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Saturday, March 24, 2012

Jon Corzine in Danger of Criminal Charges For False Testimony

The chances of former MF Global CEO Jon Corzine (D-Goldman Sachs) being criminally charged have  never been higher. A memo released by congressional investigators points to a contradiction between Corzine's "direct instructions" (as alleged by an underling) about the transfer of $200 million in customer funds, and his congressional testimony about either not remembering, not recalling or denying the company's use of segregated customer funds for its own operating costs. (See the last full paragraph of page 3 of the memo.)



I was among the first to predict, at the beginning when the MF Global implosion first broke, that Corzine risked indictment, prosecution and ultimate imprisonment, not for financial crimes (which have not been proven and are only suspected by the federal government; a criminal investigation is ongoing) but for obstruction of justice stemming from any "false statement" he could be accused of having said in his Congressional testimony last fall.

The contradictions between that memo and his testimony, without more, could prove the basis for an obstruction of justice charge arising from false statements.  That is, of course, in addition to any other crimes that might be provable.

Eric Dixon is a New York business lawyer who handles investigative matters, securities and regulatory compliance and other matters.  Mr. Dixon is on the board of directors of the financial think tank Financial Policy Council.  Mr. Dixon is also an expert election lawyer and regularly represents candidates for public office, political party committees and other nonprofit organizations.
   

Friday, March 23, 2012

New York Housing Crash Coming?

As I've written about extensively in the past, housing prices could still fall 50% to 80% from current levels!  Housing prices in the New York metropolitan area could be in for a rude crash in the next few years.  But there's one other reason that may surprise you: it's the fact that New York and New Jersey are both judicial foreclosure states.

Many of the regions previously hammered in the housing price crash of the past five years were in states where banks could foreclose without going through the courts.  Many other states require foreclosures to be litigated in the courts.  New York and New Jersey are two of those states.


A foreclosure action takes longer to go through the litigation process, particularly if it is contested.  Many banks are reluctant to push foreclosures because that pushes them closer to the day when they have the real estate back on their books and would be forced to replace the value of the mortgage (which as we all know is inflated above current true value) with the new "book" value of the real estate.  


The banks understandably do not want to realize a loss; however, that day of reckoning can only be delayed and not avoided.  There will be a time when the banks or investors who bought bundles of mortgages (through mortgage-backed securities) want a return on their investment.  A house in foreclosure produces no income; someone is losing money (either the bank or the mortgage-backed security which "owns" the mortgage).  And moving homes through foreclosure gets them to a point where someone, at some price, will buy a property.  The mortgage holder will lose money on the value, but at least the ongoing total loss represented by the zero income from a defaulting borrower will stop.  


For these reasons, there is a foreclosure pipeline jammed with properties not producing income. These properties may inch along like toxic sludge, but they will move.  At some point, investors or banks will want to take anything they can in a foreclosure sale in order to stop the loss. Depending on the magnitude of the foreclosures swamping the market and flooding it with supply, prices may have to plunge precipitiously just to meet the point where demand matches supply.  In this way, the fire sale panic to unload unproductive properties may yield market prices far, far below current levels, never mind the levels of 2006-07.


Throw in the other factors that could affect real estate across the country -- factors to which the New York metropolitan area would hardly be immune -- and you can see how easily home values could drop like the proverbial stone. 





Friday, March 16, 2012

Bias Crime Tyranny: Political Correctness Gone Wild

The Dharun Ravi guilty verdicts today pose a new and dangerous threat to the basic constitutional freedoms we thought we enjoyed.

The successful prosecution and conviction of an 18-year-old student for operating a webcam within his own shared dorm room will now embolden the politically correct authorities, whose abuse of power knows no limits, to go after and target for intimidation and prosecution all manner of personal and political enemies.

Make no mistake, this prosecution wasn't about a webcam. That was a pretext. The real, unstated crime was that Dharun Ravi was insufficiently hospitable to or accepting of his gay roommate Tyler Clementi. End of story.
Intolerance is an unfortunate part of life. We cannot compel others to like, or accept, us. (Think that's unfair? Think about a time when you broke off a relationship.) But it is far from clear that intolerance was present here, and even if it were, that should not be a crime.

Society cannot make everyone who rejects us, who disapproves of us, into a criminal. Part of being an adult is accepting the rejection of others. (Some, like Andrew Breitbart, embrace the rejection.). Worse, there are some bullies who enterprisingly have learned to market themselves as victims, both to cash in and to use lawsuits and criminal complaints as weapons to intimidate opposition (economic, political or social) into silence, invisibility or noncompetition.

The danger of the Dharun Ravi verdict is this. If you hold personal or political views that a prosecutor disagrees with, or simply because you are a target of personal or professional envy, these vague laws can be used to intimidate you into withdrawing from civic and public life, and even to interfere with your business and wholly personal activities.

So-called bias crime laws will now be more aggressively used to compel your acceptance of behaviors with which you may, as a matter of personal and religious conscience, disagree. But acceptance may not be enough. You may be required to publicly endorse this behavior, publicly denounce or denigrate your own behavior, and give preferential treatment to certain favored or "special" groups, lest you be accused of a bias crime.

