016. He served as the U.S. attorney in Manhattan from 2005 to 2008, and previously held high-level positions in the Commerce Department, the Justice Department and the Department of Homeland Security.

JOHN SUTHERS

A former U.S. attorney and Colorado attorney general, Suthers was elected mayor of Colorado Springs in 2015. He is widely respected among state law enforcement and many Colorado Democrats. Suthers was inspired to become a prosecutor after he spent part of an internship in the Colorado Springs district attorney"s office watching the trial of a gang of soldiers convicted of killing various citizens, including actor Kelsey Grammer"s sister, during a crime spree in the 1970s.

Four candidates - Texas Sen. John Cornyn, acting FBI Director Andrew McCabe, attorney Alice Fisher and judge Michael Garcia - have interviews scheduled Saturday.

Right now, John Cornyn is the front-runner at the bookies (but marginally)...

Mary Jo White Seriously Misled The US Senate To Become SEC Chair

Submitted by Pam Martens and Russ Martens via WallStreetOnParade.com,

Less than two weeks after Mary Jo White was nominated to become Chair of the Securities and Exchange Commission by President Barack Obama on January 24, 2013, White filed an ethics disclosure letter advising that she would “retire” from her position representing Wall Street banks at the law firm Debevoise & Plimpton. White wrote on this subject in great detail, stating:

“Upon confirmation, I will retire from the partnership of Debevoise & Plimpton, LLP. Following my retirement, the law firm will not owe me an outstanding partnership share for either 2012 or any part of 2013. As a retired partner, I will be entitled to the use of secretarial services, office space and a blackberry at the firm’s expense. For the duration of my appointment, I will forgo these three benefits, though I may pay for some secretarial services at my own expense. Pursuant to the Debevoise & Plimpton, LLP Partners Retirement Program, I will receive monthly lifetime retirement payments from the firm commencing the month after my retirement. However, within 60 days of my appointment, the firm will make a lump sum payment, in lieu of making monthly retirement payments for the next four years. Within 60 days of my appointment, I also will receive payouts of my interest in the Debevoise & Plimpton LLP Cash Balance Retirement plan and my capital account.”

Yesterday it was widely reported in the business press that Mary Jo White is returning to her former law firm as a partner representing clients who face government investigations. She will also fill the newly created position of Senior Chair of the law firm.

This news is highly significant because it would appear that the U.S. Senate was seriously misled by White’s ethics letter in its deliberations to confirm her as the top cop of Wall Street.

The news is also highly significant because it will mark the fourth time in four decades that Mary Jo White has spun through the revolving doors of Debevoise & Plimpton (where she represented serial law violators) to government service (prosecuting serial law violators). The timeline is as follows:

2002 to 2013: White is a Debevoise & Plimpton partner, representing some of Wall Street’s serially charged banks: JPMorgan Chase, UBS, Bank of America, Morgan Stanley;

1993 to 2002: White is U.S. Attorney for the Southern District of New York (where Wall Street is located);

1990 to 1993: White serves as First Assistant United States Attorney and Acting United States Attorney in the Eastern District of New York;

1983 to 1990: White is litigation partner at Debevoise & Plimpton, where she focuses on white collar defense work, SEC enforcement matters and other corporate work;

1978 to 1981: White works as Assistant United States Attorney in the Southern District of New York, where she became Chief Appellate Attorney of the Criminal Division;

1976 to 1978: White is Associate at Debevoise & Plimpton.

White’s representation in 2013 that she was retiring proved very financially beneficial to her. Her Partners Retirement Program entitled her to receive $42,500 per month or $510,000 per year. But as White writes in her ethics letter, (ostensibly as a gesture toward removing the conflict of receiving ongoing monies from her old law firm), Debevoise was going to give her a “lump sum” for four years of payments, or more than $2 million. The Partner’s plan was unfunded, meaning the law firm had to stay in business to make those payments. Getting a cool $2 million out of harm’s way is a smart financial move. On top of that, White indicated in her ethics letter that she was cashing out of the “Debevoise & Plimpton LLP Cash Balance Retirement plan and my capital account.”

Not only was Mary Jo White a deeply conflicted candidate for SEC Chair but her husband, John White, also represented the big Wall Street banks as a partner at Cravath, Swaine & Moore LLP. Under Federal ethics rules, the conflicts of the spouse become the conflicts of the government employee. None of this persuaded members of the U.S. Senate Banking Committee (many of whom are richly financed in their political campaigns by Wall Street) to reject Mary Jo White’s nomination. The lone dissenter in the Committee’s 21-1 vote was Senator Sherrod Brown, who stated:

“At a time when our Attorney General says that the biggest Wall Street banks are in many ways above the law and the SEC is blocking shareholders’ efforts to break up the banks that they own, we need regulators who will fight every day for taxpayers, Main Street investors, and retirees. But too often we have seen public servants who settle for the status quo, instead of demanding accountability.

“I don’t question Mary Jo White’s integrity or skill as an attorney. But I do question Washington’s long-held bias towards Wall Street and its inability to find watchdogs outside of the very industry that they are meant to police. Mary Jo White will have plenty of opportunities to prove me wrong. I hope she will.”

Mary Jo White did not prove Senator Brown wrong. During her tenure, the long-awaited Consolidated Audit Trail (CAT) failed to get up and running – allowing all of those high frequency traders and Dark Pools on Wall Street to continue to loot the investing public with impunity. White also allowed the big banks to continue their jaded practice of engaging in capital relief trades as her former law firm gushed that the deals could be “effective use of balance sheet capital as banking organizations adjust to the post-crisis regulatory paradigm.”

During White’s tenure, a 25-year veteran trial lawyer at the SEC, James Kidney, retired in March 2014. At his retirement party, he delivered a scathing critique of SEC management. Kidney said that “On the rare occasions when Enforcement does go to the penthouse, good manners are paramount. Tough enforcement – risky enforcement – is subject to extensive negotiation and weakening.” White brought along her Enforcement Chief at the SEC, Andrew Ceresney, from Debevoise & Plimpton. He also returned to the law firm.

By June of 2015, White’s management of the SEC was so problematic that Senator Elizabeth Warren sent her a harsh 13-page critique of her performance. Warren called out White’s failure to finalize rules requiring disclosure of the ratio of CEO pay to the median worker; her continuing use of waivers for companies that violate securities law; the SEC’s continued practice of settling the vast majority of cases without requiring meaningful admissions of guilt; and White’s repeated recusals from investigations because of her prior employment and her husband’s current employment at law firms representing Wall Street.

In February 2015, the New York Times reported that the conflicts of White and her husband had resulted in her recusing herself “from more than four dozen enforcement investigations.” Instead of an SEC Chair, that sounds like a part-time worker.

Given this demoralizing experience with the gold-plated Washington-Wall Street revolving door, one would have expected that President Trump, the man promising to drain the swamp in Washington, to have come up with a better plan for stewardship of the SEC. Instead, Trump’s doubling down. His nominee for SEC Chair is Jay Clayton, a law partner at Sullivan & Cromwell, which has represented Goldman Sachs since the late 1800s. On top of that, Clayton’s wife is a Vice President of (wait for it) Goldman Sachs.

Until there is meaningful legislative reform of political campaign financing and revolving door appointments, Americans will continue to be relegated to the status of dumb tourist in their own country.