Today, I saw a MASSIVE signal that the OWS movement is inspiring those who work within the system to grow a backbone and actually do something.

Today, a NY Judge, Jed Rakoff, threw out a proposed settlement between Citigroup and the Securities and Exchange Commission (The SEC, if you need a refresher, is in charge of enforcing federal securities law and regulating the securities industry).

The settlement was for $285 million, over a case where Citi allegedly bundled up some crappy mortgage-backed securities, sold them off the investors, and then simultaneously shorted (i.e. bet against) the same securities. Citi made $160 million off the deal, and investors lost $700 million.

Settling would have allowed Citi group to avoid having to admit any guilt at all. All the SEC charged them with was “negligence.” They did NOT charge them with “scienter” which is legal-speak for fraudulent intent. This is despite the SEC having referred to Citigroup in a memo as a recidivist (a habitual criminal). Judge Rakoff states in the ruling: “By the S.E.C.’s own account, Citigroup is a recidivist, SEC Mem. at 21.”

Settling also would have allowed Citi to avoid going to court, where the case would be argued out in public and put before a jury, and should they lose, they could be subject to FAR more in fines than the $285 million they were trying to settle for.

Essentially, the SEC was offering Citi a slap on the wrist. Usually, judges just rubber-stamp these settlements.

But not this time. This time, Judge Rakoff threw out the settlement, insisting it must go to trial. His ruling is really a smack-down of both Citigroup and the SEC. He doesn’t really pull any punches.

Here are a few choice quotes (emphasis mine):

“An application of judicial power that does not rest on facts is worse than mindless, it is inherently dangerous. The injunctive power of the judiciary is not a free-roving remedy to be invoked at the whim of a regulatory agency, even with the consent of the regulated. If its deployment does not rest on facts — cold, hard, solid facts, established either by admissions of by trials — it serves no lawful or moral purpose and is simply an engine of oppression.”

Another choice part of the ruling:

“Finally, in any case like this that touches on the transparency of financial markets whose gyrations have so depressed our economy and debilitated our lives, there is an overriding public interest in knowing the truth. In much of the world, propaganda reigns, and truth is confined to secretive, fearful whispers. Even in our nation, apologists for suppressing or obscuring the truth may always be found. But the S.E.C., of all agencies, has a duty, inherent in its statutory mission, to see that the truth emerges; and if it fails to do so, this Court must not, in the name of deference or convenience, grant judicial enforcement to the agency’s contrivances.”

The full ruling is here, and really worth a read:
http://www.nysd.uscourts.gov/cases/show.php?db=special&id=138

This is one of the strongest signs yet, in my opinion, that not only is the world watching, but our movement is holding the powers that be accountable, and our allies are all emboldened by everything we do. Now, to be fair to Judge Rakoff, he’s expressed doubt over these settlements in the past:

He “reluctantly” approved a $150 million settlement between Bank of America and the SEC last year, after calling the deal “half-baked justice at best.”

But today he seems to be willing to go further than he has before.

The broader implications of this was summed up quite nicely by Adam Sorensen in Time:

Monday’s decision could have implications beyond Citibank. Settling out of court with no admission of wrongdoing has frequently been the SEC’s modus operandi in cases like this. If political momentum built in the wake of Rakoff’s ruling and other judges picked up his banner, Wall Street could face a level of scrutiny it has so far avoided.

Pat yourself on the back today, Occupy Wall Street. The world is starting to change.

I have been busy. I have been actively involved with the Occupy Wall Street protests, in a number of Caucus and Movement groups (including Occupy the SEC which is a part of the Alternative Banking group). I’m long overdue to post to tell you about how I feel like a lawyer these days as I comb through The Volcker Rule text looking for loopholes the banks will use.

But today, I march in solidarity with my fellow protestors at Foley Square at 5pm in New York City. If you are in NY, I urge you to come out. I know many of my friends have been wary to join in. They question the efficacy, they question the tactics, they question the point.

The point is simple: unlimited campaign donations by corporations is free speech, per the Citizens United Supreme Court Case. But tents in a park is not free speech. Instead, it requires a military-style show of force at a time when our city is ostensibly unable to afford anything. And now I am hearing that Brookfield Properties who owns the park is not even allowing signs into the park. Free speech, indeed?

Here is an excellent video of the scene at the night of the eviction, set to Frank Sinatra:

I used to work on Wall Street, so I do think I have a sense of what is good and what is bad (and what is egregious) there. I do think that marching on the NYSE is not the best strategic move. The NYSE is a public, transparent exchange where listed products trade. This is not a warehouse of opaque CDOs that trade Over-the-counter in numbers no one knows and, per the 2000 “Commodity Futures Modernization Act” no one could regulate.

But the movement overall has shone a light on a fact Wall Street wished we’d simply forget: that they are not playing by “free market” rules, though they expect us to.

Yves Smith of the excellent blog Naked Capitalism put it best here:

I lost all sympathy with the executives and producers of major banks in 2009. Here, after having gotten massive, hugely visible rescues, and continuing support in the way of super low interest rates (a massive transfer from savers), they did not do the right thing, which was to lay low for a couple of years, cut pay, and rebuild their balance sheets. Instead, banks fell all over themselves to repay the TARP simply to escape its think restrictions on executive pay, and Wall Street bonuses in 2009 and 2010 exceeded the 2007 record.

As we’ve argued, banks, particularly in this era of extraordinary support (rock bottom interest rates, regulatory forbearance, underpriced insurance schemes) enjoy far more government support than any other industry, including defense contractors. They can’t properly be considered to be private companies. They are utilities and need to be regulated as such. And if they won’t rein in pay levels on their own, it should include restrictions on pay.

