The Tennessee Department of Environment and Conservation deputy director Sherwin Smith is warning citizens to think before they start raising concerns about water quality because they could be charged with making terroristic threats. Smith told Maury County resident that unfounded complaints could be considered an “act of terrorism” and turned over the the police and the FBI. The meeting followed complaints about water quality in Mt. Pleasant, Tennessee where children have become ill drinking the water. That left residents with the sense that they were being given a Sophie’s Choice by the TDEC: live with sick children or face a possible charge of being a terrorist.
Smith warned residents “you need to make sure that when you make water quality complaints you have a basis, because federally, if there’s no water quality issues, that can be considered under homeland security an act of terrorism.” One audience member seemed to be in disbelief and asked “Can you say that again, please?” Smtih then repeated the warning.
The residents know something about terror. Joycelene Johns, 68, says that she has had no choice but to drink the cloudy, odd-tasting water for years. She added “I’ll drink it. but I pray before the first sip.”
The comments reflect a fear that the war on terror, like Saturn, inevitably devours its own. Criticism of the government is now viewed as a potentially terrorist act in our new society. The TDEC appears to be paraphrasing Shakespeare’s Julius Caesar: “The fault, dear Joycelene, is not in our water, But in ourselves.”
Of course, the worse thing is if Johns is arrested and water-boarded with the same contaminated water. The least they could do is use some bottled water so not to add insult to injury.
Source: Tennessee
Rafflaw, Os…What were slccobra’s comments? I looked for them but couldn’t find them. Guess WE’RE being censored, too. (Pardon, perhaps I should have said ‘moderated’. Same thing.)
Well, it looks like that last link has the guts of my post in it.
WP must have pickup some copyright concern?
Damn, it won’t post the guts of the piece. 😉
Meeting government standards does not mean that the water is safe.
They don’t test for everything that is harmful, just the things the government has identified.
I refused to drink the water at my mother’s house. All water used for drinking and cooking was distilled. Unfortunately, my distiller couldn’t handle the additional for washing dishes and people.
In brief, it seems that Sentinel improperly moved customer assets from segregated accounts to lienable accounts and then used its lien to pledge these assets as collateral against various repo positions in its proprietary trading accounts. When the repo market seized in the summer of 2007, Sentinel found itself having to place ever more collateral with its bank, the Bank of New York, to raise cash as the repo transactions matured, which it accomplished by raiding ever more customer accounts.
When Sentinel collapsed, Bank of New York claimed that their secured claim to the pledged assets (formerly in segregated accounts) had priority over the unsecured claims of Sentinel’s customers. The court agreed, despite the facts that: a) Sentinel’s moving the assets from segregated accounts to lienable account was illegal and contrary to its customer agreement, b) Sentinel’s using segregated customer assets as collateral to the Bank of New York was expressly forbidden by the agreement between the two parties, and c) internal Bank of New York emails showed that bank officers knew that the collateral being posted was originating from segregated accounts.
It seems, as a matter of law, that even though the CEO and head trader at Sentinel were convicted of fraud for the co-mingling of the clients’ segregated assets (proving this was fraud), the assets themselves nevertheless ended up at the Bank of New York. The customers can only look to the shell of Sentinel for recovery and, of course, there are little or no assets remaining in that entity. The Bank of New York was made whole, but the client assets were vaporized.
It is the above situation that I wish to avoid, and I am curious you have or can construct what is, in effect, a legal lock-box whereby even if the assets were fraudulently moved to another entity, I would be able to recover them from that entity.
Given the above, a few questions:
1) Are assets held in a segregated manner?
2) Please let me know what, if any, proprietary trading your firm engages in (that is, I would like to assess any motivation that might possibly arise to raid customer assets for collateral, or any other, purposes).
3) Though I am not an expert in the area of law discussed above, it appears to me that the issue in the Sentinel case hinged on that fact that the Bank of New York was a secured creditor and the customers, albeit owed a duty, were unsecured. I wonder if your firm were to grant me a first priority lien over my assets, it would defeat the ability to use the assets for nefarious purposes or, if they were so used, I would have a superior claim to retrieve them. I understand that in paragraph 4 of your account agreement, customers grant you a continuing security interest in their assets to make sure they pay their bills. I would propose that this lien be limited to the amount of debts, if any, owed to you, and the balance of the assets be subject to a first priority lien back to the fund or an affiliated company. Please let me know if you have thoughts on this structure.
