New Economic Perspectives-
Three Bloomberg reporters have done the Nation a service by ferreting out a scandal of moderate magnitude but emblematic importance. Dakin Campbell, Jody Shenn and Phil Mattingly broke the story on August 14, 2013 that Adam Glassner, recently described, but not named, in the Department of Justice’s (DOJ) fraud suit against Bank of America (B of A), and named as a defendant by Fannie Mae’s in its fraud suit against B of A and several officers, was hired by two companies (Ally and Fannie) bailed out by Treasury.
Here is DOJ’s key allegation about Glassner.
23. The “BOA-Securities Managing Director” was a Managing Director at BOASecurities and a Senior Vice President of BOA-Bank who, at all times relevant to the allegations of this Complaint, was in charge of the Mortgage Finance Group at BOA-Securities – the group that had responsibility for underwriting the BOAMS 2008-A securitization – and the Investor Relations Group at BOA-Bank – the group that had responsibility for selecting the mortgages to be securitized and determining the price at which BOA-Bank would sell those mortgages. The BOA-Securities Managing Director ultimately had responsibility for structuring the BOAMS 2008-A securitization and preparing the Offering Documents. At all times relevant to the allegations in this Complaint, the BOA-Securities Managing Director also served as President and Chief Executive Officer of BOA-Mortgage. The BOA-Securities Managing Director’s annual bonus was largely dependent on Defendants continuing to profitably securitize mortgages originated by BOA-Bank. Thus, he had a strong financial motive to withhold negative information concerning the value of the Certificates from investors.
Fannie Mae was the second of these corporate bailout recipients, purportedly run by the government, to hire Glassner. Fannie hired Glassner after it sued him. The suit was nominally brought by the Federal Housing Finance Administration (FHFA), the federal agency acting as conservator for Fannie, but Fannie is the real party in interest in the lawsuit.