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Archive for the ‘Obama administration’ Category

Part 6 of “Where did the money go?”: Were paper losses the goal all along?

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David Dayen continues his interesting series of big-corporation criminality in The Intercept. The blurb for the latest installment:

If your goal is to launder money through a brokerage account, paper losses are worth serious money. Buying imaginary shares of a stock guaranteed to lose value is an awesome way to do that. You just need someone to set it up.

Written by LeisureGuy

27 September 2016 at 10:47 am

“Where did the money go?” Part 5: Turning up like a bad penny

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David Dayen publishes part 5 of his Penny Stock Chronicles in The Intercept. The blurb:

The penny stock Chris DiIorio invested in that crashed and burned was one of many stocks with similar trajectories traded by the same two giant companies. But if one was the buyer and the other the seller, how could this be in both of their interests?

It’s worth reading the entire series.

Written by LeisureGuy

26 September 2016 at 9:57 am

Part 4 of “Where did the Money go?”: Calling the SEC

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David Dayen continues his series on an institutional financial scam using penny stocks; here’s the blurb for Part 4:

Penny stock gadfly Chris DiIorio tells the SEC about his suspicion that Knight Capital is tanking penny stocks on purpose and racking up unsustainable balance-sheet liabilities. But that leads to another mystery: Why don’t they seem to care?

The entire series so far is very much worth reading.

Written by LeisureGuy

25 September 2016 at 10:38 am

Naked Shorts Can’t Stay Naked Forever

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This is the most amazing series. Today is Part 3 of David Dayen’s series on an amazing scam, with this blurb:

Who engages in massive trades in penny stocks on the industry’s own “chill list”? And what happens when you sell a stock you don’t have? Victimized investor Chris DiIorio finds the answers in plain sight and wonders why no one else seems to care.

Earlier parts are found here. It really is a criminal enterprise.

Written by LeisureGuy

24 September 2016 at 12:38 pm

FBI and DOJ Vow to Continue Using Junk Science Rejected by White House Report

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Apparently the FBI and DOJ operate independently of the White House, which may in fact be true: it’s not a good idea for the President to be deciding what the DoJ and FBI should do, since they should follow the law. (It’s probably also not a good idea for the President to decide on his own authority to have American citizens killed with no due process and certainly no trial.)

Jordan Smith reports in The Intercept:

Although a report released this week by the President’s Council of Advisors on Science and Technology concludes that there is scant scientific underpinning to a number of forensic practices that have been used, for years, to convict thousands of individuals in criminal cases, the U.S. Department of Justice has indicated that it will ignore the report’s recommendations while the FBI has blasted the report as “erroneous” and “overbroad.”

The report, titled “Forensic Science in Criminal Courts: Ensuring Scientific Validity of Feature-Comparison Methods,” concludes that a number of common, pattern-matching forensic disciplines – bite mark analysis, fingerprint and firearm comparison, shoe tread analysis, and complex DNA mixture analysis – need additional support to be deemed scientifically valid and reliable – a conclusion in line with that reached in the groundbreaking 2009 report on forensics issued by the National Academy of Sciences National Research Council.

In a statement reported by the Wall Street Journal, Attorney General Loretta Lynch said that the agency remains “confident that, when used properly, forensic science evidence helps juries identify the guilty and clear the innocent, and the department believes that the current legal standards regarding the admissibility of forensic evidence are based on sound science and sound legal reasoning.” As such, she said, while “we appreciate their contribution to the field of scientific inquiry, the department will not be adopting the recommendations related to the admissibility of forensic science evidence.”

The DOJ did not respond to The Intercept’s request for additional information, but based on her statement, it appears Lynch is saying there’s simply nothing to see here and that the criminal justice system is working just fine.

The Intercept first reported on the report’s conclusions earlier this month, after obtaining a draft copy. The text of the final report, released Sept. 20, appears to be nearly identical to the leaked draft.

Foundational validity and reliability are essential to shore up forensic practices, the report concludes – attributes that are largely absent in the disciplines it reviewed, which rely heavily on the subjective determinations of practitioners. Pattern-matching forensics involve an examiner determining whether a piece of crime scene evidence can be visually matched to a suspect – whether an alleged bite mark on a victim’s hand matches a suspect’s dentition, for example, or whether a partial, or smudged, fingerprint found at the scene of a crime matches a clean print obtained from a suspect – determinations currently based primarily on a subjective eyeballing of the objects at issue.