5) My recollection is that JP Morgan is your main sub-custodian. Since JP Morgan is also the major player in the derivatives market and has been at the center of many of the recent scandals involving the vaporization of assets, this relationship makes me uneasy (especially given my understanding that the 2005 Bankruptcy Act specifically exempts claims involving derivatives from the automatic stay, meaning, like Bank of New York above, under certain conditions JPM can attach collateral with no legal process and without the possibility of claw-back, as the customers of MF Global are now discovering). Is your custodian agreement with JPM a matter of public record? I would be very interested to see it. And, I would want to understand the issues discussed above in terms of the potential vaporization of your firm’s assets at the JPM level, i.e., the possibility of assets disappearing to some other counter-party notwithstanding your presumed agreement with JPM that they not be used as collateral (as what happened to Sentinel’s customers).
I appreciate your time in considering these issues, and I look forward to discussing.
NB: the article enclosed above discusses the legal principle, which goes all the way back to Rome: nemo dat quod non habet (one cannot give what one does not have), in order words, the thief cannot pass good title. If A steals B’s watch and sells it to C, B recovers the watch free and clear from C (because title was never passed), and C can only look to A for restitution of this purchase price (good luck to C!). The author of the article thinks Sentinel was like A, stealing B’s assets to pledge to C.
It appears the court in the Sentinel case ruled that broker-dealers are in the role of trustees. A trustee has the legal authority to alienate assets – i.e., he can pass title. The beneficiary of a trust, if defrauded by the trustee, cannot go after the recipient of the property, because the recipient has good title (unless part of a conspiracy). The beneficiary can only go after the assets of the trustee, which in this situation is always zero.
I hope that clarifies the legal situation of brokerage firms as interpreted by the Seventh Circuit Court of Appeal.
2 of 2
WP problem?
http://www.acting-man.com/?p=19030
And this article discussing the implications:
(Link removed here)
In brief, it seems that Sentinel improperly moved customer assets from segregated accounts to lienable accounts and then used its lien to pledge these assets as collateral against various repo positions in its proprietary trading accounts. When the repo market seized in the summer of 2007, Sentinel found itself having to place ever more collateral with its bank, the Bank of New York, to raise cash as the repo transactions matured, which it accomplished by raiding ever more customer accounts.
When Sentinel collapsed, Bank of New York claimed that their secured claim to the pledged assets (formerly in segregated accounts) had priority over the unsecured claims of Sentinel’s customers. The court agreed, despite the facts that: a) Sentinel’s moving the assets from segregated accounts to lienable account was illegal and contrary to its customer agreement, b) Sentinel’s using segregated customer assets as collateral to the Bank of New York was expressly forbidden by the agreement between the two parties, and c) internal Bank of New York emails showed that bank officers knew that the collateral being posted was originating from segregated accounts.
It seems, as a matter of law, that even though the CEO and head trader at Sentinel were convicted of fraud for the co-mingling of the clients’ segregated assets (proving this was fraud), the assets themselves nevertheless ended up at the Bank of New York. The customers can only look to the shell of Sentinel for recovery and, of course, there are little or no assets remaining in that entity. The Bank of New York was made whole, but the client assets were vaporized.
It is the above situation that I wish to avoid, and I am curious you have or can construct what is, in effect, a legal lock-box whereby even if the assets were fraudulently moved to another entity, I would be able to recover them from that entity.
Given the above, a few questions:
1) Are assets held in a segregated manner?
2) Please let me know what, if any, proprietary trading your firm engages in (that is, I would like to assess any motivation that might possibly arise to raid customer assets for collateral, or any other, purposes).
3) Though I am not an expert in the area of law discussed above, it appears to me that the issue in the Sentinel case hinged on that fact that the Bank of New York was a secured creditor and the customers, albeit owed a duty, were unsecured. I wonder if your firm were to grant me a first priority lien over my assets, it would defeat the ability to use the assets for nefarious purposes or, if they were so used, I would have a superior claim to retrieve them. I understand that in paragraph 4 of your account agreement, customers grant you a continuing security interest in their assets to make sure they pay their bills. I would propose that this lien be limited to the amount of debts, if any, owed to you, and the balance of the assets be subject to a first priority lien back to the fund or an affiliated company. Please let me know if you have thoughts on this structure.
