Panama Papers: Will Wall Street Get Swept Up in Justice Department’s Investigation?
Wall Street enjoys a certain amount of immunity from the DoJ: Wall Street firms may be fined (with fines paid using a portion of the profits the firm made), but no individual is ever held accountable and no individual pays any fines. (Fines are paid by the bank or investment firm, leaving individual bonuses intact.)
But here’s another opportunity to actually hold Wall Street accountable, and Attorney General Loretta Lynch may be less protective of Wall Street than Attorney General Eric Holder was (whose practice of law at Covington & Burling included Wall Street firms as former and potential future clients). (You see the dynamic of protecting Wall Street in Mary Jo White’s tenure as chair of the SEC: she is a defense lawyer for Wall Street firms before joining the SEC and she will return to that practice after leaving the SEC, and one assumes she would not want to anger any former or potential future clients in her private practice.)
Pam Martens and Russ Martens report in Wall Street on Parade:
The Wall Street Journalreported yesterday that the U.S. Department of Justice in Washington D.C. and its U.S. Attorney’s office in Manhattan “have launched a criminal investigation into whether individuals at Mossack Fonseca & Co., the law firm at the center of the ‘Panama Papers’ scandal, knowingly helped its clients launder money or evade taxes…”
That investigation, if conducted thoroughly and without improper interference, could turn up the heat on some powerful Wall Street players.
On May 16 Wall Street On Parade broke the story that the Miami office of Citigroup’s Private Bank at 201 South Biscayne Blvd. was the listed address for dozens of offshore companies whose agent is Mossack Fonseca. (See graph below.) Our information was obtained from a search of the public database made available by the International Consortium of Investigative Journalists (ICIJ), which received more than 11.5 million leaked files from the Panama-based law firm, Mossack Fonseca. ICIJ calls Mossack Fonseca “one of the world’s top creators of hard-to-trace companies, trusts and foundations.”
Prior to Citigroup’s implosion and bailout in 2008, it reported its major subsidiaries to the Securities and Exchange Commission. In this report from 2006, Citigroup showed more than 1600 major subsidiaries with more than five dozen in secrecy jurisdictions. As Citigroup came under serial investigations by the Justice Department and other Federal regulators, its list of subsidiaries shrank dramatically. But as we reported in 2014, that doesn’t mean the subsidiaries are actually gone – many are simply just not listed any longer in an out-of-sight-out-of-mind kind of operation.
Wall Street hedge funds may also come under the microscope. Hedge fund titans have turned up in the Panama Papers database or earlier leaked documents that are now part of the ICIJ database.
Internationally known hedge fund billionaire mogul, George Soros, turned up in the Panama Papers. His name is linked to Soros Holdings Limited, whose agent is Mossack Fonseca, with the British Virgin Islands listed as its registration. Another company tied to Soros is Soros Finance Inc., which shows registration in Panama and also shows Mossack Fonseca as its agent.
Another hedge fund mogul, . . .