And so, today at 5pm I will march on Foley Square. If you have been on the sidelines up until now, come join us today. Come see what we are up against. And come feel your heart soar, as mine has, as you stand side-by-side with a community of people who are finally getting out from behind their laptops and into the streets to make lasting change that’s been so long overdue.

JPM xoxo NYPD

Well, it just so happens that JP Morgan invested significantly in a fund with a $400 million share of twitter back in March of this year. While at the time I’m sure they just thought it made good business sense, what it may well mean now is that they have say over one of the primary mediums the Occupy Wall St movement is using to get the word out.

More chilling is the $4.6 million donation that JP Morgan has recently given to the NYPD’s New York Police Foundation. Here it is emblazoned proudly on JPM’s corporate site.

In my mind, there are two possible interpretations here. The first is this is an attempt at suppression from multiple levels: communication and law. If you control the medium, you control the message. If you control the enforcers, you can supplant the law.

Another interpretation? That Chris Hedges was right. That JP Morgan is running scared.

Hedges recently gave a lengthy interview at Occupy Wall Street (which was so good I stayed up until 4am last night watching every part of it. He is so articulate and moving that I think my brain exploded a little listening to him), and one of the things he said is relevant here:

The real people who are scared are the power elite. Of course, they’re trying to make you scared and us scared. But I can tell you, having been a reporter for the New York Time, that on the inside, they’re very, very frightened. They do not want movements like this to grow.

Which interpretation is right? Perhaps both. We shall see.

Occupy Together

Huge props to Estelle Weyl for alerting me to the fact that one of my websites (Don’t panic! Not this one!), alexisgo.com was compromised by sweepstakesandcontestsnow.

It looks like a number of people running WordPress on Dreamhost fell victim to this.

There is a great write-up of the issue here: http://www.travelswithakazoo.com/2011/09/how-embarassing/ and here http://sucuri.net/new-malware-sweepstakesandcontestsnow-com.html

To summarize, what seems to have happened is these lovely folks inserted a base64-encoded string at the top of every PHP file in your root directory. This string evaluates to some code that adds the following line (which I’ve modified) of JavaScript to every html file in your root directory:

script src="http://do not go to sweepstakesandcontestsnow.com/nl.php?nnn=1"

So, what about this site? It looks like I was saved by some of the custom tweaks I made to this particular WordPress install, as it appears that the malicious script tried to do the same to this site, but, well, failed (the script tried the wrong directory).

I haven’t heard back from Dreamhost on how this all went down, but I have since changed all my logins and thoroughly chastised myself. If you have visited alexisgo.com in the last 10 days, especially if you were running IE, you will want to do a full system scan. I deeply apologize for this.

If you use Dreamhost and run WordPress, you should check out your sites while running NoScript in Firefox, and make sure you don’t have cause to feel as embarrassed as I do right now. Here is the cleanup for the effects of this should your site have been a target: http://blog.sucuri.net/2010/05/simple-cleanup-solution-for-the-latest-wordpress-hack.html

HTML5′s Microdata allows us to use custom vocabularies to add better markup to our pages.  It allows us to tell search engines things like “Hey, Google! I know I’ve got twenty images on my blog but this image is my bio pic!” This is so important that Yahoo!, Google and Microsoft have teamed up to work together on these vocabularies at schema.org. They’ve created vocabularies for everything from Event, Restaurant, Product and Review, to Person, Organization, Corporation, and NGO.

So why haven’t you heard more about it? Well, if the google analytics on Mark Pilgrim’s Dive Into HTML5 online book are any indication, people are generally uninterested. Pilgrim’s book covers Microdata in a dedicated chapter. But if you look at his analytics, you’ll find that that is the least read chapter. Mark writes:

Seriously, the shit that nobody gives about my beloved Peeks, Pokes & Pointers chart is rivaled only by the shit that nobody gives about Microdata.

In my mind, that’s an edge for those of us who do give a shit. Read more »

Um, should I be worried that KitKats cause cancer? Because Nestle just acquired a company, Prometheus Labs, that makes products to treat cancer and gastrointestinal illness. Uh, since this smells like vertical integration, I should be worried, shouldn’t I?

I wrote a guest blog on HTML5′s Drag & Drop for Sitepoint.com. It’s a very simple example that builds a little Scrum Planning Board using a bit of CSS and the new Drag & Drop API. You can view the sample code up on github.

In the wake of the death of Osama bin Laden after being discovered in Abbottabad, Pakistan, I have been thinking back to the weeks I spent in Karachi and Lahore in 2004.

To this outsider and visitor, it seemed to me to be a country with a very wealthy class, a very poor class, and little in between. There were fancy shopping malls in Karachi and slums that lined the roads to the beach. There was a bomb blast while I was there, and I remember being surprised at how little it seemed to jar anyone but me. This seemed, to me at least, to be a place where the presence of extremists was accepted as an unfortunate reality.

While alcohol was illegal, it could be found, in private, if you knew the right people and where to go. I remember feeling nervous when pulling off the side of the road in a fancy car. My host, in his fine suit, approached a band of rural people who sold him several live fish, then killed and gutted them before us. But they were friendly and full of smiles. It seemed a delicate balance.
Read more »

Three hundred people have died in the storms that ravaged the Southern part of the US this week. The pictures and personal videos emerging show the extent of the destruction.

You’d think now would be a time for kindness and charity. A time for companies, if they were to say anything at all, to offer to lend a hand.

But not SEARS! No, Sears looked across the south at all this devesatation, and you know what they saw? Big, fat dollar signs! So they sent me, and who knows how many thousands of other idiots that bought something from them once and receive their SPAM ever after, this email: “Affected by the storm? Sears can help you clean up.”

And here’s a handy graphic: