<HTML>In a message dated 12/26/2002 3:53:50 PM Eastern Standard Time, mpollak@panix.com writes: <BLOCKQUOTE TYPE=CITE style="BORDER-LEFT: #0000ff 2px solid; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px">One footnote of a question.  You've mentioned several times that the corporations admitted no wrongdoing, and that this was very important to them as it would effectively jam lawsuits against them...</BLOCKQUOTE> Perhaps lawsuits will get <BLOCKQUOTE TYPE=CITE style="BORDER-LEFT: #0000ff 2px solid; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px">filed, but you're quite sure they won't prevail? </BLOCKQUOTE> I've been thinking about this and should clarify. It will be hard to pin anything substantial on the corporations or the banks, certainly nothing that would usher in real change or make whole the losses. That said, there will likely be a round of civil lawsuit settlements, to 'clear the air,' as token in nature as the $1.4bln was. <BLOCKQUOTE TYPE=CITE style="BORDER-LEFT: #0000ff 2px solid; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px">It's remarkable what a wide range of applications there is for this 90s techique is of attaching the word "could" to billions of dollars and instantly clouding men's minds.  It seems to be working just as well for the smokescreen as it did for the bubble. </BLOCKQUOTE> Yeah. Scary. <BLOCKQUOTE TYPE=CITE style="BORDER-LEFT: #0000ff 2px solid; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px"> Financial Times; Dec 23, 2002 "Leading investment banks that misled investors are bracing themselves for the release of potentially embarrassing details that could boost claims against them totalling billions of dollars."</BLOCKQUOTE> As in Citigroup's case - banks can charge off losses (take from reserves) in their income statements. (Citi just announced a $1.5bln charge-off this week in part, they said, to cover their fines.) All that really does is lower their share price, possibly their dividends. In other words, banks directly pass all settlement costs back to their own shareholders. <BLOCKQUOTE TYPE=CITE style="BORDER-LEFT: #0000ff 2px solid; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px">"The findings may also signal which individuals could face prosecution as Eliot Spitzer, New York attorney-general, and the Securities and Exchange Commission turn attention from the institutions to their executives."</BLOCKQUOTE> Definitely important to get the perpetrating execs - but, the pattern of minor settlements, no culpability and no true reform will repeat. <BLOCKQUOTE TYPE=CITE style="BORDER-LEFT: #0000ff 2px solid; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px">"Even for those who avoid charges, the contents of the findings could fuel civil law suits filed against them and damage their professional reputations."</BLOCKQUOTE> They're multi-million or billionaires!  Professional reputation doesn't mean squat on the beach. "Mr Spitzer and Steve <BLOCKQUOTE TYPE=CITE style="BORDER-LEFT: #0000ff 2px solid; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px">Cutler...pledged...to work towards a restitution fund but acknowledged it might be impossible to achieve." </BLOCKQUOTE> Exactly. Nomi </HTML>