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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsBill 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 Holders 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 DOJs 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 Citis officers. Holder states: The banks 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. Holders press release called them toxic mortgages. Holder emphasized the strength of the evidence of the wrongdoing committed by Citi . Holder stated that Citis 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 Citigroups deals devastated the nation and the worlds 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. Todays 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 Citis 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 Citis 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
Scuba
(53,475 posts)1. Yeah, but Holder said something about wanting to protect voter rights, so ignore this.
redqueen
(115,096 posts)2. kick
DirkGently
(12,151 posts)3. Rights without responsibilities.
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.
GeorgeGist
(25,294 posts)4. So making the victims whole again ...
was never an option.