±«Óătv

Why aren't the law firms under greater scrutiny?

The large London law firms that advised the banks and other institutions about some of the dodgy deals that were undertaken over the past few years should be investigated and be made to pay this “bank tax”. They continue to advise on these deals and were equally to blame for the credit crunch. They should not be able to hide behind the legal defence that they only gave advice and it was ultimately the decision of their clients. They advised their clients to undertake these deals! Some law firms recently said of the credit crunch that they would not advise clients undertaking deals that could be a detriment to society as a whole. I'm sorry but that is such a load of rubbish. They were happy to give advice on these deals for years, happily taking the fees for providing so-called sound legal advice.

Law firms should be looked at in the same way the rating agencies have been scrutinised. The law firms are not going to lose a client by telling them not to undertake a deal or by giving advice that a client (bank or other financial institution) does not want to hear. But that is why they have a moral and ethical duty to ensure that they do the right thing even if it means losing a client! The whole point of the law society is to regulate the law firms but that institution is run by people who used to run the large law firms so there appears to be a conflict of interest!

The law firms said they didn't see this coming but then are contradicted by some individuals in these law firms who pronounce themselves as all-seeing economic guru's who highlighted these problems at the time. Law firms, especially those at the top of the tree - the magic circle firms - have better spin doctors than the politicians as they seem to have got away with this scott free!

Basically, law firms such as the magic circle firms undertook work and did not seem to consider what the impacts were likely to be and were happy to pocket the fees. Securitisation was after all a brain child of the legal world!

Slightly off topic:

I would also like to point out that for all the talk of social mobility it is the law firms at the top that are really stuck in the past. They hire most of their trainees from a select number of universities, such as Cambridge and Oxford. These "diverse" firms hire people from upper class background as most attend Eton and other similar places. The only diversity comes from the pressure to ensure that a number of token minorities and individuals from poor backgrounds are offered a handful of places.

There needs to be a root and branch reform of the legal sector starting with a review on what the law firms did in relation to the credit crunch and whether they acted ethically and within the rules when acting for clients over the last 10 years. Secondly, an investigation of the recruitment of trainees, the fairness of the process and the actual diversity of law firms needs to be undertaken. Diversity does not mean counting Aussies, Kiwis and Americans as different ethnic backgrounds! This also brings me to the third area that needs to be investigated. The preponderance of law firms to hire Aussies and Kiwis (in the main) to do the job of qualified lawyers rather that take on trainees. The reason - it is cheaper! There are so many people undertaking their law qualifications and looking for training contracts so it seems absurd that law firms are able to recruit economic migrants from these developed countries. These immigrants are the ones that we never hear about. These are the immigrants that are not really needed. I know that is a generalisation as some are top quality individuals that bring something to a firm. But let’s be clear, the sheer number is too much when we have so many equally talented English educated individuals wanting to be trainees. These students my actually include the Aussies, Kiwis and other nationalities who have taken the time to educate themselves on English law, so it is not an issue of race but rather hiring from this pool instead of looking overseas to the extent they are today. The reason English law students are not given an opportunity are because it costs law firms more to train students than hiring an overseas educated individual. These overseas individuals are not allowed to give advice on English law until they have 2 years experience of working in England and then undertake a short course, but they seem to be able to get around this in the first couple of years by having email signatures that say “New Zealand qualified solicitor” or any other nationality you want to substitute that for.

The only people that want an investigation into the law firms, as well as the top accountancy firms, seem to be the Liberal Democrats. If I remember correctly Vince Cable mentioned this during the Chancellor’s debate on Channel 4.

The whole thing is fascinating isnt it.

Goldman Sachs brought to book

The rise of the Lib dems

The IMF proposals

Inflation on the way up

lets not forget Ash clouds which only exist on metereological models in computers reminding us how fragile the whole system is....by our own making.


You can still get odds of 5/6 on nick clegg winning the next debate by the way. the debate is on international affairs and his is the only party who opposed the iraq war and he speaks 5 languages for goodness sake.

Fill your boots everyone. I think I may have found a new career.

I DON'T THINK WE SHOULD START SCRUTINIZING LAWYERS (#1)

'Goldsmith' is too close to 'Goldman' for comfort, and when it comes to Scottish judges - there are six of 'em.

Make law practitioners subject to the law, and that way madness lies.

What regulation would the IMF propose? When will they report on international laws? Tax is fine and the higher the rate the better, but we can't forget regulation so tight they gasp for air each and every minute they operate. Without the will to prosecute each and every scam artist we will not be safe - market traders and car boot traders are regularly taken to task by the police. Larger financial businesses shouldn't be treated any different. As long as they are then all we have is window dressing. Not good.

We also need to look at the accountancy firms, the rating agencies, the legal proession. All of them have let us all down while making a packet themselves.

Right, off to see what is happening in the real world and real debate in Latin America.

