More Foreclosure Fraud: HUD IG shows violations of False Claims Act by five top banks

[Winehole23]

HUD IG Finds Document Fraud that Federal Foreclosure Task Force Couldn’t (http://news.firedoglake.com/2011/05/17/hud-ig-finds-document-fraud-that-federal-foreclosure-task-force-couldnt/)

By: David Dayen (http://news.firedoglake.com/author/dday/) Tuesday May 17, 2011 6:24 am

I wrote yesterday that nothing seemed to be changing (http://news.firedoglake.com/2011/05/16/servicers-still-abusing-homeowners-service-members-regardless-of-the-law/) in the foreclosure crisis. Regulators were still trying to enforce the law with inadequate information (perhaps deliberately), and the banks were still abusing their customers. But late yesterday we got word of federal audits from HUD (http://www.huffingtonpost.com/2011/05/16/foreclosure-fraud-audit-false-claims-act_n_862686.html) showing violations by the top five banks of the False Claims Act:

A set of confidential federal audits accuse the nation’s five largest mortgage companies of defrauding taxpayers in their handling of foreclosures on homes purchased with government-backed loans, four officials briefed on the findings told The Huffington Post.


The five separate investigations were conducted by the Department of Housing and Urban Development’s inspector general and examined Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial, the sources said.


The audits accuse the five major lenders of violating the False Claims Act, a Civil War-era law crafted as a weapon against firms that swindle the government. The audits were completed between February and March, the sources said. The internal watchdog office at HUD referred its findings to the Department of Justice, which must now decide whether to file charges [...]


The resulting reports read like veritable indictments of major lenders, the sources said. State officials are now wielding the documents as leverage in their ongoing talks with mortgage companies aimed at forcing the firms to agree to pay fines to resolve allegations of routine violations in their handling of foreclosures.

Well, yes, that’s how you do a negotiation: you amass evidence as leverage against the opposition.


A few things jump out. One, this is a similar charge, from the same HUD IG findings, that the Justice Department used on Deutsche Bank in a $1 billion lawsuit, saying they lied to acquire insurance reimbursements for FHA loans that went into foreclosure. That was probably a warning shot to the big banks as well as a case in its own right. Second, this is the reason HUD has been so involved in the state AG negotiations. This amounts to swindling their department out of money. Third, this shows what a useless cover-up that federal foreclosure task force turned out to be. Over the same time period, the HUD Inspector General, a relative backwater compared to the mix of regulators working on the task force, found multiple violations of law. Fourth, the False Claims Act is not necessarily the only law I would think to use to describe the banks’ abuses in the foreclosure crisis. But sometimes you have to use what you can. And essentially, this tracks a familiar crime. What the HUD IG found was that the documents they used to file for reimbursement were faulty.

Two of the firms, including Bank of America, refused to cooperate with the investigations, according to the sources. The audit on Bank of America finds that the company — the nation’s largest handler of home loans — failed to correct faulty foreclosure practices even after imposing a moratorium that lifted last October. Back then, the bank said it was resuming foreclosures, having satisfied itself that prior problems had been solved.


According to the sources, the Wells Fargo investigation concludes that senior managers at the firm, the fourth-largest American bank by assets, broke civil laws. HUD’s inspector general interviewed a pair of South Carolina public notaries who improperly signed off on foreclosure filings for Wells, the sources said.

The article makes the case that this will help the state AGs reach a resolution with the banks over their conduct. But that settlement appears to be on the wane, as another AG just started freelancing (http://www.nytimes.com/2011/05/17/business/17bank.html?_r=1), requesting documents over another point of exposure for the banks:

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 Eric T. Schneiderman’s, office 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 attorney general’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.

Unclear which part of the securitization process Schneiderman wants to probe, but certainly he doesn’t feel constrained by any ongoing settlement with the banks to trim his sails and follow any release of claims. And as Shahien Nasiripour says in his story, a number of state AGs have followed suit:

The state of Illinois has begun examining potentially-fraudulent court filings, looking at the role played by a unit of Lender Processing Services. Nevada and Arizona already launched lawsuits against Bank of America. California is keen on launching its own suits, people familiar with the matter say. Delaware sent Mortgage Electronic Registration Systems Inc., which runs an electronic registry of mortgages, a subpoena demanding answers to 75 questions. And New York’s top law enforcer, Eric Schneiderman, wants to conduct a complete investigation into all facets of mortgage banking, from fraudulent lending to defective securitization practices to faulty foreclosure documents and illegal home seizures.

