Customer Deposits Are Property of the Bank: Close Your Account NOW

[Godwit]

ok, as a caveat, this is on some tinfoily sites and this comes from occupy corpratism. the source may upset some. i dunno really, but anyway.....


i don't really understand all of this and it sounds pretty bad, but since finance isn't one the light bulbs i posses, i wondered if others that DO have financial comprehension could explain to those of us that don't. is this a new thing? is this as bad as this article makes it sound?

thanks

http://occupycorporatism.com/custome...r-account-now/

In June of 2012, Eric Bloom, former chief executive, and Charles Mosely, head trader of Sentinel Management Group (SMG) were indicted for stealing $500 million in customer secured funds. Both Mosely and Bloom were accused of “exposing” customer segregated funds “to a portfolio of highly risky derivatives.”
These customer funds were used to “back up personal investments” which were part of “collateral for a loan from Bank of New York Mellon” (BNYM). This loan derived from stolen customer monies was “used to purchase millions of dollars worth of high-risk, illiquid securities, including collateralized debt obligations, or CDOs, for a trading portfolio that benefited Sentinel’s officers, including Mosley, Bloom and certain Bloom family members.”
Fast forward to August 9th of 2012, and the 7th Circuit Court of Appeals (CCA) rules that BNYM can be moved to first in line of creditors over the customers that had their funds stolen by SMG.
When a banking customer deposits their money into their bank account, the Federal Deposit Insurance Corporation (FDIC) and Securities Investor Protection Corporation (SPIC) are in place to protect the customer from fraud or theft. The ruling from the CCA means that these regulatory systems will not insure customer funds, investments, depositors and retirees who hold accounts in banks. In fact, the banking institution is now legally allowed to use those customer funds deposited as collateral, payment on debts for loans made, or free use on the stock market to purchase investments as the bank sees fit.
Fred Grede, SMG trustee, explained that brokers are no longer required to keep customer money separate from their own. “It does not bode well for the protection of customer funds.”......

more at the site

Applies to brokers, in certain types of transactions, not banks. Bank deposits are still protected by FDIC.

[recorderguy]

It is true, and it is bad. Article in linked thread below to non woo woo site. Barnhardt.biz The scorned trader turned blogger/whistleblower

If you don't actually hold it, you don't own it. Hundreds of years of contract law...poof.

It was discussed here: http://thetreeofliberty.com/vb/showthread.php?t=167994


Two take away quotes from the above thread:

Originally Posted by FaithfulSkeptic
So let me see if I can use an example to make sure I understand this, and people here can tell me if I'm wrong.

A company is in business storing antique cars. The company one day decides to engage in a side business of manufacturing kayaks. They need $500,000 to get the kayak business rolling, but only have $20,000 capital on hand from the car storage. Seeking a loan from a bank, they're at first declined because they have no capital, but later the loan is issued ... using the customer's antique cars as collateral.

The kayak business doesn't do so well, is shut down, and now they can't pay off the bank loan. They're forced into bankruptcy and the bank claims first dibs on the antique cars as they were the agreed upon collateral. The owners of the vehicles protest when they find the doors locked, and an appellate court judge rules that the bank has the right to liquidate the cars to recover it's loan.

Am I understanding it correctly ?

Originally Posted by Shane
I think you nailed it well, the company had no right putting the cars up for collateral, the bank had no right accepting them, and the govt had no right
not putting them all in jail for fraud and making the car owners whole again.

The cars are all of our assets held by any institution in fiduciary trust that they won't misuse them or put them at risk without our explicit pre-approval and assumption that if they did we'd have recourse via the courts and perps would be dissuaded from ever doing so from fear of conviction & imprisonment.

None of the above is assured anymore, the only thing that has not changed is that most all people's lifetime of hard earned wealth is now at grave risk, maybe not out of site and gone yet, but majestically flying along in a beautiful and rare antique classic automobile, headed full speed towards the cliffs edge.

- Shane

[TomNTam]

The FDIC is like everything else that the govt. has touched, And hence, how could they ever cover all the deposits in the banks across the nation, when they don't even have enough to cover 1 of the five major banks closing. This is end game times, but most will listen to the people touting, all is well. FDIC is another sick joke, and has as much chance of covering your account during a collapse as the Congress that stole all the social security fund, and replaced them with IOUs, paying that back. Happy days, right.

