Week 3 Assignment Question 22.10 The reference to the mortgage caused the note to be nonnegotiable here. UCC does allow negotiable instruments to be secured by mortgages, however the negotiability of an instrument is destroyed if it incorporates by reference the terms & conditions of the mortgage. In this case the terms of the mortgage were incorporated into the note and the terms of the payment could not be determined by looking solely at the face of the note itself. Chapter 23.8 Angelini wins because General is not the holder in due course. General is not the holder in due course because they did not acquire the note in good faith.
Mortgage lenders popped up on every corner with aggressive marketing tactics like “teaser” introductory rates (that inevitably ramp up to higher rates and higher payments) and “interest-only” loans with huge balloon payments due at some point in the future. They also made it easy for practically anyone to get a mortgage, with little or low-documentation required. In effect, millions of Americans now held mortgages that they were not sophisticated enough to understand nor wealthy enough to afford. But Wall Street was packaging and selling MBSs at an unbelievable pace. And they were making a tremendous amount of money doing it.
The Fed is able to effectively manipulate the United States money supply in three primary ways: the first was is by setting the federal funds rate. That is the price that banks charge one another for loans. The federal funds rate then directly influences the concession rate: which is the set price that banks may borrow money from the Federal Reserve banks at. Banks are then able to lend to consumers at slightly higher rates, which is one way banks make money. The discount rate, in turn, directly affects the rates at which banks can lend money to its customers.
It uses Public money unnecessarily and is unfair to taxpayers. It makes financial reform going forward much more difficult. Protecting the markets for derivative products like CDOs and CDSs allows for a repeat of the risky practices that got us into the current crisis. And finally, by guaranteeing the corporate existence of large banks, we are maintaining their power and priorities and thus are not likely to see gains on predatory lending, foreclosure abuse, and other areas where reform is sorely needed. If we want to help the people who are suffering in this crisis and recession, then we should make financial policies with them directly in mind.
There were also unethical issues involving the entity that was supposed to secure and watch over those that are investing our money. That entity, known as the Securities and Exchange Commission, failed to properly investigate certain claims that were made against Madoff long before this scheme broke wide open. The SEC was warned numerous times about the inconsistent information from Bernie Madoff. Ethical misconduct within this case has made more investors aware of what is needed besides forking over large sums of money and charitable contributions to someone who claims they are doing the work of the people. Investors now know that it is also their job to challenge and be more “in tune” to what their money is doing and how their money is working.
If this was not the case, Congress would not have enforced the Sarbanes-Oxley Act. In 2002, the financial scandals that occurred by multiple corporations proved that the accounting profession was in dire need of some regulation by the government. I predict that corporate fraud will remain the same based on the research produced during the writing process for this assignment. There is no fool proof way to completely diminish financial fraud or to protect investors. As people as a whole have proven time and time again, there are rules and laws and there are people whom break those rules and laws for personal gain.
White collar crimes and Ponzi schemes seem to be happening more often than not in today’s business world. Our text describes White Collar Crimes as a violation committed by individuals and corporations of fraud, bribery, theft and conspiracy to commit (Melvin, S. P. Z Pg. 555(2011) and Ponzi as a fraudulent investment to make investors or profit holders to pay for their own return on their initial investment. Much like they think they are making money on a product that is being sold to customers, clients and consumers but actually, the people who put in initial investment money is just getting back the same thing they put in or other investors are paying for other investors shares and no one is making any profit. However, since the Sabine-Oxley Act came into play in the early 2000’s investors and shareholders have been protected by these types of schemes and avocations.
The class biased judge or prosecutor, by contrast, is the legal equivalent of going to the casino where the odds inherently favor the house and are unlikely to change. This is not to say that rich people don't commit crimes. They do commit crimes, including violent, sex and drugs crimes, just like poor people do. The difference is that they are treated quite differently than poor people charged with, and convicted of, similar crimes. Just as it has been since the antebellum era, crimes that cross class lines (i.e., ones that rich people often commit too) will never see harsh mandatory minimum sentencing laws.
Also indicates that these conflicts regarding the risk rating agency as well as academics that are paid as consultants without informing you in your trials, obscuring and exacerbating the situation that led to the crisis. The documentary claims that the great risk that began with the subprime credit, was transmitted the investor to investor, due to a questionable classification practice, which falsely indicated that the investments were safe. Thus, lenders were led to sign mortgages without risks to consider, or even favor higher interest rates on loans, because at the time these were classified together, and the risk was hidden. According to the tape, the resulting products have AAA ratings, the same of government bonds issued by the U.S. government, allowing them to sell them even to the pension fund entities that can invest only maximum security. Also note for example that the Harvard economist and former director of
It is linked to drug smuggling, human sex trade, murder, and other crimes, which threatens the safety of the Americans and increase the burden on the US law enforcement system and resources. After a steady annual reduction in crime, the annual FBI Uniform Crime Report reveals a slow but sure yearly increase in crime, especially violent crime. Some criminologists attribute the rise in criminal aliens who come into the US with a criminal background. Many have been incarcerated in federal and state prisons and local jails. Prisons are overcrowded and the cost to incarcerate and maintain them is very high (Kouri).