We’re moving in the right direction with these investigations of fraud and abuse. Let’s keep it that way. If government can’t fix the housing crisis (http://www.cbsnews.com/stories/2011/05/15/ftn/main20062782.shtml?tag=cbsnewsTwoColUpperPromoArea ), at least they can enforce the law.

http://news.firedoglake.com/2011/05/17/hud-ig-finds-document-fraud-that-federal-foreclosure-task-force-couldnt/

[boutons_deux]

Will New York's Attorney General Finally Nail the Banks?

Proving that banks shaded the truth about mortgage-backed securities should not be very hard. Many on Wall Street suspected or knew these assets were toxic even as they continued to promote them to investors. All Schneiderman needs to do, it would seem, is find evidence of these private doubts and then contrast them to public cheerleading and he has his case.

Veteran observers of Wall Street chicanery will recall the simplicity of Eliot Spitzer's case against the investment analysts Jack Grubman and Henry Blodget. Spitzer subpoenaed the email traffic of these guys and found them ridiculing the very stocks they were promoting at the behest of their investment banker masters.

Now the bad news: Even if Schneiderman finds some smoking guns, it's unlikely that anyone will face a judge and jury, much less prison, as a result of the AG's investigation. Why? Because actually trying these cases would be hugely expensive and time consuming, requiring resources that may be beyond the AG's office. Recall that Enron's Jeff Skilling and Ken Lay spent as much as $70 million defending themselves against charges that they misrepresented Enron's financial position and the case dragged on for years before a conviction.

Even Eliot Spitzer didn't bring any Wall Street big shots to trial on criminal charges. Instead, he got them to agree to civil settlements in which they paid large penalties to the government -- although not as large as the fortunes they made. Blodget and Grubman both walked away from their confrontations with Spitzer as wealthy men. And, in their settlements with the AG, they didn't admit to any wrongdoing.

If there is justice from Schneiderman's worthy effort, it is not likely to be satisfying.

http://www.huffingtonpost.com/david-callahan/will-new-yorks-attorney-g_b_863255.html?view=print

[boutons_deux]

The lenders have offered $5 billion to help home-owners in trouble and settle allegations made by a coalition of 50 state attorneys general and state bank supervisors, the Housing and Urban Development, the Treasury Department, the Justice Department and the Federal Trade Commission. But violation of the Civil War era False Claims Act allows the government to recover three times the amount of damage caused on top of fines.

According to a report obtained in March by Nasipour from the Bureau of Consumer Financial Protection, by taking abusive shortcuts, the five companies under audit have saved themselves more than $20 billion in the past four years. That could mean $60 billion in damages plus fines.

http://www.dailykos.com/story/2011/05/17/976395/-Mortgage-lenders-were-cheats,-doh-Will-the-government-treat-them-accordingly?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+dailykos%2Findex+%28Daily+Kos %29

[boutons_deux]

A Low Bid for Fixing a Big Mess


http://www.nytimes.com/2011/05/15/business/15gret.html?_r=3&ref=business&pagewanted=print

[boutons_deux]

Too Big To Fail is also Too Wealthy To Jail

[boutons_deux]

Yves Smith trashing the bankers.

Wednesday, May 18, 2011

Bank Tout Dick Bove Proves His Ignorance in Defending of His Meal Tickets


Is Dick Bove’s put-foot-in-mouth-and-chew exercise yesterday proof of the eagerness of the banking industry to push back against any and all interference in their ability to milk the public, or merely that Bove is a great negative indicator (one of his most famous calls was to buy Citi in early March 2008. You’d have lost more than 3/4 of your money if you’d followed his advice.)

News that New York attorney general Eric Schneiderman has opened an investigation into the mortgage activities of Goldman, Morgan Stanley, and Bank of America sent Bove into a tizzy. Despite ample evidence of bank malfeasance (forgeries, fabricated documents, foreclosing on the wrong people, inability to find notes, force place insurance, and the report that the US Trustee, an arm of the Department of Justice, has found widespread, significant overcharges) Bove insists their right to prey on the public must be preserved…..because it will hurt lending.

I’m not making this up. From Forbes:

Bove calls Schneiderman’s a “witch hunt” and says the efforts are more likely a way for the AG to “make a name for himself.”

“Only in New York does the attorney general’s office go after the state’s strongest industry. In Texas, you don’t have the attorney general going after the oil industry. In Michigan you don’t have the attorney general going after the auto industry and in Florida you don’t have the AG’s office going after the tourist industry.