5) My recollection is that JP Morgan is your main sub-custodian. Since JP Morgan is also the major player in the derivatives market and has been at the center of many of the recent scandals involving the vaporization of assets, this relationship makes me uneasy (especially given my understanding that the 2005 Bankruptcy Act specifically exempts claims involving derivatives from the automatic stay, meaning, like Bank of New York above, under certain conditions JPM can attach collateral with no legal process and without the possibility of claw-back, as the customers of MF Global are now discovering). Is your custodian agreement with JPM a matter of public record? I would be very interested to see it. And, I would want to understand the issues discussed above in terms of the potential vaporization of your firm’s assets at the JPM level, i.e., the possibility of assets disappearing to some other counter-party notwithstanding your presumed agreement with JPM that they not be used as collateral (as what happened to Sentinel’s customers).
I appreciate your time in considering these issues, and I look forward to discussing.
NB: the article enclosed above discusses the legal principle, which goes all the way back to Rome: nemo dat quod non habet (one cannot give what one does not have), in order words, the thief cannot pass good title. If A steals B’s watch and sells it to C, B recovers the watch free and clear from C (because title was never passed), and C can only look to A for restitution of this purchase price (good luck to C!). The author of the article thinks Sentinel was like A, stealing B’s assets to pledge to C.
It appears the court in the Sentinel case ruled that broker-dealers are in the role of trustees. A trustee has the legal authority to alienate assets – i.e., he can pass title. The beneficiary of a trust, if defrauded by the trustee, cannot go after the recipient of the property, because the recipient has good title (unless part of a conspiracy). The beneficiary can only go after the assets of the trustee, which in this situation is always zero.
I hope that clarifies the legal situation of brokerage firms as interpreted by the Seventh Circuit Court of Appeal.
2 of 2
And this article discussing the implications:
http://www.acting-man.com/?p=19030
In brief, it seems that Sentinel improperly moved customer assets from segregated accounts to lienable accounts and then used its lien to pledge these assets as collateral against various repo positions in its proprietary trading accounts. When the repo market seized in the summer of 2007, Sentinel found itself having to place ever more collateral with its bank, the Bank of New York, to raise cash as the repo transactions matured, which it accomplished by raiding ever more customer accounts.
When Sentinel collapsed, Bank of New York claimed that their secured claim to the pledged assets (formerly in segregated accounts) had priority over the unsecured claims of Sentinel’s customers. The court agreed, despite the facts that: a) Sentinel’s moving the assets from segregated accounts to lienable account was illegal and contrary to its customer agreement, b) Sentinel’s using segregated customer assets as collateral to the Bank of New York was expressly forbidden by the agreement between the two parties, and c) internal Bank of New York emails showed that bank officers knew that the collateral being posted was originating from segregated accounts.
It seems, as a matter of law, that even though the CEO and head trader at Sentinel were convicted of fraud for the co-mingling of the clients’ segregated assets (proving this was fraud), the assets themselves nevertheless ended up at the Bank of New York. The customers can only look to the shell of Sentinel for recovery and, of course, there are little or no assets remaining in that entity. The Bank of New York was made whole, but the client assets were vaporized.
It is the above situation that I wish to avoid, and I am curious you have or can construct what is, in effect, a legal lock-box whereby even if the assets were fraudulently moved to another entity, I would be able to recover them from that entity.
Given the above, a few questions:
1) Are assets held in a segregated manner?
2) Please let me know what, if any, proprietary trading your firm engages in (that is, I would like to assess any motivation that might possibly arise to raid customer assets for collateral, or any other, purposes).
3) Though I am not an expert in the area of law discussed above, it appears to me that the issue in the Sentinel case hinged on that fact that the Bank of New York was a secured creditor and the customers, albeit owed a duty, were unsecured. I wonder if your firm were to grant me a first priority lien over my assets, it would defeat the ability to use the assets for nefarious purposes or, if they were so used, I would have a superior claim to retrieve them. I understand that in paragraph 4 of your account agreement, customers grant you a continuing security interest in their assets to make sure they pay their bills. I would propose that this lien be limited to the amount of debts, if any, owed to you, and the balance of the assets be subject to a first priority lien back to the fund or an affiliated company. Please let me know if you have thoughts on this structure.
