Our Galtian Overlords sound more and more like a Soprano’s capo with each day:
According to the lawsuit, the Bear traders would sell toxic mortgage securities to investors and then sell back the bad loans with early payment defaults to the banks that originated them at a discount. The traders would pocket the refund, and would not pass it on to the mortgage trust, which was where it should have gone to be distributed to the investors who owned the bonds. The Marano-led traders also cut the time allowed for early payment defaults, without telling the bond investors. That way, Bear could quickly securitize defective loans, without leaving enough time for investors to do their own due diligence after the bonds were sold and put-back any bad loans to Bear.
The traders were essentially double-dipping—getting paid twice on the deal. How was this possible? Once the security was sold, they didn’t have a legal claim to get cash back from the bad loans—that claim belonged to bond investors—but they did so anyway and kept the money. Thus, Bear was cheating the investors they promised to have sold a safe product out of their cash. According to former Bear Stearns and EMC traders and analysts who spoke with The Atlantic, Nierenberg and Verschleiser were the decision-makers for the double dipping scheme, and thus, are named as individual defendants in the suit.
Although we must look forward and not backward, because we don’t want to hurt Rick Santelli’s feelings and slow the economic recovery.
Suit? How is this not a felony prosecution. Any how is it that Bear Stearns is not as a “corporate person” also facing criminal prosecution on this?
I’ve been wondering when the investors would start suing the shit out of these banks.
That’s exactly what I was thinking: sounds like criminal fraud.
@Tom Levenson: Same reason Bush officials breaking the law isn’t a crime, that’s why.
If we’re looking for savings in government, I’m hard pressed to find something less useful than the enforcement arm of the government right now, since the only thing they can seem to do is charge mobsters, presumably because the goombahs never donated to a political campaign.
John Gotti, at least, used to put on a big fireworks show in his neighborhood every year as free entertainment for the little people. The Wall Street mafia doesn’t even do that. They’re too greedy to provide the public with a little bread and circuses from time to time. Who needs ’em.
In a word, deregulation.
Corporate persons are like rich persons: They’re different from you and me in that they aren’t to be held accountable for their actions. Unless the economy does well, in which case they’re the only ones responsible.
If shareholders were allowed to carry guns to the annual meetings of same, this problem would solve itself.
heh, santelli. that guy’s like the grift that keeps on giving. of grifting, i can’t tell.
For those of you who have read Griftopia, this is small beans compared to Blankflein’s highwayman act in the “WTF AIG?” meetings in late 2008.
Snarkless. Completely dispirited that even at its simplest this criminal enterprise is too complicated for most people to follow or care about. Is it time for scotch?
griftopia needs to be next on the book club list. after finishing that one i felt like going outside and punching someone.
@Comrade Javamanphil: Which is why law enforcement should be taking care of this for us. It really steams me that these people, not companies, people, are going to get off scott-free and live on their yachts sipping champagne and eating cracked crab.
because if we looked backward, we might see the O-faces of the men who’re raping us.
and notice that neither the doj/eric holder nor the sec were involved in this investigation…
which almost makes me think there’s a slight chance of prosecutions — hopefully by the nys attorney general.
@Comrade Javamanphil:”.. at its simplest this criminal enterprise is too complicated for most people to follow or care about. ”
How is that? They said they would give the proceeds to the buyer of the securities. Instead they stole it.
Complicated only in the ‘possession is nine tenths of the law’ sense that folks with very grabby fingers tend to resort to when they are holding someone else’s money.
Michael Milken must be bemoaning his fate. If he’d run his scams 20 or 30 years later, he never would have done time. There will never be prosecutions for the immense fraud we’ve seen the last 10 years or so, there will never be prosecutions for the lies that sold the Iraq war, there will never be prosecutions for the torture carried out in our names. This is a government of (rich, white) men, not laws.
Please; this is lying, cheating and stealing. Doesn’t get simpler than that.