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.
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.
Two high-ranking financial whistleblowers say they tried to warn their superiors about defective and even fraudulent mortgages. So why haven’t the companies or their executives been prosecuted? Steve Kroft reports.
Two high-ranking financial whistleblowers say they tried to warn their superiors about defective and even fraudulent mortgages. So why haven’t the companies or their executives been prosecuted? Steve Kroft reports.
Who’s afraid of the Public Company Accounting Oversight Board? Banks and other financial institutions should be, even though the PCAOB regulates their auditors and not them.
American Banker-
Unlike banks, which have had federal and state regulators looking over their shoulders for more than a century, the Big Four accounting firms are still not used to having a truly disinterested party auditing their audits. Before the Sarbanes-Oxley Act, the audit industry was largely self-regulated through peer reviews coordinated by the AICPA, a trade group.
Bank of America Corp. (BAC), JPMorgan Chase & Co. (JPM) and other banks may pay more to resolve claims over their alleged roles in the collapse of a $2.3 trillion mortgage- backed securities market if sophisticated investors are allowed to sue as a group along with less savvy ones.
Class-action status allows investors to pool financial and legal resources, giving them greater leverage to win larger settlements or verdicts. The banks, however, have a court ruling on their side that may help fend off such blockbuster cases. It says class status is barred because some investors are too sophisticated — in fact, because some of them are other banks, including JPMorgan.
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