Today, New Jersey moved one step closer to a state where freedom depends on the arbitrary capriciousness of unelected, unaccountable prosecutors and judges.
Eric Dixon is a New York lawyer.   

Thursday, March 15, 2012

If We're Forced to Pay For Sandra Fluke's Birth Control, What's Next?

In the interest of serving the audience, I reprise my February 28th satire on this shameful Sandra Fluke controversy.  At its core, the issue is the government's attempt to mug us, and the culture of entitlement that has led a generation to shamelessly demand that the rest of us pay for what they want.

Remember: For every entitlement, there is a corresponding obligation.

For everyone who feels entitled, there is someone else upon whom they will stick the bill.

This is why we have a $15 trillion national debt.  

Wednesday, March 14, 2012

Financial Crisis Handmaidens Escaping Justice?

The 2008-09 financial crisis was likely caused by intentional  bad conduct.  Some of this conduct may have been illegal and caused by more than mere negligence, stupidity or ignorance (none of which should constitute crimes).

Here is the audio link to my guest appearance on last night's radio program "Expert Witness With Mike Levine," which addressed the causes of the financial crisis and roadblocks to more prosecutions (civil and criminal) of intentional misconduct that led to -- or was revealed by -- the crisis.

Eric Dixon is a New York securities and corporate lawyer who handles investigations, compliance, management issues and election law matters.  Mr. Dixon also engages in financial analysis and comments regularly on economic and legal issues. 


Saturday, March 10, 2012

Criminalizing Your Opponents

America is becoming an increasing warren of overcriminalization.  Between a thicket of laws designed to impose criminal liability in the absence of criminal intent (actually meaning to do a wrong), and people in business and politics desiring the nuclear bomb of imprisonment as a means of winning the competition (either in the marketplace of commerce or of ideas), being an American of any stature increasingly means risking your freedom and becoming a target of overzealous opponents who seem not to know any value in the discretion over the use of power.

The utter gutlessness of Americans intolerant of anyone with whom they disagree may have hit a new low this week with feminist lawyer Gloria Allred's call for the criminal prosecution of radio talk host Rush Limbaugh for his radio show diatribe attacking Georgetown Law School student / reproductive rights activist Sandra Fluke.

(Interestingly, Allred relies on a 19th Century Florida misdemeanor statute that criminalizes the act of impugning the integrity of a woman.  This statute surely was designed and used to criminalize all sorts of undesirables -- specifically, African-Americans -- and such a statute drafted today would probably be rapidly declared unconstitutional.  I would expect -- and predict -- its swift appeal.  But note how a feminist activist uses a tool of racists to achieve the objective: oppose the feminist agenda at your own risk, that of your freedom.

George Washington Law School professor Jonathan Turley also chimes in on the Western world's criminalization of speech here.  Before you dismiss his claims as covering just other countries without our Constitution, consider the current New Jersey criminal trial of Dharan Ravi, who may end up going to jail for hypertechnical violations of cyberspying statutes, when his real crime (unstated) is the arguable and debatable intolerance of a gay dormmate, Tyler Clementi, who committed suicide last year.  

The use of criminal statutes to intimidate one's opponents or competitors into silence or surrender has chilling implications for our society.  A society is not free when the exercise of basic constitutional rights carries the risk of the loss of liberty.  

One final point: The Rush Limbaugh / Sandra Fluke controversy is not about women's rights.  That is an artful deception, designed by feminists who understand that using something -- the health issue -- which one cannot rightfully oppose, as a cover for a bigger objective of forcing religious insitutions to ignore their own doctrine and endorse (not merely accept or obey) activities they oppose as a matter of doctrine and conscience.  The controversy stems from the ObamaCare mandate that religious institutions provide health insurance to employees which covers the entire cost of contraceptives, irrespective of the institutions' religious doctrine. 

Such a mandate clearly attacks religion. The only way for a religious institution to avoid the mandate is to cease the activity that requires employees. This would require the institution to close, to withdraw from public life and from service to the community.  In short, to avoid the mandate, religious institutions would have to close and confine their activities thereafter solely to worship. You can see how the mandate is part of a plan to attack religion in general, to either compromise religious teachings conflicting with sexual and feminist dogma or to punish religions which do not retreat from public life and surrender their spot to those who do advance the feminist agenda.

The attack on religion is clear. 

Moreover, the demand that others pick up the subsidy for others' use of contraception dissolves at its core into a demand for an entitlement, that some people receive an entitlement for recreation that is paid for by a corresponding obligation picked up by others. 

In light of this, I have disagreed with those advertisers who boycotted Rush Limbaugh's radio show.  I personally took out an advertisement on his radio show this past week, to show support both for the freedom of speech and the freedom of religion, and to criticize this woman's greed which personifies the toxic culture of entitlement that is drowning our society in a $15 trillion national debt.

The clip of my ad on the Limbaugh show last week follows.   

video

Eric Dixon is a New York lawyer.