5) My recollection is that JP Morgan is your main sub-custodian. Since JP Morgan is also the major player in the derivatives market and has been at the center of many of the recent scandals involving the vaporization of assets, this relationship makes me uneasy (especially given my understanding that the 2005 Bankruptcy Act specifically exempts claims involving derivatives from the automatic stay, meaning, like Bank of New York above, under certain conditions JPM can attach collateral with no legal process and without the possibility of claw-back, as the customers of MF Global are now discovering). Is your custodian agreement with JPM a matter of public record? I would be very interested to see it. And, I would want to understand the issues discussed above in terms of the potential vaporization of your firm’s assets at the JPM level, i.e., the possibility of assets disappearing to some other counter-party notwithstanding your presumed agreement with JPM that they not be used as collateral (as what happened to Sentinel’s customers).
I appreciate your time in considering these issues, and I look forward to discussing.
NB: the article enclosed above discusses the legal principle, which goes all the way back to Rome: nemo dat quod non habet (one cannot give what one does not have), in order words, the thief cannot pass good title. If A steals B’s watch and sells it to C, B recovers the watch free and clear from C (because title was never passed), and C can only look to A for restitution of this purchase price (good luck to C!). The author of the article thinks Sentinel was like A, stealing B’s assets to pledge to C.
It appears the court in the Sentinel case ruled that broker-dealers are in the role of trustees. A trustee has the legal authority to alienate assets – i.e., he can pass title. The beneficiary of a trust, if defrauded by the trustee, cannot go after the recipient of the property, because the recipient has good title (unless part of a conspiracy). The beneficiary can only go after the assets of the trustee, which in this situation is always zero.
I hope that clarifies the legal situation of brokerage firms as interpreted by the Seventh Circuit Court of Appeal.
1 of 2
I don’t know where to post this, but I think it’s important info about your finances you/we all should be thinking about.
Banks/Govt policies on seizing your assets/pensions/etc..
***
Posted June 21st, 2013 at 7:05 AM (CST) by Jim Sinclair & filed under General Editorial.
Dear CIGAs,
Here is a comment on the Sentinel Decision. This is extremely important for you to read. It can affect your brokerage accounts as it was earth shaking as a decision against the client’s interests.
Jim,
I am a former lawyer, and I thought relating to your query you might find the email below that I sent to a potential custodian instructive.
All best,
CIGA Anonymous
Dear Sam,
As discussed, my investment thesis is based on the view that there is excess societal debt and as this debt level declines (as it must, through either inflation, default, or both) gold will increase in value. Part of this credit bubble exists as a natural by-product of the fractional reserve banking system, of which the hyper-hypothethication of assets by the brokerage industry is but one outgrowth. It is this latter phenomenon that, I believe, threatens the integrity of the fund’s ownership of its assets, as the recent “vaporization” of assets at various brokerage firms attests.
I read with interest both the recent Federal Appeals Court decision in the Sentinel Case, available here:
http://dl.dropbox.com/u/32961642/SentinelRuling.pdf
I don’t know where to post this, but I think it’s important info about your finances you/we all should be thinking about.
Banks/Govt policies on seizing your assets/pensions/etc..
***
Posted June 21st, 2013 at 7:05 AM (CST) by Jim Sinclair & filed under General Editorial.
Dear CIGAs,
Here is a comment on the Sentinel Decision. This is extremely important for you to read. It can affect your brokerage accounts as it was earth shaking as a decision against the client’s interests.
Jim,
I am a former lawyer, and I thought relating to your query you might find the email below that I sent to a potential custodian instructive.
All best,
CIGA Anonymous
Dear Sam,
As discussed, my investment thesis is based on the view that there is excess societal debt and as this debt level declines (as it must, through either inflation, default, or both) gold will increase in value. Part of this credit bubble exists as a natural by-product of the fractional reserve banking system, of which the hyper-hypothethication of assets by the brokerage industry is but one outgrowth. It is this latter phenomenon that, I believe, threatens the integrity of the fund’s ownership of its assets, as the recent “vaporization” of assets at various brokerage firms attests.