Paul, as my TUC blog tonight( says, the IMF report isn't as down on the Robin Hood Tax as you suggest, although clearly it's not a ringing endorsement. Compared to what was expected just days ago, the IMF have clearly reflected on the enormous public and political support for the idea. The IMF could have trashed financial transactions taxes as unworkable, but they explicitly didn't. And the key argument for a Robin Hood Tax remains. It would raise an order of magnitude more revenue than the IMF's proposed FAT tax, which they admit would meet only a small fraction of the costs of the crisis. Where are we going to get that money from if not from the Robin Hood Tax?

Where do these proposals come from? Presumably the IMF would not produce proposals unless they beleived there was a fair measure of support for them amongst the large players - specially the US, but also the BRICs and EU. Presumably this would greatly increase the budget and importance of the IMF. Will this lead to calls for further development of IMF , G20 and other transnational structures? How about a standing committee of the G20? How about some democratic accountablilty? Can world government be far behind? What about a world presisdential election? Lets hope so - here's to 'the renegade Kautsky'.

The Tobin Tax is the only way to implement an orderly winding down of the dubious derivatives markets.

Only through the gradual implementation of a transaction tax can we have a managed deflation of this gargantuan credit bubble:

/blogs/newsnight/fromthewebteam/2010/04/monday_19_april_2010.html

By not acknowledging this solution, policy makers are by implication not concerned about the continuing growth of derivatives. Yet this is where the problems clearly stem from:



"An October 2009 Frontline documentary titled 'The Warning' described Brooksley Born's failed efforts to control regulation of and bring transparency to the derivatives market, and noted the continuing resistance thereto. The program concluded with Born sounding another warning: 'I think we will have continuing danger from these markets and that we will have repeats of the financial crisis - may differ in details but there will be significant financial downturns and disasters attributed to this regulatory gap, over and over, until we learn from experience.'"

How can any politician whether this side of the atlantic or the other say with impunity that "no one saw this coming" when the very regulator in the US expressly tried to halt the explosion of dubious derivatives back in 1998/9!

But how about the G20 meeting in Washington yesteday and today, with the OECD warning of jobless recovery and lost generations across all OECD due to youth unemployment

Completely covered up by IMF supposed moves?

Once again you have been completely fooled

Again - look under the covers please for some real reporting.

Proper taxation of profits that clearly are produced with ease is good but the the problem is structural and cultural and the priority must be to ensure a crisis does not happen again. Shamefully Labour seem to be coming third in the three horse race to reform the finance sector and only if Clegg tells Brown to go on the 7th May will real reform be on the table.

Rather interesting from Jamie Dimon - described by Simon Johnson as
maybe the most dangerous man on earth. ( Sorry to disappoint jaded_jean/satist/methhead et al headbangers )

"When profits fall too sharply then capital will move somewhere else, where there is more money to be earned, for example non-regulated markets,"

"particularly of a proposed bailout fee on big banks which he has called a "punitive bank tax".

'non-regulated markets' Well I can think of the art world for one. Artists are like lambs to the slaughter for dealers, reps, advisers and any other assorted low life that seeks to exploit.

Is the IMF tax just a distraction / appeasement to the sector to avoid any discussion on the need for real reforms? See post #7.

Surely, who is better placed to take a profit or asset based tax on the chin, than the very practicioners of tax evasion / avoidance!

It will be like herding cats. Taxation is not reform (*), and the financial sector is throwing the kitchen sink at blocking REAL reforms:



* The Tobin tax is fundamentally different in that companies cannot weasle worm the fact that they are undertaking a multiplicity of transactions (you can fake profits & assets, that's what many of them have been doing these last few decades, but it's much harder to fake the sales ledger - that's too close to fraud territory!).

The reason that the financial sector doesn't like the Tobin Tax is that this is harder to avoid, and actually gets to the root of the problem: millions of dubious transactions.

Media is banging on about the debt, well yes very important but the
value of the dollar and pound is where catastrophy could be.

The is part of the problem not the solution.

complex instruments and scamming.

Anyone going to bring forward a law to outlaw
COMPLEX ?

complex = a smoke screen to scam

Notice how Meth head goes in for complex

Check out :-

tp://maxkeiser.com/watch/the-keiser-report/episode-33-13-april-2010-special-greenspan-bubble-edition/

and from 14.20 on. I like the way Max puts it out. [Unsuitable/Broken URL removed by Moderator]

DOES ANYONE THINK SOLVENCY = CONTENTMENT?

While the world (and this blog) wrestles with money and the crooked manipulators of money, the madness of mankind, across the earth multiplies. Even if we emerge with a magnificent global banking scheme, and with poverty conquered (!) misery and mayhem will be rife and beyond the whit of 'clever money folk' to redress.

Hawkeye_Pierce [#11] "Is the IMF tax just a distraction / appeasement to the sector to avoid any discussion on the need for real reforms?"

I suspect so. The IMF and World Bank, like the UN is an American creation to further the USA's interests globally. The USA does very well out of the IMF, which is more than can be said of the recipients of its 'help'.

People have got to stop seeing the USA as a great benefactor. With all the evidence to date (the alleged con by Goldman Sachs and Paulson is classic), why do so few see through all the spin? Is it fear of what they will see? Is it fear that the likes of the Iranians, Soviets etc are/were right and that we are the bad guys/gals?

