Wednesday, Jan 30, 2008
Just the start!!!
Guardian: FBI investigates sub-prime crisis
Fourteen companies, including some of the world's largest banks, are being investigated over possible accounting fraud, improperly securing loans and insider trading during the sub-prime mortgage scandal.
Posted by inbreda @ 12:59 PM (599 views) Add Comment
6 Comments
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1. shipbuilder said...
Now this IS interesting. I guess we'll find out just how powerful the banks are. Will there be prosecutions and who will be sacrificed?
2. Stevie Dee said...
Can Prime Ministers & Chancellors be prosecuted too?
3. mark said...
and what good will it do if they find fraud? will banks close? will all its staff end up in nick?
4. jack c said...
FBI = Federal Bank Investigators.
5. drewster said...
Mark: It will do some good. Even if they don't get everyone, they'll hold enough people to account to make others think twice before embarking on similar frauds.
If we look at the Enron case, there was quite a lot of fallout. Arthur Anderson, the big accounting firm, was basically shut down because of Enron. The CEO of Enron got 24 years in prison - although he is appealing the conviction and the judge has already noted "serious frailties" in the original conviction. The other top people at Enron got sentences ranging from 2-5 years, some of which are just house-arrest. These guys tend to live in pretty big houses so it's not exactly Porridge.
Most of the people who profited over the years won't lose out, and nor should they. If a BTL investor wants to gamble on the housing market, he or she must accept the risk. There are few laws against making money out of other people's greed, stupidity, or naivety, except in special cases. This is especially true in America which hasn't even heard of consumer protection laws. (Reagan actually revoked regulations requiring airbags in cars just before they were due to come into force; eventually the supreme court overruled him. It just goes to show how anti-consumer and pro-business the American government is.)
6. alan said...
The biggest stock market fraud in the US was Worldcom. It happened entirely in the US offices across the pond. Apart from the guy who did the deed, almost everyone else got off, including the guys in Wall St who phoned up employees to get them to buy Worldcom stock even when it was diving.
I know, I worked there. Getting a job as an accountant when that fell over just wasn't possible. I think I still have a few bruises, and no yacht floating off Jamaica.
My thoughts: lots of dust thrown in the air. Few, if any, convictions.