“Foundational validity requires that a method has been subjected to empiricaltesting by multiple groups under conditions appropriate to its intended use,” reads the report. Such studies must demonstrate that a practice is “repeatable and reproducible” and must provide “valid estimates of the method’s accuracy” – in other words, a meaningful error rate. “The frequency with which a particular pattern or set of features will be observed in different samples, which is an essential element in drawing conclusions, is not a matter of ‘judgment.’ It is an empirical matter for which only empirical evidence is relevant,” the report continues. “For forensic feature-comparison methods, establishing foundational validity based on empirical evidence is thus a sine qua non. Nothing can substitute for it.”

For years forensic practitioners in many of the disciplines included in the White House report (as well as in the National Academy of Sciences report) have overstated in court the validity and reliability of their results. Consider the case of Bill Richards, for example, who spent nearly 23 years in prison for murdering his wife Pamela before the California Supreme Court last May overturned his conviction, concluding that Richards had been a victim of junk science and false testimony. In his case, a renowned forensic dentist testified that a mark found on Pamela’s hand was a clear match to Richards’s supposedly unique dentition. Notable, the dentist testified, was that Richards had an under-erupted canine tooth that would account for a void in the alleged bite-mark injury to Pamela’s hand; only “one or two or less” people out of 100 would have such a feature, he testified. The dentist, Dr. Norman “Skip” Sperber, ultimately recanted that testimony, saying that it had no scientific basis. The new White House report notes that it is unlikely that bite-mark evidence will ever be scientifically supported.

In all, the report makes eight overarching recommendations for improvement— to the National Institute of Standards and Technology, to the FBI, to the attorney general, and to the judiciary — and called for “a vigorous research program” to improve forensic sciences building off “recent important” research conducted into fingerprint analysis, that the judiciary take into account actual scientific criteria when assessing whether forensic evidence and testimony should be allowed into court, and that the attorney general should “direct attorneys appearing [in court] on behalf of the [DOJ] to ensure expert testimony in court about forensic feature-comparison methods meets the scientific standards for scientific validity.”

“Where there are not adequate empirical studies and/or statistical models to provide meaningful information about the accuracy of a forensic feature-comparison method,” the report concludes, “DOJ attorneys and examiners should not offer testimony based on the method.” And in the event that testimony is necessary, the report says, the expert should “clearly acknowledge to courts” the lack of scientific evidence to support the underlying forensic practice.

Under “current legal standards,” and under the U.S. Supreme Court ruling in the 1993 case Daubert v. Merrell Dow Pharmaceuticals, federal judges are tasked with acting as gatekeepers over what expert testimony will be allowed into evidence. Where scientific – or supposedly scientific – evidence is concerned, the Supreme Court concluded that before allowing expert testimony in a case the trial judge must ensure that “any and all scientific testimony or evidence admitted is not only relevant, but reliable” which necessitates, in part, an assessment of “whether the reasoning or methodology underlying the [expert’s] testimony is scientifically valid.”

This, the new report correctly notes, is where science and the law intersect. But in practice, legal scholars note, the Daubert standard has not kept pseudoscience out of the courtroom. And when courts rely on precedent to allow certain questionable forensic practices into evidence the result is something like a feedback loop. “Bite-mark analysis has passed every Daubertchallenge that it has ever faced and [yet] there isn’t a scientist on the planet that would argue that bite-mark analysis is a valid and reliable science, aside from the few practitioners who still cling to that belief,” said Chris Fabricant, director of strategic litigation for the Innocence Project and a vocal critic of the use of junk science.

Fabricant said the DOJ’s rejection out-of-hand of the White House report is disheartening. “You would think that they would want to get it right. The idea is not that we’re going to spring open the jailhouse doors and let everybody free. The idea is that scientific evidence ought to be scientific,” he said. “To simply reject the call for more research and to say that Daubert is sufficient is ludicrous, because Daubert is obviously not sufficient,” he continued. “So, the idea that you would point to the courts and to precedent for the idea that forensic evidence is good enough for government work is a joke.”

Attorney General Lynch was not alone in her rejection of the science council’s report. The FBI also . . .

Continue reading.

It’s important and it shows clearly how out of whack a good part of the government is.

Written by LeisureGuy

23 September 2016 at 8:56 pm

What the US banking industry is and what has happened as a result.