#11 Hawkeye_Pierce

Another great post!

#11 Hawkeye_Pierce

"the root of the problem: millions of dubious transactions."

The roots go down deeper - the private ownership of the means of production!

Erik Townsend - a private investor in the Maquire story, GATA and the LBMA :-



I cant wait for more dangly bits on this one.

19 duvinrouge

'The roots go down deeper - the private ownership of the means of production!'

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Then surley the fix is national socialism!

I think worrying about a tax on banks should not be top of our list of worries at the moment.

Unemployment has continued to rise - most notably, private sector employment has continued to fall despite an increase in public sector jobs.

This would be bad enough in itself but when you remember the 200-odd billion Pounds of printy printy, cash for clunkers, bending over backwards to support the housing bubble and the lowest interest rates in history, the reality is that the economy is going from bad to worse to alarming.

Not alarmed? You should be.

The prudent, especially the old, are continuing to be punished, via low interest rates, to bail out the feckless and greedy who bought into the UK's biggest property bubble. Brown, Darling and King seem desperate to maintain this long enough to get past May 6th but inevitably, as every economic bubble in history has shown us, the long-term price of anything and everything eventually returns to norm.

The UK and Australian housing markets are now alone amongst all the great housing bubbles of the past 10 years not to have crashed spectacularly - the US one has, the Spanish one has, the Irish one has and they all continue to fall.

Brown's apparent desperation to keep the bubble going is doing serious harm to the UK economy. It is punishing the prudent, the saver and the elderly. We simply cannot print enough money to keep this going forever and, with unemployment rising, the next 6 months are going to be amongst some of the most interesting and most alarming for the UK economy in several decades.

In reply to a question

'Can photographs change the way we think about the world'



on The Photographers Gallery I wrote :

'Been wondering for some time why you photo people want to be involved with Deutsche Borse. And why Deutsche Borse Group want to be involved with you? Seriously can you anwser that ? To help a little Janet Tavakoli wrote three books on aspects of banking - they really are worth reading and just for good measure Simon Johnson and James Kwak's book - 13 Bankers. Feel free to pass on my thoughts to Anne-Marie Beckmann, the Deutsche Börse Art Collection curator, and Prof. Jean-Christophe Ammann, curatorial advisor. Can photographs change the way we think about the world may become a different question.'

It was removed so I'm posting it here because in view of what Jamie Dimon said I think it is very relevant:-



"When profits fall too sharply then capital will move somewhere else, where there is more money to be earned, for example non-regulated markets,"

The ±«Óătv management must really have concern with what goes on here - people openly calling for Nazism.

#21 DebtJuggler

The evidence of the 20th century is you can't have socialism in one country.

Why? Because you end up competing with the capitalists who will do anything to undermine you. Hence the one-party dictatorships to try to hold on to power.

The revolution has to be a world revolution - the breakdown of the world capitalist market - for there to be any chance of socialism, i.e. the means of production controlled by the people through direct democracy.

That's not to say I don't recognise what the Cuban communists have achieved for their people.
Without them they would be living much like the Haitians.
But even a good Cuban communist should conceede that they haven't achieved communism yet.
Power is still very much with the Communist Party.

And don't insult the Cubans by equating Cuba with National Socialism - they are internationalists sending doctors, teachers, engineers all other the world.
They are never racist.

#20 - Chris Powell of GATA replies to Erik Townsend :-

Well Clinton has confessed that the advice to not regulate derivatives was wrong:



Where does Gordon Brown or Mervyn King stand on this? Are they satisfied that derivatives do not need regulating?

Paul Mason

You heard the man on NN tonight say...'the education system in this country does not encourage anyone to become an engineer'

Do you get it now?

24 flicks wrote:

'The ±«Óătv management must really have concern with what goes on here - people openly calling for Nazism.'

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Herr flicks,

Please do not fret over the word 'Nazi' as a shortened phrase for 'National Socialism'. It's purely the shortened German word for 'Nationalsozialistische'. I do not profess to be fluent in German, but I have at least studied the language for over 2 years.

I am fairly sure that you do not therefore speak any foreign languages.

The word 'Nazi' is an emotive word that has be deliberately distorted to conjure up the delusion of the far right when in fact it represents the the left i.e. socialism.

You have a lot to learn.

25 duvinrouge

'And don't insult the Cubans by equating Cuba with National Socialism - they are internationalists sending doctors, teachers, engineers all other the world.
They are never racist'

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You were doing great until you mentioned the Cubans!

I never ever even mentioned the Cubans!....how did I ever get implicated with them in your argument against me?

You need to read statist/Math....their logic is faultless!

Who says regulators can't regulate?

If there is a failure to properly regulate and prevent fraud from happening the regulators have the power, just maybe they lack the cojones (or some nice fella like Blair castrated them!).

It would be nice to William K Black on Newsnight at some point - his cojones are still intact:

#29

'I am fairly sure that you do not therefore speak any foreign languages.'

Wrong

I also read and write.