Securities Fraud | FORECLOSURE FRAUD | by DinSFLA

Tag Archive | "securities fraud"

Goldman, Wells Fargo May Face SEC Mortgage-Securities Claims

Goldman, Wells Fargo May Face SEC Mortgage-Securities Claims


Bloomberg-

Goldman Sachs Group Inc. and Wells Fargo & Co. were warned by federal regulators that they may face civil claims tied to sales of mortgage-backed securities.

Goldman Sachs received a so-called Wells notice Feb. 24 from the Securities and Exchange Commission relating to disclosures for a late-2006 offering of $1.3 billion in subprime residential mortgage-backed securities, the firm said today in an annual financial report. Wells Fargo said it also got an SEC notice as the government examines whether it properly described facts and risks in offering documents.

[BLOOMBERG]

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An Inconvenient Truth – Joe Nocera

An Inconvenient Truth – Joe Nocera


Once gain both the twins were part of the ponzi using MERS, exactly as the rest of the other shareholders (Banks) sought it out to be…a Strawman!

NY Times-

There is so much about Fannie Mae and Freddie Mac that we should be angry about.

In their heyday, these strange hybrids — part corporation, part government agency — were the biggest bullies in Washington, quick to bludgeon critics who dared suggest that their dual missions of maximizing profits while making homeownership affordable for low- and moderate-income Americans were incompatible. They steamrolled their regulator and pushed back at any suggestion that their capital was inadequate.

[NEW YORK TIMES]

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[VIDEO] Fannie Mae, Freddie Mac Execs Accused of Fraud

[VIDEO] Fannie Mae, Freddie Mac Execs Accused of Fraud


U.S. government investigates mortgage bosses for financial recklessness but are not looking into any jail time.

 

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The SEC’s Fraud Suits Against Fannie & Freddie Executives

The SEC’s Fraud Suits Against Fannie & Freddie Executives


Leave it up to Abigail to set the record straight!

Abigail C. Field-

The SEC has sued former executives of Freddie Mac and Fannie Mae for repeatedly lying to investors about their companies’ subprime portfolios. The complaints are very detailed and strong, alleging multiple securities law violations and violations of Sarbanes-Oxley. The complaints try to force the executives to give up their ill-gotten gains, pay penalties, and ban them from being a director or officer of a public company. Interestingly, the complaints are backed by separate cooperation and nonprosecution agreements with each company.

[REALITY CHECK]

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Regulators sue former top Fannie, Freddie execs

Regulators sue former top Fannie, Freddie execs


Just more of the same, except they still hold millions from the fraud!

Looks like taxpayers will also be picking up this tab!

 

Reuters-

Six former top executives at Fannie Mae and Freddie Mac were sued by U.S. regulators on charges of misleading investors about the mortgage finance companies’ exposure to risky home loans in the run-up to the 2008 financial crisis.

The case is one of the U.S. Securities and Exchange Commission’s biggest actions against high-level financial industry executives, although the regulator did not specify a dollar amount for damages in the alleged fraud. Many lawmakers consider Fannie Mae and Freddie Mac at least partly responsible for the 2008 crisis, saying they encouraged lax lending to home buyers that led to a massive real estate bubble.

[REUTERS]

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HERO Judge Rakoff May Have Goldman Sachs CEO Lloyd Blankfein Testify

HERO Judge Rakoff May Have Goldman Sachs CEO Lloyd Blankfein Testify


Judge Rakoff just keeps wowing us, day after day!

Sure he will do all in his power to squirm out of this one.


REUTERS-

Goldman Sachs Group Inc Chief Executive Officer Lloyd Blankfein may be asked to testify in a market regulator’s insider-trading case against a former director of the Wall Street bank, a judge ruled.

The U.S. Securities and Exchange Commission has accused Rajat Gupta, a former board member at Goldman and Procter & Gamble, of giving inside tips about the two companies to his friend Raj Rajaratnam in 2008 and 2009.