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This column in Wall Street on Parade by Pam Martens and Russ Martens is worth reading. From the column:

. . . Let’s recap what the public has learned over the past eight years about the Wall Street banking model from hell. (1) The greatest housing collapse since the Great Depression resulted from Wall Street banks muzzling their internal whistleblowers who wrote memos to management and shouted from the rafters that the banks’ mortgage loan departments were ignoring their own compliance rules and buying up tens of thousands of mortgages with wildly overstated incomes by the mortgage holder. (2) The banks then knowingly bundled these toxic mortgages into pools and paid the ratings agencies, Standard & Poor’s and Moody’s, to assign triple-A ratings to the offerings (called securitizations). (3) The banks knew these toxic mortgages would fail but they sold them to their customers as sound investments. (4) The banks also used their insider knowledge that the mortgages were going to fail to place bets (short sales) and reap billions of dollars in profits as the U.S. housing market collapsed and families were thrown into the streets.

Last December, “The Big Short” movie began to play in theatres across America, allowing millions of people to see how the unchecked, insidious greed of Wall Street had destroyed the nation’s economy along with the reputation of Wall Street, the ratings agencies and the revolving door regulators. (See video below.) The movie was based on real-life people on Wall Street and adapted from the book by the same title by author Michael Lewis, an authoritative source through his previous career on Wall Street.

Years before the movie made it to the big screen, thousands of activists around the country created the Occupy Wall Street movement to advocate for a realignment of their democracy and a radical overhaul of what Wall Street had become: a thinly disguised wealth transfer system for the one percent, being propped up by a corrupt political campaign finance system. After commanding news headlines for months and being carefully monitored by government surveillance, a brutal police eviction was orchestrated against Occupy Wall Street, journalists covering the protests and even New York City Council Members attempting to monitor what was happening. Congressman Jerrold Nadler sent a letter on December 6, 2011 to Attorney General Eric Holder at the  U.S. Department of Justice requesting that an investigation be undertaken. Nadler’s description of the events were reminiscent of a police state protecting the criminals: . . .

The column explains what this toxic culture has done to IPOs. And do read the whole thing: it’s good to be reminded of the sort of society in which we actually live.

Written by LeisureGuy

23 September 2016 at 5:44 pm

More on the contemptible response of the FBI, Department of Justice, and prosecutors to unwelcome facts

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Those who dedicate their lives and careers to winning convictions are not interested in anything, valid or not, that makes winning a conviction the least bit more difficult. It seems that the majority of the FBI, prosecutors, and DoJ do not really care whether the evidence they use is accurate or not: their sole focus is on winning convictions, and to hell with evidence.

Our criminal justice system has just put on public display the degree of its corruption, and it’s an ugly sight. Daniel Denvir writes in Salon:

Under fire yet again, law enforcement is fighting back. Facing heavy criticism for misconduct and abuse, prosecutors are protesting a new report from President Obama’s top scientific advisors that documents what has long been clear: much of the forensic evidence used to win convictions, including complex DNA samples and bite mark analysis, is not backed up by credible scientific research.

Although the evidence of this is clear, many in law enforcement seem terrified that keeping pseudoscience out of prosecutions will make them unwinnable. Attorney General Loretta Lynch declined to accept the report’s recommendations on the admissibility of evidence and the FBI accused the advisors of making “broad, unsupported assertions.” But the National District Attorneys Association, which represents roughly 2,5000 top prosecutors nationwide, went the furthest, taking it upon itself to, in its own words, “slam” the report.

Prosecutors’ actual problem with the report, produced by some of the nation’s leading scientists on the President’s Council of Advisors on Science and Technology, seems to be unrelated to science. Reached by phone NDAA president-elect Michael O. Freeman could not point to any specific problem with the research and accused the scientists of having an agenda against law enforcement.

“I’m a prosecutor and not a scientist,” Freeman, the County Attorney in Hennepin County, Minnesota, which encompasses Minneapolis, told Salon. “We think that there’s particular bias that exists in the folks who worked on this, and they were being highly critical of the forensic disciplines that we use in investigating and prosecuting cases.”

That response, devoid of any reference to hard science, has prompted some mockery, including from Robert Smith, Senior Research Fellow and Director of the Fair Punishment Project at Harvard Law School, who accused the NDAA of “fighting to turn America’s prosecutors into the Anti-Vaxxers, the Phrenologists, the Earth-Is-Flat Evangelists of the criminal justice world.”

It has also, however, also lent credence to a longstanding criticism that American prosecutors are more concerned with winning than in establishing a defendant’s guilt beyond a reasonable doubt.

“Prosecutors should not be concerned principally with convictions; they should be concerned with justice,” said Daniel S. Medwed, author of “Prosecution Complex: America’s Race to Convict and Its Impact on the Innocent” and a professor at Northern University School of Law, told Salon. “Using dodgy science to obtain convictions does not advance justice.”

In its press release, the NDAA charged that the scientists, led by Human Genome Project leader Eric Lander, lack necessary “qualifications” and relied “on unreliable and discredited research.” Freeman, asked whether it the NDAA was attempting to discredit scientific research without having scientists evaluate that research, demurred.

“I appreciate your question and I can’t respond to that,” he said.

Similarly, Freedman was unable to specify any particular reason that a member of the council might be biased against prosecutors.

“We think that this group of so-called experts had an agenda,” he said, “which was to discredit a lot of the science…used by prosecutors.”

The report, “Science in Criminal Courts: Ensuring Scientific Validity of Feature-Comparison Methods,” was the result of a comprehensive review or more than 2,000 papers and produced in consultation with a bevvy of boldfaced names from the legal community. It found that there is no solid scientific basis to support the analyses of bite marks, firearms, biological samples containing the DNA of multiple individuals and footwear. The report also found that the certainty of latent fingerprint analysis is often overstated, and it criticized proposed Justice Department guidelines defending the validity of hair analysis as being grounded in “studies that do not establish [its] foundational validity and reliability.”

The new report is comprehensive but hardly the first time that scientific research has cast doubt on the reliability of evidence used in trials — everything from eyewitness identification to arson investigations. The report cites a 2002 FBI reexamination of their own scientists’ microscopic hair comparisons and found that DNA testing showed 11 percent of the samples that had been found to match in reality came from different people. A 2004 National Research Council report cited found there was an insufficient basis upon which to draw “a definitive connection between two bullets based on compositional similarity of the lead they contain.”

One of the most important developments in recent decades has been DNA science, which has not only proven that defendants have been wrongfully convicted but also raised questions about the forensic evidence used to win those convictions.

In the Washington Post, University of Virginia law professor Brandon L. Garrettdescribes the case of Keith Harward, who was exonerated on April 8 for a Newport News, Virginia rape and murder that DNA evidence later showed someone else committed. His conviction, for which he spent 33 years behind bars, hinged on the false testimony of two purported experts who stated that his teeth matched bite marks on the victim’s body.

“Of the first 330 people exonerated by DNA testing, 71 percent, or 235 cases, involved forensic analysis or testimony,” Garrett writes. “DNA set these people free, but at the time of their convictions, the bulk of the forensics was flawed.”

In an interview, Garrett called the NDAA response “juvenile.”

“The response seems to be you say that certain forensic sciences are unscientific, well you’re unscientific,” said Garrett. “To call a group of the leading scientists in the world unscientific, it’s just embarrassing….I really doubt that they speak for most prosecutors.”

Many cases, the report found, have “relied in part on faulty expert testimony from forensic scientists who had told juries incorrectly that similar features in a pair of samples taken from a suspect and from a crime scene (hair, bullets, bitemarks, tire or shoe treads, or other items) implicated defendants in a crime with a high degree of certainty.”

Expert witnesses have often overstated the certainty of their findings, declaring that they were 100-percent certain when in fact 100-percent certainty is scientifically impossible.

Forensic science has largely been developed within law enforcement and not by independent scientists, said Medwed. In the case of bite mark analysis, the report concludes that the method is basically worthless. But by and large, the report calls not for the science to be thrown out forever but to be improved so that it is in fact reliable.

“The NDAA response strikes me as a bit defensive to say the least and puzzling because my hope is that in looking at this report the reaction of prosecutors would be, how do we improve the system,” said Medwed. “Even if they believe that some of these disciplines are legitimate, how do we further test them, and refine them so they can be better?”

The NDAA, however, not only dismisses the scientific research in question but asserts that scientific expertise has no role to play in determining what kind of evidence judges decide to admit into court. . .

Continue reading.

Ignorance is bad, stupidity is worse, and combination is deadly. It’s a bad sign that so many in law enforcement and among prosecutors seem to embrace ignorance with enthusiasm.

Written by LeisureGuy

23 September 2016 at 1:57 pm

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