New York Investigates Banks’ Role in Fiscal Crisis

[alp227]

Source: The New York Times

The New York attorney general has requested information and documents in recent weeks from three major Wall Street banks about their mortgage securities operations during the credit boom, indicating the existence of a new investigation into practices that contributed to billions in mortgage losses.

Officials in the office of the attorney general, Eric T. Schneiderman, have also requested meetings with representatives from Bank of America, Goldman Sachs and Morgan Stanley, according to people briefed on the matter who were not authorized to speak publicly. The inquiry appears to be quite broad, with the office’s requests for information covering many aspects of the banks’ loan pooling operations. They bundled thousands of home loans into securities that were then sold to investors such as pension funds, mutual funds and insurance companies.

It is unclear which parts of the byzantine securitization process Mr. Schneiderman is focusing on. His spokesman said the attorney general would not comment on the investigation, which is in its early stages.

Several civil suits have been filed by federal and state regulators since the financial crisis erupted in 2008, some of which have generated settlements and fines, most prominently a $550 million deal between Goldman Sachs and the Securities and Exchange Commission.

Read more: http://www.nytimes.com/2011/05/17/business/17bank.html

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If you live near NYC, this is a front page story for Tuesday's Times.

[peace4ever]

1. FINALLY!!!

:wtf:

[elleng]

2. Good news.

“Part of what prosecutors have the advantage of doing right now, here as elsewhere, is watching the civil suits play out as different parties fight over who bears the loss,” said Daniel C. Richman, a professor of law at Columbia. “That’s a very productive source of information.” . . .

The requests for information by Mr. Schneiderman’s office also seem to confirm that the New York attorney general is operating independently of peers from other states who are negotiating a broad settlement with large banks over foreclosure practices.

By opening a new inquiry into bank practices, Mr. Schneiderman has indicated his unwillingness to accept one of the settlement’s terms proposed by financial institutions — that is, a broad agreement by regulators not to conduct additional investigations into the banks’ activities during the mortgage crisis. Mr. Schneiderman has said in recent weeks that signing such a release was unacceptable.

[Po_d Mainiac]

12. Miller's "Class Action" blow job for the banksters

never was a serious suit to hold the banksters accountable. Mr. Schneiderman’s might actually lead to some prosecutions.

[boppers]

3. Is the NINJa fraud on the banks, or the ratings agencies?

Mortgates were given to people with No Income, No Job (NINJa), and those mortgages were bundled with others, and rated AAA. Either the banks were lying about what was in the bundles, or the rating agencies were lying about the ratings. Pretty simple.

[elleng]

4. U.S. Credit Rating Agencies Win Dismissal of Lawsuits.

http://wallstreetpit.com/74703-u-s-credit-rating-agencies-win-dismissal-of-lawsuits

[boppers]

6. Holy crap, they tried a 1st amendment defense?

Interesting that they also argued "Hey, we didn't actually sell this shit, so it's not our fault"... which, I guess, is like the FDA not being held responsible for a crappy drug being on the market.

Except, of course, there isn't a federal agency that does "product safety" for securities, is there?

Suggestions for a better analogy?

[Proletariatprincess]

5. Why has this taken so damn long?

And why isn't the Justice department working on this?
Oh. I know why. This is all just show. The banks own this country and it will all blow over with just a slap on the wrist for propaganda reasons. Nothing will change.
Rule of law my sweet Irish ass. The USA is toast.

[boppers]

7. Thousands of people, millions of pieces of evidence.

Tons of plausible deniability.

By design.

[girl gone mad]

9. Schneiderman is a bit of an outsider to the political machine.

He was not the Democratic party's favored candidate in the primary, by any means.

Let's see if he has what it takes, or if he folds in the end, like Cuomo did.

[Ghost Dog]

10. Or if they whack him with a 'sex scandal',

an 'unfortunate accident' or whatever.

[girl gone mad]

8. This is actually much better news than I had assumed at first.

It looks like this has torpedoed the settlement talks with the 50 state Attorney Generals. Maybe the banks won't end up walking away with a little slap on the wrist for their massive fraud, after all.

[Hubert Flottz]

11. Too bad the DOJ is a total sellout STILL!

No "CHANGE" we can count on there.

[Hubert Flottz]

13. Early in Bush's clusterfuck administration I recall reading at...

several sources, how fearful the GOP and their corporate masters were that pension fund overseers were gaining clout in the corporate boardrooms due to large sums of pension money. Looks like the Wall Street Masters and their deregulating political pimps found a way to neutralize any corporate intervention from the great unwashed pensioners and grab all that cash at the same time. Chris Cox and BushCo made that happen. They tried to grab the Social Security piggy bank at the same time. Now the attack on the working class has shifted to the state level. The next time a GOPer pResident enters the White House the lower 98% on the money scale will be totally wiped out, IMHO. Gilded Age here we come.

[Hotler]

14. k&r n/t

[Javaman]

15. I'm not breaking out the champagne yet.

I'll take the wait and see before I do any sort of celebrating.

There are a lot of wealthy people involved and the last thing they want is to 1) lose any of their wealth 2) go to prison 3)lose any of their wealth.

Did I forget to say that they don't want to lose any of their wealth?