7 of the Nastiest Scams, Rip-Offs and Tricks From Wall Street Crooks
How many high-level Wall Street players have been put in jail for the crimes that led to the financial crisis? Not. Even. One.
Last week several executives from the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, known as “Fannie Mae and Freddie Mac,”were sued by the Securities and Exchange Commission (SEC) for civil fraud. They were charged with misleading investors about the quality of the loans they were buying. But this is a civil suit, not a criminal prosecution, so they face no possibility of jail time. And the SEC is notoriously ready to settle these cases, accepting fines without admission of guilt. Meanwhile, last month Bloomberg News revealed that the Federal Reserve secretly loaned $1.2 trillion to banks on Dec. 5, 2008, their neediest day, even as some of their CEOs were assuring investors their banks were healthy. Are these CEOs facing prosecution or even civil fraud suits for doing the very same thing? Not so much.
These stories barely even reveal the tip of the iceberg of financial malfeasance. We have been hearing for years now about the scams, frauds, rackets, schemes, tricks and various other ways that people on Wall Street made gazillions while crashing the economy. The one thing we haven’t heard anything about is anyone at the top being held criminally accountable … for anything!
Given these recent developments, the end of a bad year seems like a good time to take a look back at just a few examples of what was, and in too many cases, still is going on. So here is a little holiday-season nudge to all the attorneys general who may be hesitant to take them on -- if not with jail time, then at least The banksters still have faced no accountability.
They got bailed out … will We, the People continue to get sold out?
After the housing bubble collapsed, and the “innovative” mortgage “products” that were created by the financial industry began to blow up, with people’s payments rising into the stratosphere just as housing prices dropped and people were losing their jobs, the banks were faced with literally millions of foreclosures to process. But, being Wall Street outfits, they didn’t want to be responsible for doing any actual work themselves. Best to outsource the work to someone … cheap. And that is what they did – and are still doing .
The banks hired “robosigning” outfits to process the foreclosures, which resulted in accusations of documentation fraud, where the outfits file affidavits claiming to have documents they do not have. The original mortgages often did not include proper paperwork to clearly prove who signed the loans or who had title, etc. These firms would forge signatures, sign affidavits saying they had proper paperwork when they did not, and a number of other ruses to speed foreclosures. And courts set up what were called “rocket dockets” to assist the process. David Dayen at Firedoglake (Sept 2010): Foreclosure Fraud as Cover-Up for Mortgage Fraud ,
Banks never had the proper documentation for these loans, after handing them out to anyone with a pulse, and slicing and dicing them through securitization. The fraud allows banks and the state and local governments explicitly facilitating this by setting up special, speedy foreclosure courts the ability to paper over these objections. If the lenders had to obey the law and use a deliberative process to affirm the title ownership, practically nobody would get evicted. If enough of those struggling can be forced out of their homes, and the fraudulent mortgages thrown in the dumper, the banks can save their balance sheets.