I read with interest both the recent Federal Appeals Court decision in the Sentinel Case, available here:
http://dl.dropbox.com/u/32961642/SentinelRuling.pdf
And this article discussing the implications:
http://www.acting-man.com/?p=19030
In brief, it seems that Sentinel improperly moved customer assets from segregated accounts to lienable accounts and then used its lien to pledge these assets as collateral against various repo positions in its proprietary trading accounts. When the repo market seized in the summer of 2007, Sentinel found itself having to place ever more collateral with its bank, the Bank of New York, to raise cash as the repo transactions matured, which it accomplished by raiding ever more customer accounts.
When Sentinel collapsed, Bank of New York claimed that their secured claim to the pledged assets (formerly in segregated accounts) had priority over the unsecured claims of Sentinel’s customers. The court agreed, despite the facts that: a) Sentinel’s moving the assets from segregated accounts to lienable account was illegal and contrary to its customer agreement, b) Sentinel’s using segregated customer assets as collateral to the Bank of New York was expressly forbidden by the agreement between the two parties, and c) internal Bank of New York emails showed that bank officers knew that the collateral being posted was originating from segregated accounts.
It seems, as a matter of law, that even though the CEO and head trader at Sentinel were convicted of fraud for the co-mingling of the clients’ segregated assets (proving this was fraud), the assets themselves nevertheless ended up at the Bank of New York. The customers can only look to the shell of Sentinel for recovery and, of course, there are little or no assets remaining in that entity. The Bank of New York was made whole, but the client assets were vaporized.
It is the above situation that I wish to avoid, and I am curious you have or can construct what is, in effect, a legal lock-box whereby even if the assets were fraudulently moved to another entity, I would be able to recover them from that entity.
Given the above, a few questions:
1) Are assets held in a segregated manner?
2) Please let me know what, if any, proprietary trading your firm engages in (that is, I would like to assess any motivation that might possibly arise to raid customer assets for collateral, or any other, purposes).
3) Though I am not an expert in the area of law discussed above, it appears to me that the issue in the Sentinel case hinged on that fact that the Bank of New York was a secured creditor and the customers, albeit owed a duty, were unsecured. I wonder if your firm were to grant me a first priority lien over my assets, it would defeat the ability to use the assets for nefarious purposes or, if they were so used, I would have a superior claim to retrieve them. I understand that in paragraph 4 of your account agreement, customers grant you a continuing security interest in their assets to make sure they pay their bills. I would propose that this lien be limited to the amount of debts, if any, owed to you, and the balance of the assets be subject to a first priority lien back to the fund or an affiliated company. Please let me know if you have thoughts on this structure.
5) My recollection is that JP Morgan is your main sub-custodian. Since JP Morgan is also the major player in the derivatives market and has been at the center of many of the recent scandals involving the vaporization of assets, this relationship makes me uneasy (especially given my understanding that the 2005 Bankruptcy Act specifically exempts claims involving derivatives from the automatic stay, meaning, like Bank of New York above, under certain conditions JPM can attach collateral with no legal process and without the possibility of claw-back, as the customers of MF Global are now discovering). Is your custodian agreement with JPM a matter of public record? I would be very interested to see it. And, I would want to understand the issues discussed above in terms of the potential vaporization of your firm’s assets at the JPM level, i.e., the possibility of assets disappearing to some other counter-party notwithstanding your presumed agreement with JPM that they not be used as collateral (as what happened to Sentinel’s customers).
I appreciate your time in considering these issues, and I look forward to discussing.
NB: the article enclosed above discusses the legal principle, which goes all the way back to Rome: nemo dat quod non habet (one cannot give what one does not have), in order words, the thief cannot pass good title. If A steals B’s watch and sells it to C, B recovers the watch free and clear from C (because title was never passed), and C can only look to A for restitution of this purchase price (good luck to C!). The author of the article thinks Sentinel was like A, stealing B’s assets to pledge to C.
It appears the court in the Sentinel case ruled that broker-dealers are in the role of trustees. A trustee has the legal authority to alienate assets – i.e., he can pass title. The beneficiary of a trust, if defrauded by the trustee, cannot go after the recipient of the property, because the recipient has good title (unless part of a conspiracy). The beneficiary can only go after the assets of the trustee, which in this situation is always zero.