It takes a certain perverse skill to say so many wrong things in a short space. The TBTF banks are in no way private companies. They are so heavily subsidized as to be welfare departments for the rentier classes. And it’s idiotic to use cash generation as an excuse to refuse to pursue law-breakers. By that standard, Bove wants there to be no enforcement at all, since drug dealing and prostitution are also highly profitable enterprises and the core of some local economies, like the southern border of the US.

Bove also compared Schneiderman to Eliot Spitzer and Andrew Cuomo. Aside from both being former New York AGs, Spitzer and Cuomo have little in common. Spitzer was famously aggressive, while Cuomo was almost entirely absent during the first two years of his term, then bestirred himself to launch a few cases prior to his gubernatorial bid. We don’t know yet what kind of AG Schneiderman will be; in fact, he made troublingly conciliatory remarks in his early days in office. But the fact that Bove suggests that Cuomo was some sort of tough enforcer calls his knowledge into serious question.

These remarks should seal any doubts about Bove’s expertise:

“There are over 10,000 suits filed against JPMorgan Chase and they are supposed to be the good guys. If you assume Bank of America and Wells Fargo are facing something similar then there are 30,000 to 35,000 suits out there against these banks,” he says.

That hurts everyone, he says. “The ability for banks to function becomes cumbersome and in turn they have provided no assistance to the economy since 2008 by not lending,” he says.

Bove has just told us he knows nothing about the mortgage business. The number of lawsuits is large because the overwhelming majority are borrowers fighting foreclosures. The cost of those actions comes out of the hides of investors in mortgage securitizations, not out of the banks. And there is no evidence of scarcity of mortgage credit, since mortgage rates are close to record lows. Banks themselves say the issue is demand, not the availability of credit. Now that credit is virtually all on the government dime and the government has tightened lending standards, and pretty much everyone (except apparently Bove) thinks that’s a good thing, since a quite a few people got loans in the bubble years who weren’t credit-worthy.

And Bove has the real problem backwards. The private mortgage securitization market is dead precisely because the banks have refused to clean up their bad practices. Many investors would like to sue but are afraid to because they depend on Wall Street for transcation flow. They’d applaud a state AG taking up their issues for them. And that in turn would eventually bring private investors back to the market. But Bove apparently would prefer to keep his big meal tickets on the government drip feed.

In addition, the author of the post, Halah Touryalai, is as incompetent as Bove. Get a load of this:

Schneiderman is bringing the investigation independent of a separate mortgage investigation that was launched by the 50 state attorneys general against big banks.

This is factually incorrect. As we have discussed at considerable length, and if Touryalai could easily ascertain if she could be bothered to do minimal homework, there has been no investigation by the 50 state AG effort (Tom Miller’s one effort to claim otherwise has been disputed by his fellow AGs, so he has wisely gone silent). She also inaccurately claims the AG effort is moving to a settlement, when there was no deal to be made (the banks wanted a broad waiver of liability, which a considerable number of AGs were unwilling to grant).

This also discredits Touryalai:

Of course, the other major mortgage securitization battle that’s been ongoing is the one between Bank of America and major players like PIMCO, BlackRock Financial, the New York Federal Reserve Bank, Metlife and others. The group argues that BofA has to buy back soured mortgages bonds because they were sold with false representations about their quality. In its last quarterly filing, BofA said that the investor group now represents $177.1 billion in bonds.

Sports fans, that is no “battle”, that was a bluff that went nowhere. If Touryalai could be bothered to do the most basic research, she’d know that an attorney at a boutique but well regarded litigator put a big PR push to make a mere letter (letter, not a lawsuit) sound like real artillery. We and other bank beat watchers like Chris Whalen said this gambit would go all of nowhere, and it has. The letter, sent in October, has not been followed up with any litigation or even threats in public after Bank of America sent a tart smackdown. Moreover, even if the case had moved forward, we estimated it to be worth at most $1 billion.

So you have a noisy industry mouthpiece leading a writer who likes taking sensationalistic dictation. I suppose that passes for journalism at Forbes.

http://www.nakedcapitalism.com/2011/05/bank-tout-dick-bove-proves-his-ignorance-in-defense-of-his-meal-ticket.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capi talism%29

[Winehole23]

With the blessing of the White House and the Justice Department, the Department of Housing and Urban Development is attempting (http://www.gpo.gov/fdsys/pkg/FR-2015-05-15/pdf/2015-11807.pdf) to sneak through a major policy change that would enable big banks convicted of felonies to continue lending through a federal mortgage program, according to federal records (http://www.regulations.gov/#%21documentDetail;D=HUD-2008-0054-0007) and government officials.