[REUTERS]

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Policy Makers: Bank and Wall Street Greed, Not “Irresponsible Homeowners”, Caused Our Crisis

Policy Makers: Bank and Wall Street Greed, Not “Irresponsible Homeowners”, Caused Our Crisis


Another mind-blowing article by the one and only Abigail C. Field –

Somehow the banking industry has convinced much of the public and most of our political leaders that our housing and foreclosure crisis is the fault of irresponsible borrowers despite the overwhelming evidence that greedy bankers are to blame. Since good policy can’t happen unless people escape the bankers’ web of misinformation and spin, I thought it would be appropriate to synthesize what we’ve learned about the greed-driven decisions of bankers and Wall Street traders and what they reveal about how we got where we are now.

[REALITY CHECK]

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Madoff ex-clients file $19 billion suit against JPMorgan

Madoff ex-clients file $19 billion suit against JPMorgan


If you recall from the previous unsealed complaint, “Top JPMorgan Execs. Were Warned of Madoff Scheme”, this appears to be similar…certainly if there is one, there must be others.

This is just slightly south of the entire settlement package of the Foreclosure Fraud settlement, which is also nilch for the acts committed.

Reuters-

Former customers of Bernard Madoff’s massive Ponzi scheme filed a class action lawsuit on Monday seeking to recover $19 billion from JPMorgan Chase & Co, claiming the bank willfully ignored signs of fraud.

JPMorgan was Madoff’s bank for two decades. The lawsuit, filed in federal court in Manhattan, claims the bank was “thoroughly complicit” in concealing Madoff’s fraud.

[REUTERS]

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COMPLAINT | SECURITIES AND EXCHANGE COMMISSION v. RAJAT K. GUPTA and RAJ RAJARATNAM

COMPLAINT | SECURITIES AND EXCHANGE COMMISSION v. RAJAT K. GUPTA and RAJ RAJARATNAM


UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

SECURITIES AND EXCHANGE COMMISSION,

Plaintiff

-against-

RAJAT K. GUPTA and
RAJ RAJARATNAM,

Defendants.

[ipaper docId=70393258 access_key=key-mavjtxlc8hjz46hks63 height=600 width=600 /]

 

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Low Mortgage Rates Insufficent, Lenders Cry Foul Because of Repurchase Bad Mortgages from Fannie Mae and Freddie Mac

Low Mortgage Rates Insufficent, Lenders Cry Foul Because of Repurchase Bad Mortgages from Fannie Mae and Freddie Mac


Unreal and they wonder why anyone would do business with these fools. Perhaps the market won’t turn around because many not all lenders did fraudulent activities with these loans.

Seems they are trying to go back to the easy billions they are used to making.

They aren’t billionaires because they were hard working or smart 🙂

BLOOMBERG-

Government efforts to make lenders pay for soured mortgages may be keeping potential borrowers from record-low interest rates, slowing home sales and refinancing as banks tighten standards to avoid more demands for refunds.

Lenders are insisting on higher credit scores and more documents than required by the Federal Housing Administration and government-backed Fannie Mae and Freddie Mac. Quicken Loans Inc. and Vision Mortgage Capital are among firms saying they are increasing scrutiny of would-be borrowers in response to pressure to cover losses incurred on U.S.-backed housing debt.

“You’ve got to take measures now to protect yourself,” John B. Johnson, chief executive officer of Birmingham, Alabama- based MortgageAmerica Inc., said during a panel discussion this month. Demands that lenders repurchase bad mortgages from Fannie Mae and Freddie Mac are “casting a pall over the market. I fear that it will face a much longer recovery because of this.”

[BLOOMBERG]

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SEC charges Citigroup $285M with misleading investors about mortgage-backed CDO; Credit Suisse sanctioned.

SEC charges Citigroup $285M with misleading investors about mortgage-backed CDO; Credit Suisse sanctioned.


Something new every s-i-n-g-l-e day…

 

Businessweek-

Oct. 19 (Bloomberg) — Citigroup Inc. has agreed to pay close to $300 million to resolve U.S. Securities and Exchange Commission claims that it misled investors about a financial product linked to risky mortgages, according to a person with direct knowledge of the matter.

