Mind and Destiny

“I make no pretension to patriotism. So long as my voice can be heard ... I will hold up America to the lightning scorn of moral indignation. In doing this, I shall feel myself discharging the duty of a true patriot; for he is a lover of his country who rebukes and does not excuse its sins. It is righteousness that exalteth a nation while sin is a reproach to any people.”- Frederick Douglass

Location: Delhi, N.Y., United States

The author and his webmaster, summer of 1965.

Wednesday, May 18, 2016

Big Banks

In 2009, Preet Bharara became the U.S. Attorney in the Southern District of New York.  As the top federal prosecutor in Manhattan, he announced mortgage fraud charges against three former high-level employees of Credit Suisse, after the collapsing value of their investments nearly destroyed the global economy.  Those Credit Suisse employees had jacked up the book value of bundled housing loans they were selling.  They overstated the value by $540 million, boosting a top executive’s bonus to $1.7 million in 2007.

After convicting 56 people for insider trading Bharara announced: “There was a creeping culture of corruption in our politics and also in Wall Street and in business generally.” His greatest successes against Wall Street crime has come from prosecuting insider trading, a practice which he says “tells everybody at precisely the wrong time that everything is rigged and only people who have a billion dollars and have access to and are best friends with people who are on boards of directors of major companies, they’re the only ones who can make a true buck.”

At the top of the list of “Time” magazine list of those responsible for the 2008 economic crisis was Angelo Mozilo the chief executive of Countrywide Financial.  In 2011, Angelo Mozilo was fined $67.5 million by the Securities and Exchange Commission. 

The Residential Mortgage-Backed Securities Working Group includes both State and Federal prosecutors.  As a member of that group, New York’s Attorney General Eric Schneiderman deserves credited for the $16.65 billion settlement with Bank of America for deceiving investors into buying troubled mortgage securities.

The Bank of America settlement includes $800 million in relief for New York.  The money is being used for homeowner relief, foreclosure prevention services, land banks, community revitalization, and the creation and preservation of affordable housing.  Democrats have won nearly $37 billion from banks that helped cause the mortgage crisis.  That includes more than $4 billion in cash and consumer relief for New Yorkers. 

Another major victory for the misconduct that occurred in 2007, that contributed to the global financial crisis was the $13 billion settlement with JPMorgan Chase that the same task force secured in 2013.

Limiting the size of banks doesn't actually prevent a lack of government oversight, predatory lending, or corrupt politicians from taking bribes from Wall Street lobbyists.  The Dodd-Frank reforms must continue to be enforced. 


Post a Comment

<< Home