Tuesday, October 11, 2011

Eat the rich: the Omaha version of Occupy Wall Street; downtown march this Saturday

Update: Saturday's Occupy Omaha demonstration deets are here:

New Nebraska Network has just posted a piece on this weekend's local mini-me version of Occupy Wall Street:
...It's now reached the point where this movement has been endorsed by several unions and House Democratic Leader Nancy Pelosi. She said that she supports the message to Wall Street that "change has to happen." Pelosi added that the failure of TARP, commonly known as the bank bailout, to add liquidity to the Main Street marketplace is fueling Americans' animosity towards Wall Street. "The thought was that when we did that [pass TARP], there would be capital available and Main Street would benefit from the resources that went largely to Wall Street," said Pelosi. "That didn't happen. People are angry."

The reaction from the GOP and the Right tells me that they are genuinely alarmed by this movement. GOP Presidential candidate Mitt Romney described the Occupy Wall Street movement as "dangerous...class warfare." House Majority Leader Eric Cantor (R-VA) described the Wall Street protesters as a "mob."
Representative Peter King (R-NY) went so far as to say: "We have to be careful not to allow this to get any legitimacy," he said, adding "I'm taking this seriously in that I'm old enough to remember what happened in the 1960s... We can't allow that to happen."

This movement is "dangerous" to the objectives of the large corporations and the Right because they threaten to expose the inequities of a political and economic system where the very wealthiest individuals and corporations game the system to their own political and financial advantage. The last thing Mitt Romney - who has a net worth in the vicinity of $250 million - wants the American people to know is that he pays an average of 14% of his income in federal taxes. That's probably a lot less than anybody who reads this blog or the Leavenworth Street blog. If these kinds of truths get out, the GOP and it's corporate allies will be in a lot of trouble.

This Occupy Wall Street Movement has now spread to Nebraska... Local supporters of the Occupy Wall Street Movement have set up Facebook pages for the Omaha and Lincoln chapters. The Omaha World-Herald reported today that the Occupy Omaha movement has scheduled a march for 9 a.m. Saturday. The group is planning to march from the City-County Building, 1819 Farnam St., to the Federal Reserve Bank at 2201 Farnam St. They might also venture farther downtown, into the Old Market, and pass several major bank branches along the way.
If marchers go past the Wells Fargo branch, they might do well to remember how deeply that bank's Wachovia unit was involved transferring drug smuggling money:
Wachovia admitted it didn’t do enough to spot illicit funds in handling $378.4 billion for Mexican-currency-exchange houses from 2004 to 2007. That’s the largest violation of the Bank Secrecy Act, an anti-money-laundering law, in U.S. history -- a sum equal to one-third of Mexico’s current gross domestic product.

“Wachovia’s blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations,” says Jeffrey Sloman, the federal prosecutor who handled the case.
And if the marchers pass First National Omaha, they might remember this fond remembrance from someone who has dealt with that institution's "trust" department:
First National Bank of Omaha North Platte took over management of our family trust in 2002; I use the term management lightly. They have done a horrible job - except for providing a strong, steady income to their investment arm.

We are now at three years after our mother's death, when the remainder of the trust was to be distributed, still waiting on them to complete distribution of the monies.

They finally distributed most of them last month, but, gee, they'd invested in a $100,000 bond that couldn't be cashed for a couple more weeks. -Never mind that they had no business investing in a non-liquid asset when the distribution has been imminent for several months.

The vp sent us all a note telling us the bond couldn't be sold until Oct. 1 - but would then be distributed. The lack of professionalism was incredible! Plus she sent some little "accounting lite" "spreadsheet" of the distribution. -Anyway, she stated in an e-mail that the bond proceeds would be distriubuted after the 1st (which had lost value by the time they sold it - in keeping with their track record of smart management). That was a Friday. The following Wednesday, she hadn't distributed it. So I sent an e, inquiring as to when it would be distributed. She replied "later this week." It's now been three weeks, and nothing has been distributed.