The settlement is subject to approval by the SEC commissioners, who were scheduled to vote on it today, the person said, declining to be identified because the matter isn’t public. One Citigroup executive and an employee from another firm involved in the deal are also named in the SEC’s claims, according to the person.

[BUSINESSWEEK]

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Deloitte & Touche Sued for $7.6 Billion in Collapse of Lender Taylor Bean

Deloitte & Touche Sued for $7.6 Billion in Collapse of Lender Taylor Bean


It’s all of the banks. They did not accumulate wealth because they were honest. It’s all of them!

 Bloomberg-

Deloitte & Touche LLP, one of the so-called Big Four accounting firms, was sued for failing to detect a fraud that allegedly led to more than $7 billion in losses at defunct mortgage lender Taylor, Bean & Whitaker Mortgage Corp.

Deloitte, which audited Taylor Bean’s financial statements from 2002 to August 2009, ignored red flags in the company’s books, allowing the lender’s former chairman Lee Farkas to orchestrate a fraud that toppled the company, according to the complaints filed today in state court in Miami. Taylor Bean’s bankruptcy trustee, Neil Luria, and its Ocala Funding unit are seeking more than $7.6 billion in damages.

[BLOOMBERG]

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Hold banks to account for their role in crisis

Hold banks to account for their role in crisis


TOO Big to FAIL, doesn’t have to mean they’re TOO Big not to JAIL.

SacBee-

Three years ago this week, the financial system came unhinged. In rapid-fire succession, one major financial institution after another crumpled as years of recklessness on Wall Street and regulatory neglect in Washington took their toll. Before it was over, the federal government had committed trillions of dollars to bail out the nation’s largest banks and the economy was in tatters, with gnawing questions remaining about what went wrong and who was responsible.

The unraveling had dire consequences. Twenty-four million Americans are unemployed or unable to find full-time work, with wages as a share of gross domestic product at the lowest level since the 1930s. Meanwhile, the banks barely skipped a beat, with compensation at publicly traded Wall Street firms reaching a record $135 billion in 2010.

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Vexed by Securitization Suit, Banks Pull Out of Mortgage Fraud Settlement Meeting

Vexed by Securitization Suit, Banks Pull Out of Mortgage Fraud Settlement Meeting


Banks blow up mortgage settlement talks, despite Iowa AG Tom Miller’s begging and whimpering!!

TIME-

The five biggest mortgage servicers have cancelled a planned negotiating session with representatives of the 50 State Attorneys General in apparent protest over a federal regulator filing suit against them, a source familiar with the matter tells TIME.

The banks canceled the meeting on Tuesday afternoon in protest over the announcement last Friday that the Federal Housing Finance Agency would bring a broad case against 17 firms, including those in talks with the State AGs. The FHFA, which oversees mortgage giants Fannie Mae and Freddie Mac, alleges the firms violated securities law by misrepresenting the value of bundles of high-risk mortgages they sold. FHFA did not say how much the case might be worth, but outside analysts have said it could potentially produce billions of dollars in compensatory damages from the firms.

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In Disputed Fannie and Freddie Mortgage Deals Evidence of ‘Robo-Signing’

In Disputed Fannie and Freddie Mortgage Deals Evidence of ‘Robo-Signing’


TIME-

Long before the banks started evicting delinquent homeowners, Wall Street, it appears, used robo-signers to ink mortgage deals that would eventually cost investors tens of billions of dollars and in part led to the financial crisis.

According to lawsuits filed last week by the U.S.’s Federal Housing Financing Agency, one individual was used by three different banks to sign off on 36 different mortgage bond deals in 2006 alone. Many of the deals contained as many as 4,000 home loans. Yet, according to the lawsuits, the individual Evelyn Echevarria signed documents attesting to the fact that all the loans – well over 100,o00 in 2006 alone


Read more:
[Curious Capitalist.blogs.time.com]

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It’s hard to Believe the Gnomes at Freddie and Fannie didn’t know what they were buying

It’s hard to Believe the Gnomes at Freddie and Fannie didn’t know what they were buying


This is a great article written by Kevin Villani who was senior vice president and chief economist at Freddie Mac from 1982 to 1985.