The housing agency wants to quietly delete a requirement for lenders to certify they haven’t been convicted of violating federal antitrust laws or committing other serious crimes. HUD proposed (https://www.federalregister.gov/articles/2015/05/15/2015-11807/60-day-notice-of-proposed-information-collection-application-for-fha-insured-mortgages) the move on May 15, without detailing the reasoning behind the change. It’s now considering public comment, with an eye towards finalizing the proposal.


Five years after lawmakers and the Obama administration said the Dodd-Frank (http://www.cftc.gov/lawregulation/doddfrankact/index.htm) financial reform law would end the problems caused by banks perceived to be “too big to fail,” HUD's move could represent yet another capitulation from federal officials who want to appear to be tough on Wall Street’s crimes, but don’t want big banks to suffer the consequences typically associated with felony convictions.


The main beneficiaries of the proposal would be JPMorgan Chase, the nation's largest bank with more than $2.4 trillion (http://files.shareholder.com/downloads/ONE/491190372x0x839056/BD2D1563-9128-4752-B5DD-7255CD7B259D/ERF_Supplement_2Q15_-_FINAL.pdf) in assets, and Citigroup, the third-largest U.S. bank with $1.8 trillion (http://www.citigroup.com/citi/investor/data/qer215s.pdf?ieNocache=618) in assets, according to Federal Reserve data (http://www.ffiec.gov/nicpubweb/nicweb/HCSGreaterThan10B.aspx).

http://www.huffingtonpost.com/entry/obama-hud-big-banks_55c4f2f2e4b0923c12bcc4b1

[Winehole23]

Both JPMorgan and Citi pleaded guilty to criminal federal antitrust violations in May, marking the first time in a decade (http://www.justice.gov/archive/tax/usaopress/2005/txdv050530.html) that large American banks have pleaded guilty to criminal charges (http://www.justice.gov/sites/default/files/ag/legacy/2011/08/23/06-30-1992.pdf). But HUD's new proposal, the lawmakers wrote in their letter (http://www.warren.senate.gov/files/documents/Letter_to_Sec%20_Castro_and_Director_Donovan.pdf) to Castro, would allow it "to turn a blind eye" to the banks' criminal acts, “putting homebuyers and taxpayers at additional risk.”


The proposed change would also sharply contrast with the way HUD treats low-income Americans who live in federally subsidized housing. Federal rules allow local housing authorities to evict tenants immediately if they're arrested for certain crimes, such as marijuana possession. The accused can lose their homes even if they’re ultimately found not guilty.


“Turning a blind eye to rich and powerful banks that have plead to very serious felonies really marks the worst kind of double standard,” said Runa Rajagopal (http://www.bronxdefenders.org/staff/runa-rajagopal/), a supervising attorney at The Bronx Defenders, a nonprofit firm that represents low-income clients in New York.

[Winehole23]

One egregious example came in 2012, when the Justice Department allowed U.K. banking giant HSBC to dodge a criminal indictment -- despite evidence that it violated U.S. sanctions and allowed Mexico's Sinaloa Cartel and Colombia's Norte del Valle Cartel to launder their drug proceeds through the bank’s U.S. and Mexico units. Drug traffickers laundered at least $881 million through HSBC, according to (http://www.justice.gov/opa/pr/hsbc-holdings-plc-and-hsbc-bank-usa-na-admit-anti-money-laundering-and-sanctions-violations) the Justice Department.

[boutons_deux]

BigFinance is UNTOUCHABLE

America is fucked and unfuckable.

disagree? tell how to stop the stuff in WH's links

Greenberg and stockholders are still going after the Feds for saving AIG.

[SpursforSix]

BigFinance is UNTOUCHABLE

America is fucked and unfuckable.

disagree? tell how to stop the stuff in WH's links

Greenberg and stockholders are still going after the Feds for saving AIG.

All on Obama's watch.

[boutons_deux]

All on Obama's watch.

you prove yourself stupid

Do you think a Repug DoJ would have done any different? I doubt there'd even be suits and convictions, never mind hand-slaps and operating as before.

And the Repugs have been gutting IRS and CFPB non-stop "under Obama's watch"

[SpursforSix]

you prove yourself stupid

Do you think a Repug DoJ would have done any different? I doubt there'd even be suits and convictions, never mind hand-slaps and operating as before.

