In a court case glossed over by the corporate media earlier this month, the U.S. Court of Appeals, Seventh Circuit has ruled that individual segregated bank accounts may be turned into the property of a third-party under circumstances of duress.
“In other words, if a financial institution fails, clients, depositors and pension funds may not get some or all of their money back in a bankruptcy,” writes Dominique de Leveling de Bailleul for Beacon Equity Research.
The Sentinel ruling has legalized the theft of segregated customer funds and pensions by large banks and financial institutions.
Moreover, the ruling overrides protection afforded by Federal Deposit Insurance and other government insurance programs and leaves “millions of investors, depositors and retirees unaware that they are no longer account holders of their own funds, per se, but, instead, have suddenly become stockholders of the institution with which they have deposited their money,” de Leveling de Bailleu writes.
Ann Barnhardt points out that the ruling sets the stage for bankster consolidation ahead of an economic collapse.
Barnhardt writes on her blog that “all customer funds in the United States are now the legal property of JP Morgan, Goldman Sachs” and other mega-banks and financial institutions.
“Sentinel took customer segregated money and fraudulently used it as the collateral on a loan from Bank of New York Mellon for $312 million to fund their own in-house proprietary trading operations. When the Sentinel Ponzi collapsed, BNYM sued to go to the front of the line of creditors – ahead of the customers of Sentinel whose money was fraudulently used as collateral, which has now been ‘linguistically sanitized’ into the word ‘hypothecated,’” she writes.
“What this means is that even if Jon Corzine is somehow dragged into court by private citizens, because you know damn good and well that the Justice Department will never, ever touch him.”
Corzine is so confident of his fate, he has decided to launch a hedge fund.
“Insurance is designed to cover discreet, individual catastrophes. Okay? If one bank fails, the FDIC can come in and backstop that one bank, no problem,” Barnhardt explains.
“What do you think is going to happen if the entire system collapses? What happens, do you think, if, even, let’s say 25 percent of the banks or the banking capacity in the United States fails? We are now talking trillions and trillions of dollars in deposits.”
Barnhardt places blame in part for the coming economic catastrophe on the American people because they have voted into office psychopaths who protect bankster psychopaths.
“The perfection of the correlation to the psychopaths running the government and financial sector is hard to improve upon. They have ZERO remorse. They are not sorry, but disgusted and indignant that they were caught, and that society has the gall to hold them to any account,” she notes.
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