I had my lawyer send a letter to their attorney, demanding that I received interest on my share - 3.75% - which is what my Kasassa account pays - from the 1st until she finally gives us our money.

But the point here is that THIS ISN'T THEIR MONEY!!! -But they refuse to distribute it! I have no doubt they're collecting interest on it's use. -More of the same "the heck wit the beneficiaries we're supposed to take care of" - and just ignore the legal "niceties" of their fiduciary responsibility!

The overall picture: after over 10 years of management, the bank is returning to us almost exactly what we turned over to them, in 2002. On $2.1M over 10 years, there is virtually no investment gain whatsoever. But they've made plenty off of it - brokerage fees, their ever-increasing quarterly "management fees," the legal fees - including the penalties and interest on THEIR LAWYERS SCREW UP - and now? They're charging an additional $25,000 "trustee fee" to the trust for their services!

Their quarterly statements reflect a trackrecord of constant "churning" of the trust- trades being made, no matter what the economic or investment environment - on a constant basis, through volatile markets including the economic meltdown a large portion of them at a loss. This is the quintessential definition of the word "churning." But the return on investment for the trust was never a priority; colleting fees for themselves was.

When they first took over the trust, they told my attorney that "they didn't charge brokerage fees." When I saw these notations, we sent a letter to the bank vice president, inquiring about them. I asked that the totals of the fees paid be included in the accounting, along with those brokers/firms to whom they were paid. The VP just said "we don't pay brokerage fees."

After having two other brokers review the statements and the notations, they both unequivocally verified they were indeed brokerage fees, but went on to commented that they were also well above the standard charged in the industry - and these guys both work for brokerage houses!

I might point out here that this bank is a subsidiary of First National of Nebraska, Inc. - and their "services" include an "investment arm." Guess who I'm sure was making the money off of all these often unnecessary trades?

Despite these trades being recorded on the quarterly statements - the bank still denies paying the fees. Early on, they were called by some varying names - in an obvious attempt to be disengenuous. The last couple of years, they say, point blank: "broker fees paid."

We've now sent several letters, demanding that the bank either provide the accounting of the total amount of brokerage fees paid since they took over management, along with who they were paid to, but they still refuse! -We also stated that if they WEREN'T brokerage fees, then explain just what the notation are. Again, they simply ignore it.

We've even written to the lawyer they hired to do the trust taxes and the final estate tax filing. His answer has been the same "the bank doesn't pay brokerage fees."; and no explanation of what the notations are. He apparently can't read

He's another story. They hired him to do the taxes for the trust in 2002; at that time, he apparently contacted the accountant whom he was taking the business away from for copies of the previous filings. After taking over 2 years to get the final tax filing done, he was notified by the IRS that he'd not accounted for a gift tax filing from 2001. His explanation was that the other guy didn't give it to him.

Couple of things about this explanation: 1. Why didn't he go to the bank TRUSTEE to get the files? That's called "due diligence" - which is required for lawyers and the bank itself, in fulfilling their fiduciary responsibility; 2. The other guy DID provide the previous year's gift-tax filing to this lawyer; I believe that would be call a "clue" - perhaps indicating there may have been others... 3. The lawyer's explanation to the IRS was to blame the other guy for the oversight.

Now for the clincher: after paying the lawyer a lump-sum of $13,000 - along with ongoing payments over the past two years to file for a trust the bank claimed he was "quite familiar with" - the bank is charging the trust for the penalties and interest for their lawyer's failing! I've obviously objected and my lawyer has sent a letter demanding the bank and/or the attorney pay the penalties and interest. Not the trust. That was a month ago; haven't heard anything back. -Big surprise.

If those monies had been with a regular brokerage firm and had consistently performed that badly,- and they'd continued to make senseless trades month in and month out, they'd have long since been fired. But not this bank "trust" division. I wouldn't "trust" them to manage a plant.

Adrienne of North Little Rock, AR
As nightmarish as the above account of dealing with FNB is, AKSARBENT can only say that the heirs were lucky it wasn't Bank of America, about which we have heard at least one even worse story.

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