And the Repugs have been gutting IRS and CFPB non-stop "under Obama's watch"

Don't know. All I know is that things are pretty fucked up right now. Of course, you, like your President, are all about pointing the finger everywhere but yourself.

[Splits]

Probably the 2nd greatest failure of the Obama presidency is the fact that not a single bankster or wall street exec ever faced a criminal charge for their reckless destruction of the economy.

[boutons_deux]

Don't know.

... you have no need to feign stupidity.

[boutons_deux]

Barclays Agrees to Settle Mortgage Lawsuits for $325 Million

The British bank Barclays (http://topics.nytimes.com/top/news/business/companies/barclays_plc/index.html?inline=nyt-org) said on Monday that it had agreed to pay $325 million to settle two civil lawsuits related to the sale of residential mortgage (http://topics.nytimes.com/your-money/loans/mortgages/index.html?inline=nyt-classifier)-backed securities in the United States.

In a news release (http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/12545498.html), Barclays said it expected to book a charge of $325 million related to the settlements as part of its third-quarter results, which the bank will report on Oct. 29.

The lawsuits were filed by the National Credit Union Administration, a federal agency that regulates federal credit unions, in 2012 and relate to the sale of “faulty” residential mortgage-backed securities to corporate credit unions.

Once the settlements are completed, the National Credit Union Administration said it would seek to dismiss cases in federal courts in New York and Kansas.

“In order to help minimize losses and future costs to the credit union system, NCUA is committed to pursuing recoveries against financial firms we maintain contributed to the corporate crisis,” Debbie Matz, the National Credit Union Administration chairwoman, said in a news release.

“The agency has a statutory obligation to secure recoveries for credit unions and ensure that consumers remain protected, and we take that responsibility very seriously,” she added.

Barclays didn’t admit fault as part of the settlement,

http://www.nytimes.com/2015/10/20/business/dealbook/barclays-agrees-to-settle-mortgage-lawsuits-for-325-million.html?partner=rss&emc=rss&_r=0

no fault, no jail, pocket change paid, carry on as before.

[Winehole23]

Goldman Sachs settles mortgage fraud allegations for $5B.


A.G. Schneiderman-Led State & Federal Working Group Announces $5 Billion Settlement With Goldman Sachs Settlement Includes $670 Million For New Yorkers, Including $190 Million In Cash And $480 Million In Consumer Relief Committed To Mortgage Assistance, Principal Forgiveness, And Affordable Housing Programs

http://www.ag.ny.gov/press-release/ag-schneiderman-led-state-federal-working-group-announces-5-billion-settlement-goldman

[Winehole23]

sweetheart deal?


State and federal officials said on Monday that Goldman Sachs (http://www.nytimes.com/topic/company/goldman-sachs-group-inc?inline=nyt-org) would pay $5.1 billion to settle accusations of wrongdoing before the financial crisis.


But that is just on paper. Buried in the fine print are provisions that allow Goldman to pay hundreds of millions of dollars less — perhaps as much as $1 billion less — than that headline figure. And that is before the tax benefits of the deal are included.


The bank will be able to reduce its bill substantially through a combination of government incentives and tax credits. For example, the settlement calls for Goldman to spend $240 million on affordable housing. But a chart attached to the settlement (https://www.justice.gov/opa/file/839906/download) explains that the bank will have to pay at most only 30 percent of that money to fulfill the deal. That is because it will receive a particularly large credit for each dollar it spends on affordable housing.


Goldman is the last of the major American banks to settle with the government. Past deals with other banks also contained some of these concessions, but Goldman appears to have negotiated an even sweeter deal on certain points. For all the banks, the credits suggest that the amounts that the banks will have to actually spend on consumer relief will be much lower than the numbers announced in the news releases.

http://www.nytimes.com/2016/04/12/business/dealbook/goldman-sachs-to-pay-5-1-billion-in-mortgage-settlement.html?ref=business&_r=0

[boutons_deux]

sweetheart deal?

http://www.nytimes.com/2016/04/12/business/dealbook/goldman-sachs-to-pay-5-1-billion-in-mortgage-settlement.html?ref=business&_r=0

yep, having screwed Human-Americans, Goldman Sacks has Human-American taxpayers to its penalty.

