ATFA Calls Upon the Assembly Ways & Means Committee, Banks to Stand Up for New York Investors

WASHINGTON, June 17, 2011 /PRNewswire-USNewswire/ -- The American Task Force Argentina today reiterated its support of investor protection legislation being considered by the New York legislature.  

The bill, S.3767-C / A.7967-A, would require accountability of foreign nations who intentionally default and incur judgments in New York courts.  Large banks have lobbied aggressively to stop this bill, and now the bill is being bottled up in the Assembly Ways & Means Committee.

There’s no justifiable explanation for the Committee to block a vote on this important investor protection legislation.  Consider the following:

• A decade ago, Argentina repudiated over $80 billion in debts issued under NY law. It was the largest sovereign default in world history.
• Over a hundred U.S. court judgments (requiring Argentina to pay its debts) were issued to investors that Argentina stiffed.
• Argentina continues to ignore the judge's orders, despite the fact that the country's economy has boomed. It has stashed over $50 billion in cash reserves in foreign banks to avoid creditors.
• A core group of banks, including Citi, Barclays, Merrill Lynch and UBS, help Argentina sell its debts to New York investors.  The banks prepare bonds that contain a list of promises to investors that Argentina agreed it would honor.
• The banks get paid attractive underwriting fees to induce investors to buy the debt based on these promises.  
• Now the banks are opposing legislation that would require Argentina to live up to their promises.  Why?
• When Argentina defaulted, and investors lost billions, TAXPAYERS suffered too – because losses offset gains, and thus reduced the taxes paid on other profitable investments. Every US and New York taxpayer has paid a price for Argentina's default. But the banks still made money off of the transaction.
• If this sounds familiar, it's because that's exactly what happened in the lead-up to our nation's housing crisis.  Banks made irresponsible loans.  Borrowers defaulted.  Taxpayers were stuck with the bill.  Creditor rights were trampled.  But the banks still made money from selling the loans.

S.3767-C / A.7967-A would build some much needed accountability into the system.  We can't let foreign sovereigns, or the banks who are issuing their debt, abuse our investors or New York courts any longer.  

ATFA and its members call upon the Assembly Ways & Means Committee to allow a vote on this important legislation.  It’s time to stand up for New Yorkers.

Made up of an alliance of diverse organizations, ATFA's leadership includes Executive Director Robert Raben, a former Assistant Attorney General at the U.S. Department of Justice, and is co-chaired by The Honorable Robert J. Shapiro, former Under Secretary of Commerce for Economic Affairs in the Clinton Administration, and Ambassador Nancy Soderberg, Ambassador at the U.S. Mission to the United Nations in New York from 1997 to 2001.

For additional information on ATFA's activities, please visit www.atfa.org, or contact [email protected], or +1-888-662-2382.

SOURCE American Task Force Argentina