Schneiderman Files Suit Against Credit Suisse for Securities Fraud, Days After SEC Settled Same Conduct

By: Tuesday November 20, 2012 2:35 pm

Continuing on the theme of prosecutions for fraud during the housing collapse, though in this case civil rather than criminal ones, New York Attorney General Eric Schneiderman just announced a new lawsuit against Credit Suisse for defrauding investors in its mortgage backed securities business. The case mirrors the previous suit filed by Schneiderman against JPMorgan Chase over Bear Stearns’ MBS business. Curiously, both of these banks engaged in settlements just this past weekwith the SEC over precisely the same conduct, settlements where they didn’t have to admit wrongdoing.

 

The Potential Conflict of Interest Issue Inside the Schneiderman/JPMorgan Chase Case

By: Wednesday October 3, 2012 9:28 am

Much thanks to FT Alphaville for highlighting my storyabout Eric Schneiderman’s lawsuit against JPMorgan Chase over Bear Stearns’ dodgy mortgage-backed securities deals. As I have stressed, nothing in this case indicates there’s been much new investigation at all, or participation from the federal task force. It borrows liberally from a lawsuit by mortgage bond insurer Ambac, which was filed by Karla Sanchez, a former litigator who now works in Schneiderman’s office as the Deputy AG for Economic Justice.

Timing and Scope: The Issues With the Schneiderman JPMorgan Chase Lawsuit

By: Tuesday October 2, 2012 11:35 am

the lawsuit against Bear Stearns on securitization fraud put together by Eric Schneiderman’s office is that it’s rooted in reality. My issues are primarily with timing and scope. There’s no reason this case couldn’t have been filed in 2011. There’s literally nothing in the case that advances what we knew from these other cases in any meaningful way. If the New York AG’s office wanted to pursue a parallel proceeding, they had every ability to do it in 2011, before the foreclosure fraud settlement. Now they’ve given up claims they could have pursued.

Schneiderman Sues JPMorgan Chase; Lawsuit Mirrors Old Cases

By: Tuesday October 2, 2012 6:10 am

The delay in bringing the case cost tens of billions of potential exposure for JPMorgan Chase. And more than anything, the lack of federal participation in the suit shows that the federal agencies involved in the task force are simply disinterested in prosecution, forcing Schneiderman to cobble together an off-the-shelf suit from other sources to make it look like this move against the banks represents anything real. The timing, one month before voters go to the polls in the Presidential election, is similarly obvious.

The Ambac Suit: Bear Stearns Execs Double-Dipped, Committed Criminal Fraud on Investors

By: Tuesday January 25, 2011 5:20 pm

The mortgage traders at Bear, who now are spread out across the financial sector, sold purposefully bad securities to investors – emails revealed show that they told superiors they were selling “a sack of shit.” They got data on their pools of mortgages bundled up in securities deals that came back with high percentages of bad underwriting or even loans already slipping into default. They falsified that data for the rating agencies to get AAA ratings, never told the investors about the bad loans in the pools, and sold the shit as gold. But it gets worse.

They got paid by the investors for selling the mortgage-backed security, AND they got paid by the originator for taking back the bad loan. So Bear traders made money on the same mortgage twice. Only the investors could force a put-back on an originator after the security was sold – Bear Stearns didn’t have a legal claim on the loan after they sold it. They did so anyway.

The Five Stages of Grief, MOTU Edition

By: Saturday October 16, 2010 9:00 am

Watching the MOTUs as their financial services universe shakes and shudders around them reminds me of the five stages of death and dying. There’s lots of denial and anger coming out of the MOTUs, and hints of bargaining, but little sign of depression and acceptance. But it’ll come . . .

FDL Movie Night: Plunder, The Crime of Our Time

By: Monday August 23, 2010 5:00 pm

How do you steal $196 trillion dollars and get away with it? In Plunder, The Crime of Our Time, journalist Danny Schechter dissects the crime scene, Wall Street.

Why Worry About New Regulations When We Don’t Enforce the Old Ones?

By: Tuesday March 30, 2010 6:01 am

You can tell that financial reform will be the next heavy lift in Washington because everyone’s chattering about it today, and proposing a variety of solutions. But they actually come down to something a lot simpler than what’s being proposed: regulators need a few clear rules, and they need to do their jobs.

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