[mg]

The FDIC is like everything else that the govt. has touched, And hence, how could they ever cover all the deposits in the banks across the nation, when they don't even have enough to cover 1 of the five major banks closing. This is end game times, but most will listen to the people touting, all is well. FDIC is another sick joke, and has as much chance of covering your account during a collapse as the Congress that stole all the social security fund, and replaced them with IOUs, paying that back. Happy days, right.

The FDIC has been out of money for years. People are getting a few hundred dollars a month on the loss of insured deposits. My bank told me this (although I already knew it) when they tried to get me to put the proceeds from the sale of my house in their securities subsidiary. Don't make me laugh, I said.

[Irishamerican]

The FDIC has been out of money for years.

People are getting a few hundred dollars a month on the loss of insured deposits.


My bank told me this (although I already knew it) when they tried to get me to put the proceeds from the sale of my house in their securities subsidiary. Don't make me laugh, I said.

Anybody else hear anything similar to this?

[packyderms_wife]

The FDIC is like everything else that the govt. has touched, And hence, how could they ever cover all the deposits in the banks across the nation, when they don't even have enough to cover 1 of the five major banks closing. This is end game times, but most will listen to the people touting, all is well. FDIC is another sick joke, and has as much chance of covering your account during a collapse as the Congress that stole all the social security fund, and replaced them with IOUs, paying that back. Happy days, right.

And people wonder why Romney has his money in swiss bank accounts, which are backed by gold???

[nvscanman]

To date....the private funds being used as collateral for bad investments were funds
that were placed in investment instruments at a brokerage. Not money deposited into
a bank savings or checking account. There is a difference. Now.....having said that,
just because a judge has not to date allowed a bank to take money from a personal
checking or savings account to satisfy an obligation or a debt that the owner of said
account has no relation to does not mean such a thing could not happen and could not
be held legal by a black robed pirate. Just because it hasn't happened yet does not
mean it won't happen soon. The goal of the powerful few who pull the strings on
Wall St and in big banking is to acquire ALL of the wealth...EVERYWHERE. That means
that money an ordinary person has deposited into a bank or CU is fair game to them.
If they can find a way to steal and make it look legit or buy off a judge to let them steal it they will.

[PyratePrincess]

To date....the private funds being used as collateral for bad investments were funds
that were placed in investment instruments at a brokerage. Not money deposited into
a bank savings or checking account. There is a difference. Now.....having said that,
just because a judge has not to date allowed a bank to take money from a personal
checking or savings account to satisfy an obligation or a debt that the owner of said
account has no relation to does not mean such a thing could not happen and could not
be held legal by a black robed pirate. Just because it hasn't happened yet does not
mean it won't happen soon. The goal of the powerful few who pull the strings on
Wall St and in big banking is to acquire ALL of the wealth...EVERYWHERE. That means
that money an ordinary person has deposited into a bank or CU is fair game to them.
If they can find a way to steal and make it look legit or buy off a judge to let them steal it they will.

^^^This^^^

As with most everything else these days: If you don't physically have it, you may never get it.

[hbg]

To date....the private funds being used as collateral for bad investments were funds
that were placed in investment instruments at a brokerage. Not money deposited into
a bank savings or checking account. There is a difference. Now.....having said that,
just because a judge has not to date allowed a bank to take money from a personal
checking or savings account to satisfy an obligation or a debt that the owner of said
account has no relation to does not mean such a thing could not happen and could not
be held legal by a black robed pirate. Just because it hasn't happened yet does not
mean it won't happen soon. The goal of the powerful few who pull the strings on
Wall St and in big banking is to acquire ALL of the wealth...EVERYWHERE. That means
that money an ordinary person has deposited into a bank or CU is fair game to them.
If they can find a way to steal and make it look legit or buy off a judge to let them steal it they will.

It already HAS happened. Look up the world's fair debacle in...tenn or kty... back in the 20s/30s time frame if mem serves. Folks that had withdrew money from savings several months prior to banking issues were forced to "repay money" because it was not theirs per the court and reclaimed for purpose of settling the banks debts...:-/

[niceguy]

It already HAS happened. Look up the world's fair debacle in...tenn or kty... back in the 20s/30s time frame if mem serves. Folks that had withdrew money from savings several months prior to banking issues were forced to "repay money" because it was not theirs per the court and reclaimed for purpose of settling the banks debts...:-/

You really are going to have to do better than that, if you expect anybody to "look it up". Until then, it's just something somebody said on the internet.