American Banker-

In the 1980s Freddie Mac had a marketing campaign “The Gnomes Know,” touting their expertise in mortgage markets. Now the Federal Housing Finance Agency has filed a $200 billion lawsuit against 17 of the nation’s largest mortgage lenders arguing that during the subprime lending debacle of the last decade the gnomes didn’t know!


[AMERICAN BANKER]

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Prove Fannie and Freddie Innocent Before Suing the Banks–And Here Is How

Prove Fannie and Freddie Innocent Before Suing the Banks–And Here Is How


Business Insider-

Last Friday the U.S. regulator, the Federal Housing Finance Agency (FHFA), which has the oversight responsibility of Fannie Mae and Freddie Mac, sued 17 large banks and financial institutions relating to losses on approximately $200 billion of Fannie Mae and Freddie Mac subprime bonds.

Now, let me be clear right from the start.  I am no apologist for the banks.  And historically my tendency has been to support better financial regulation and even the Democratic Party through my voting preference.

However, enough is enough.  At this point in time the Government and the FHFA have no right to sue the banking industry on behalf of Fannie Mae and Freddie Mac.  That is a joke.



Read more:
[BUSINESS INSIDER]

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Janet Tavakoli: “Fraud As a Business Model”

Janet Tavakoli: “Fraud As a Business Model”


If William K. Black and Janet would only team up to write a book?

HuffPO-

There were many factors that contributed to our recent financial bubble: deregulation, cheap money from the Fed, failure to enforce remaining regulations, crony capitalism, hubris, speculation, leverage, and fraud among other problems. While fraud wasn’t the only issue, it was and is a significant contributor to the credit bubble. Restraining fraud is a necessary but not sufficient condition for a sound financial system. Congressional investigations in recent years have put ample evidence of fraud in the public domain.

To illustrate just one type of malicious mischief, Senator Carl Levin (D. Mich.), Chairman of a senate investigative panel, issued a memo stating that Goldman ” magnified the impact of toxic mortgages.” The Wall Street Journal reviewed data showing that a $38 million subprime-mortgage bond created in June 2006 was referenced in more than 30 debt pool causing around$280 million in losses to investors by 2008. In other words, Goldman kept repackaging, reselling or protecting (buying credit default protection on) losers. It took the wrong kind of nerve for Goldman’s CEO to say he was doing “God’s work.”

[HUFFINGTON POST]

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FHFA puts out statement clarifying lawsuits

FHFA puts out statement clarifying lawsuits


For Immediate Release Contact:

Corinne Russell (202) 414-6921
Stefanie Johnson (202) 414-6376

September 6, 2011

Federal Housing Finance Agency Statement on Recent Lawsuits Filed Upon

[ipaper docId=64098989 access_key=key-2ooexah5egqokqopzcs0 height=600 width=600 /]

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US, France Knew In 2007 Financial Collapse Was Imminent Due To Wall Street Fraud

US, France Knew In 2007 Financial Collapse Was Imminent Due To Wall Street Fraud


#WikiLeaks- PAULSON DISCUSSES FINANCIAL MARKETS, IRAN WITH SARKOZY, LAGARDE

Alexander Higgins-

In 2007 top US and France officials knew rampant fraud being committed by regulators, rating agencies and Wall Street Banks would soon cause a global financial collapse.

While investors and nations around the world were happily giving trillions of dollars away to crooked Wall Street bankers top officials in the United States and France knew the market would soon collapse and people would be robbed of millions.

While raising the issue that the role of government regulators and rating agencies needed to be reviewed in the wake of the upcoming crisis, US officials ignored calls from the French government to enact necessary regulation to stop the rampant fraud that would soon result in investors losing tens of trillions of dollars they had invested into the markets.