[Winehole23]

The statement of facts (https://www.justice.gov/opa/file/839891/download) in the settlement tells a story familiar to anyone who followed the financial crisis or saw The Big Short. Like the other big banks, Goldman Sachs peddled residential Mortgage-Backed Securities (MBS), which is another way of saying they put bunches of crappy loans into bundles. They then sold those bundles to investors while vouching for their quality, when in reality they hadn't bothered to look into borrower's ability––or even desire––to repay them. As laid out in the settlement, between December 2005 and 2007, Goldman's practice was to spot check various loans to see if they met underwriter's guidelines. In many cases, 80 percent of the loans went unchecked. In fact, in numerous loan pools, more than 20 percent of the loans were graded as "EV3," which is shorthand for saying they carried an unacceptable level of risk and were basically doomed to fail.


Even when shit started to hit the fan in 2006, Goldman did not take its foot off the pedal. Fremont Bank was a top-priority client and originator of many of these bad loans, and in the middle of that year, Goldman found out that the smaller bank's rate of early payment defaults was increasing in a way that should have set off an alarm. But at no point did Goldman put Fremont on their no-bid list, even while the client had unpaid claims from the defaults they had yet to even settle. Around the same time, an outside analyst gave a positive report on the stock performance of Countrywide, another Goldman client that specialized in subprime mortgages. "If they only knew," wrote (http://www.nytimes.com/2016/04/12/business/dealbook/goldman-sachs-to-pay-5-1-billion-in-mortgage-settlement.html) the head of due diligence at Goldman Sachs, referencing the report.


Well all know what happened as a result of this cavalier indifference. People lost their homes and the country spiraled into an economic recession unlike any since the Great Depression––one that left people feeling so hopeless that thousands in North America and Europe committed suicide (http://www.huffingtonpost.com/2014/06/13/suicide-recession_n_5491687.html). And while the too-big-to-fail banks continue to operate largely as they did, the rest of the country is still cleaning up the mess. According to the Government Accountability Office (http://www.gao.gov/assets/660/652196.txt) (GAO), the gross negligence and misrepresentation Goldman Sachs (and other banks) engaged in cost American homeowners $9.1 trillion on paper, and the broader recession cost (http://www.huffingtonpost.com/2013/02/14/financial-crisis-cost-gao_n_2687553.html) the economy $22 trillion.




"There's very little in the settlement that will deter bad conduct in the future," Miller, the former Congressman, tells me. "Investors appear to get nothing out of this. The employees involved not only didn't have to worry about how they would look in orange jumpsuits, but they get to keep the bonuses they got paid a decade ago. There has been very little justice."http://www.vice.com/read/why-you-should-care-about-big-banks-cutting-deals-with-the-feds-to-avoid-prosecution

[Winehole23]

SEC was more interested in a quick PR hit on Goldman than following the facts wherever they may have led:


The details of the investigation into Abacus at my level as trial counsel, which I provided to Pro Publica earlier this year, compels the conclusion that the SEC, its chairman at the time, Mary Schapiro, and the leadership of the Division of Enforcement were more interested in a quick public relations hit than in pursuing a thorough investigation of Goldman, Bank of America, Citibank, JP Morgan and other large Wall Street firms. Although the emails and documents I produced to Pro Publica stemming from my role as the designated (later replaced) trial attorney for the Division of Enforcement are excruciatingly boring to all but the most dedicated securities lawyer, even a lay person can observe that the Division of Enforcement was more anxious to publicize a quick lawsuit than to follow the trail of clues as far up the chain-of-command at Goldman as the evidence warranted. Serious consideration also never was given to fraud theories in any of the Big Bank cases stemming from the Great Recession that would better tell the story of how investors were defrauded and who was responsible, due either to dereliction or design.


Instead, the SEC restricted its investigation to the narrowest theory of liability, had to be pressed (by me) to go even one short rung above the lowest level Goldman supervisor in its investigation (which took months to push through, though investigative subpoenas are frequently issued on far less in far smaller cases) and finally dropped other investigations of Goldman in return for a $550 million settlement announced July 15, 2010. (https://www.sec.gov/litigation/litreleases/2010/lr21592.htm) To my knowledge (I retired in March 2014), the SEC never again pursued Goldman for its mortgage securities fraud or other major fraud. There is no evidence on the SEC website that it did so.

http://www.watchthecircus.com/financial/why-i-belatedly-blew-the-whistle-on-the-secs-failure-to-properly-investigate-goldman-sachs/

[Winehole23]

At a minimum, it can be said that the SEC left 90 percent of the money on the table at a time when a more aggressive investigation of the company, as well as others, could have counted for something by disclosing, in a detailed court complaint, Wall Street wrongs that might have helped policy makers better address the subject and allow damaged individuals and entities to bring their own lawsuits.