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marmar

(76,985 posts)
Sat Jul 19, 2014, 11:02 AM Jul 2014

Bill Black on the Citigroup settlement: "Misrepresentations is a fancy way of saying Citi lied"


By William K. Black

The third omission from Attorney General Eric Holder’s press conference announcing the settlement with Citigroup of civil charges was the words “criminal” and “indictment.” The
Department of Justice (DOJ) press conference had a scripted press release.

According to DOJ’s Statements there should have been Numerous Indictments

The DOJ press release contains the following statements that logically should have led to an indictment of a large number of Citi’s officers. Holder states: “The bank’s activities contributed mightily to the financial crisis that devastated our economy in 2008.” Citi “made serious misrepresentations to the public – including the investing public – about the mortgage loans it securitized in RMBS.” Holder’s press release called them “toxic mortgages.” Holder emphasized the “strength of the evidence of the wrongdoing committed by Citi….” Holder stated that Citi’s officers knowingly made false “reps and warranties.”

“Contrary to those representations, Citigroup securitized and sold RMBS with underlying mortgage loans that it knew had material defects.

Citigroup nevertheless securitized the loan pools containing defective loans and sold the resulting RMBS to investors for billions of dollars. This conduct, along with similar conduct by other banks that bundled defective and toxic loans into securities and misled investors who purchased those securities, contributed to the financial crisis.”


The U.S. Attorneys leading the investigation made these statements in the press release.

“‘Our teams found that the misconduct in Citigroup’s deals devastated the nation and the world’s economies, touching everyone,’ said U.S. Attorney of the Eastern District of New York Loretta Lynch. ‘The investors in Citigroup RMBS included federally-insured financial institutions, as well as a host of states, cities, public and union pension and benefit funds, universities, religious charities, and hospitals, among others. These are our neighbors in Colorado, New York and around the country, hard-working people who saved and put away for retirement, only to see their savings decimated.’”


The Federal Housing Finance Administration (FHFA) even got to play a part in the press release.

“Michael Stephens, Acting Inspector General for the Federal Housing Finance Agency said, ‘Citigroup securitized billions of dollars of defective mortgages, after which investors suffered enormous losses by purchasing RMBS from Citi not knowing about those defects. Today’s settlement is another significant step by FHFA-OIG and its law enforcement partners to hold accountable those who committed acts of fraud and deceit in the lead up to the financial crisis….’”


Note that Stephens was the only one to use the “f” word.

.......(snip).......

Holder Ignores the Criminals and Purports to Hold a Legal Fiction “Accountable”

Notice that Holder and his lieutenants did not identify any of Citi’s banksters who led, and were made wealthy by, some of the most damaging financial frauds in history. DOJ, inadvertently, demonstrated that the primary fraud scheme involved Citi’s senior officers “looting” Citi. Holder describes (but does not understand that he has done so) a classic case of accounting control fraud. These fraud schemes were described decades ago in the white-collar criminology literature, the financial regulatory literature, and the classic 1993 article by George Akerlof and Paul Romer entitled “Looting: The Economic Underworld of Bankruptcy for Profit.” They were then described (partially) again in the literature on “tunneling.” ...................(more)

The complete piece is at: http://neweconomicperspectives.org/2014/07/ag-holder-u-s-announces-indictment-citigroups-senior-officers-fraud.html



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Bill Black on the Citigroup settlement: "Misrepresentations is a fancy way of saying Citi lied" (Original Post) marmar Jul 2014 OP
Yeah, but Holder said something about wanting to protect voter rights, so ignore this. Scuba Jul 2014 #1
kick redqueen Jul 2014 #2
Rights without responsibilities. DirkGently Jul 2014 #3
So making the victims whole again ... GeorgeGist Jul 2014 #4

DirkGently

(12,151 posts)
3. Rights without responsibilities.
Sat Jul 19, 2014, 12:02 PM
Jul 2014

A fictitious "person" now has religious freedom to discriminate against real human beings, but faces no real consequences for committing crimes that would land a human being in prison.

They wreck the world economy, disappear trillions in middle-class wealth, and our answer is to heap more privilege and power and benefit on them.
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