Monday, October 24, 2011

Another bailed-out Wall St. crook gets off with a wrist slap

Yeah, those poor dumb Wall Street guys had no idea their mortgage-backed securities (MBS) were crap. They weren't greedy, just dumb.


Here's how the NYT described Citigroup's crime:

"... this week the Securities and Exchange Commission unveiled its latest charges involving mortgage-backed securities. In what may be a new low for conduct by a major Wall Street firm in the walk-up to the financial crisis, Citigroup settled charges (without admitting or denying guilt) that it defrauded investors by creating a package of mortgage-backed securities for which it selected a pool of mortgages likely to default, bet against the security for the bank's benefit by shorting it and then foisted it off on unwitting investors without disclosing any of this.

"According to the S.E.C., one trader characterized this particular security in an all-too-candid e-mail as 'possibly the best short EVER!'"

To add insult to injury, Citigroup has been the biggest recipient of special Fed bailouts: more than $2.5 billion!

And in case you think Citigroup is an isolated case, remember that Goldman Sachs and J.P. Morgan (who received over $800 billion and $390 billion on bailout funds, respectively) already settled with the SEC on similar charges of selling their investors assets and then betting against (shorting) those same assets. Unfortunately those settlements totaled only $700 million, chump change for these bailed-out TBTF banks.

Moreover, not a single Wall Street CEO has gone to jail yet, nor even been fined or reprimanded. The crooks are still in charge. There's no accountability... even though corporations are people.

So... if OWS doesn't work, we're just going to have to try something else....

By Daniel Wagner and Marcy Gordon
October 19, 2011 | Associated Press

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