I hope that clarifies the legal situation of brokerage firms as interpreted by the Seventh Circuit Court of Appeal.
My system has inadvertently collected Cholera and Dysentery which makes me a terrorist?
Smith should go to work for NSA
“Dissent will not be tolerated” is a prime indicator of fascism in particular and authoritarianism in general.
However, the right to dissent was part and parcel at the heart of the Founders deploying the 1st Amendment.
As a matter of logic, equating a complaint to terrorism is not just a false equivalence, it’s irrational gibberish.
Water quality isn’t the only thing being eroded away here.
It’s time for every citizen in that town to complain about their concerns for the water quality and dare the city to come after them for making a terrorist threat.
Statements such as Sherwin’s make me 10 times more likely to suspect there is some coverup going on and the usual small town mantra of attacking the whistleblower is in pre-emptive mode.
Jill:
“wide range of “reportable” suspicious behaviors, including working outside of normal duty hours.”
I have to laugh at that. Now government employees have a reason to be sloughful; National Security.
I can see the posters now: High Productivity Sinks Ships. Dont Work Late!
I am going to retire and find a small island somewhere away from the insanity.
What rafflaw said. I have seen more offensive comments, but fortunately very seldom. I truly fail to see why some people are more comfortable wallowing in a verbal sewer than engage in civil conversation.
slccobra,
your comment is inappropriate and disgusting.
FYI: “An online tutorial titled “Treason 101” teaches Department of Agriculture and National Oceanic and Atmospheric Administration employees to recognize the psychological profile of spies.
A Defense Security Service online pamphlet lists a wide range of “reportable” suspicious behaviors, including working outside of normal duty hours. While conceding that not every behavior “represents a spy in our midst,” the pamphlet adds that “every situation needs to be examined to determine whether our nation’s secrets are at risk.”
Read more here: http://www.miamiherald.com/2013/06/20/3461821_p4/obamas-crackdown-views-leaks-as.html#storylink=cpy
I know what to do go to his building and burn it with him in it as he is breaking all laws as to the real US and he is the new breen of traitor all just little people with little minds just like Adolf Hitler. How very sick the all need to be exterminated
“By Marisa Taylor and Jonathan S. Landay
McClatchy Washington Bureau
WASHINGTON — Even before a former U.S. intelligence contractor exposed the secret collection of Americans’ phone records, the Obama administration was pressing a government-wide crackdown on security threats that requires federal employees to keep closer tabs on their co-workers and exhorts managers to punish those who fail to report their suspicions.
President Barack Obama’s unprecedented initiative, known as the Insider Threat Program, is sweeping in its reach. It has received scant public attention even though it extends beyond the U.S. national security bureaucracies to most federal departments and agencies nationwide, including the Peace Corps, the Social Security Administration and the Education and Agriculture departments. It emphasizes leaks of classified material, but catchall definitions of “insider threat” give agencies latitude to pursue and penalize a range of other conduct.
Government documents reviewed by McClatchy illustrate how some agencies are using that latitude to pursue unauthorized disclosures of any information, not just classified material. They also show how millions of federal employees and contractors must watch for “high-risk persons or behaviors” among co-workers and could face penalties, including criminal charges, for failing to report them. Leaks to the media are equated with espionage.
“Hammer this fact home . . . leaking is tantamount to aiding the enemies of the United States,” says a June 1, 2012, Defense Department strategy for the program that was obtained by McClatchy.
Read more here: http://www.miamiherald.com/2013/06/20/3461821/obamas-crackdown-views-leaks-as.html#storylink=cpy”
This is a system wide crackdown. I have seen it in my city. It runs from the top of USGinc. Lower level power mongers are easy to find and being able to accuse people of something that could send them to jail feeds that kind of person.
This period of history is incredibly dangerous. It’s clear that terrorism has/is been used by the govt. as a weapon to control the population. I’m so glad the one woman spoke up to say, “excuse me…”. At this time 1. that took courage and 2. that shows govt. propaganda has not been as successful as they wish.
The repression of dissent has been systematic. Clearly the govt. intends to continue and double down on this path.
Sue the bastids and larn em some law.