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.

 

Schneiderman Signed Tolling Agreements With MBS Issuers to Extend Statute of Limitations

By: Friday October 5, 2012 10:40 am

A financial firm or any other defendant doesn’t allow a tolling agreement out of the goodness of its heart. It comes out of a negotiated process. The prosecutor gets to stop the clock on the statute of limitations but must give up something in return. Maybe they’re given the opportunity to stop Schneiderman from filing a case at all, or maybe they’ve moved immediately to the settlement phase. Or maybe Schneiderman got the tolling agreement in exchange for agreeing not to prosecute or name any individuals in the cases. A tolling agreement isn’t free, in other words. And it would be good to know the cost of this.

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.

Financial Fraud Prosecutions Coming Soozzzzzzzzzzzzzzzzzzz…

By: Friday September 21, 2012 10:45 am

I strongly considered not even remarking on the “news” that the long-silent Residential Mortgage Backed Securities (RMBS) working group, the vaunted task force that would finally and definitively bring accountability to the perpetrators of the financial crisis, would soon, really this time, announce major actions. If you want to announce something, go ahead and announce it. This string-along is really embarrassing.

Financial Fraud Prosecutions Sacrificed in Favor of Hit Jobs on Political Enemies

By: Tuesday September 4, 2012 1:20 pm

Talking Points Memo picks up on Eric Schneiderman’s investigation of Bain Capital’s tax avoidance strategies, and asks a couple questions about why the New York Attorney General is probing something clearly within the purview of the IRS.

Goldman Sachs Escapes Liability From SEC in Mortgage Backed Securities Case

By: Thursday August 9, 2012 1:40 pm

Goldman Sachs announced in a regulatory filing that the Securities and Exchange Commission has closed their investigation into the firm misleading investors on a $1.3 billion subprime mortgage-backed security deal.

Schneiderman Claims Romney Administration Would Shut Down Mortgage Fraud Investigations; Apparently, They Aren’t Shut Down Already

By: Thursday August 9, 2012 6:40 am

It has now been six months since the announcement of the foreclosure fraud settlement between multiple federal agencies, the state Attorneys General and the five leading banks. It has also been six months since the establishment of the RMBS working group, the task force inside the larger financial fraud unit at the Justice Department, which is supposed to be ferreting out fraud among the major banks in the securitization phase of the housing bubble. New York Attorney General Eric Schneiderman famously said that if nothing happened in the task force within six months, he would walk away in very loud fashion.

I think it’s fair to say that nothing has happened.

Barofsky Set to Enter National Debate With Book on TARP’s Failures

By: Monday July 23, 2012 9:10 am

It’s fair to say that former Special Inspector General for TARP, Neil Barofsky plans to become as an important part of the national conversation. In an interview this a.m. Barofsky was unyielding in saying that you cannot view TARP in a vacuum, both in the sense of that being the only emergency support afforded the banks or in the sense of TARP being solely designed to save the banks, and not to help homeowners or spur lending.

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