The cable reveals that while discussing the ability of the French banks to survive the crisis, French President Sarkozy was pushing the US to enact regulations to forestall the crisis. Instead, Henry Paulson responded by telling Sarkozy not to overreacted because the” it would take months, not weeks, for credit to be re-priced” telling France this is “not a major crisis.”

Paulson went on to warn that the major problem was with the German banks and which would require a bailout from the taxpayer while warning that the assets held by banks but covered up from investors by being held off-balance sheet presented systematic risk to banks and to sovereign wealth.

The cable clearly reveals that taxpayer bailouts would be needed.  Paulson further up sticks up for the Wall Street hedge fund saying they were not to blame for the crisis while acknowledging there were major Wall Street transparency issues.

To summarize, the cable reveals that top government officials in France and the US knew Wall street banks were committing fraud in the origination and packaging of sub-prime mortgage and lying to investors about the resulting securities they were creating and selling. Officials knew banks were also lying about their own liabilities and hiding them from investors by keeping the assets off their balance sheets.  The government also knew that both regulators and ratings agencies were participating in the scheme.

Remember as you read this cable, these conversations all took place over a year before the 2008 financial collapse when taxpayers around the world were forced into giving up trillions of dollars for banker bailouts. Also keep in mind that while the cable discusses “systemic risk”, “bailouts” and “market turbulence”, none of these had happened yet. They were discussing what would soon happen in the future.

The discussion of “systemic risk”, “market turbulence” and “taxpayer bailouts” over a year before the markets actually collapsed and those events actually occurred, show they knew a global financial collapse. Not only did they know it would occur but knew what the consequences would be for the investors and the governments who were fleeced by Wall Street. As the cable reveals, Paulson chose to deal with the crisis by letting it continue and urging France to keep the issue underwaps  by  urging Sarkozy not  to “over react”, hence allowing the scandal to the continue which just postponed the inevitable.

Also remember when we were forced into these bailouts, it was  under the guise that our governments had no idea the banks were doing this and this was a sudden and unforeseeable crisis. Finally, remember that – while there have been plenty of accusations from “conspiracy theorists”,  “fringe economists” and “wing nut” politicians such as Ron Paul – there still has been no admission from our government that financial regulators or the ratings agencies played a role in the crisis.

[ALEXANDER HIGGINS]

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U.S. banks offered deal over lawsuits – FT

U.S. banks offered deal over lawsuits – FT


REUTERS-

Big U.S. banks in talks with state prosecutors to settle claims of improper mortgage practices have been offered a deal that is proposed to limit part of their legal liability, the Financial Times reported on Tuesday.

The FT said state prosecutors have proposed a deal to limit part of the banks’ liability in return for a multibillion-dollar payment.

The talks aim to settle allegations that banks including Bank of America (BAC.N), JPMorgan Chase (JPM.N), Wells Fargo (WFC.N), Citigroup (C.N) and Ally Financial (GKM.N). seized the homes of delinquent borrowers and broke state laws by employing so-called “robosigners”, workers who signed off on foreclosure documents en masse without reviewing the paperwork.

[REUTERS]

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FHFA Complaints: Can Control Frauds Recover for Being Defrauded by other Control Frauds?

FHFA Complaints: Can Control Frauds Recover for Being Defrauded by other Control Frauds?


William K. Black-

Reading the FHFA complaints against many of the world’s largest banks is a fascinating and troubling process for anyone that understands “accounting control fraud.” The FHFA, a federal regulatory agency, sued in its capacity as conservator for Fannie and Freddie. Its complaints are primarily based on fraud. The FHFA alleges that the fraud came from the top, i.e., it alleges that many of the world’s largest banks were control frauds and that they committed hundreds of thousands of fraudulent acts. The FHFA complaints emphasize that other governmental investigations have repeatedly confirmed that the defendant banks were engaged in endemic fraud. The failure of the Department of Justice to convict any senior official of a major bank, and the almost total failure to indict any senior official of a major bank has moved from scandal to farce.

The FHFA complaints are distressing, however, in their failure to explain why the frauds occurred and how an accounting control fraud works. The FHFA complaint against Countrywide is particularly disappointing because …

[BENZINGA]

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