source: Occupy Democrats
U.S. Attorney General Eric Holder announced Wednesday that in the coming months, there will be a number of cases brought against financial firms that were responsible for the economic meltdown that led to the Great Recession.
Originally reported by The Wall Street Journal, Mr. Holder stated that a number of investigations are finally coming to a head.
In the interview, which took place on Tuesday, Mr. Holder said, “My message is, anybody who’s inflicted damage on our financial markets should not be of the belief that they are out of the woods because of the passage of time. If any individual or if any institution is banking on waiting things out, they have to think again.”
He continued, “Anybody who’s inflicted damage on our financial markets should not be of the belief that they are out of the woods because of the passage of time.”
He declined to get in to specifics, or give dates as to when to expect the announcements, he did say that he would be the Attorney General when the cases are brought.
Some speculate that Eric Holder may be planning to leave before the end of the Obama Administration. Associates believe that he may step down before the end of the year, which would mean charges could be filed relatively shortly.
Eric Holder also stated that there would be several lawsuits coming down. “I expect to be here to announce a series of significant matters that we’ll be bringing,” he said.
Mr. Holder and the Obama Administration have taken heat from fellow Democrats for not bringing criminal charges against big banks or their executives over their part in the 2008 financial meltdown. Some of their harshest critics have been Senator Elizabeth Warren (D-MA) and Senator Bernie Sanders (I-VT). Both have presided over a number of committee hearings.
The latest announcement comes just weeks after the Department of Justice and the Securities and Exchange Commission filed suit against Bank of America for knowingly and willfully making materially false and misleading statements and by failing to disclose important facts about the mortgages collateralizing the RMBS, including Bank of America’s failure to conduct loan level due diligence in the offering documents.”
Mr. Holder also stated earlier this month that the Financial Fraud Enforcement Task Force, an organization set up in 2009 by President Obama, would continue to take an aggressive approach to fighting financial fraud and uncovering abuse in residential mortgage-backed securities, much like it did with UBS. JPMorgan Chase, Bank of America and other large Wall Street financial firms all have shown the federal government pursuing new prosecutions of possible abuses stemming from the RMBS industry in disclosures this month.
The newest charges, however, are not only related to the pre-meltdown wrong doings. Federal prosecutors have recently filed charges against two ex-JPMorgan traders, accusing them of misstating losses in a series of bad bets that eventually cost the bank more than $6 billion last year.
Mr. Holder also stated that a number of cases are starting to wrap up, and it took so long because they were so complicated and took place over such a long period of time, as well as his urging prosecutors to complete their investigation.
Eric Holder told The Wall Street Journal “No individual, no company is above the law. We don’t investigate companies based on who a CEO is, but we don’t avoid investigating companies based on who the CEO is, either.”
There is also some more strength coming to the Department of Justice. Leslie R. Caldwell, former lead prosecutor in the Enron case, is expected to be announced as the newest head of its criminal division, according to those briefed on the decision.
Video
<iframe width="420" height="315" src="//www.youtube.com/embed/3lYprMO5gy8" frameborder="0" allowfullscreen></iframe>
U.S. Attorney General Eric Holder announced Wednesday that in the coming months, there will be a number of cases brought against financial firms that were responsible for the economic meltdown that led to the Great Recession.
Originally reported by The Wall Street Journal, Mr. Holder stated that a number of investigations are finally coming to a head.
In the interview, which took place on Tuesday, Mr. Holder said, “My message is, anybody who’s inflicted damage on our financial markets should not be of the belief that they are out of the woods because of the passage of time. If any individual or if any institution is banking on waiting things out, they have to think again.”
He continued, “Anybody who’s inflicted damage on our financial markets should not be of the belief that they are out of the woods because of the passage of time.”
He declined to get in to specifics, or give dates as to when to expect the announcements, he did say that he would be the Attorney General when the cases are brought.
Some speculate that Eric Holder may be planning to leave before the end of the Obama Administration. Associates believe that he may step down before the end of the year, which would mean charges could be filed relatively shortly.
Eric Holder also stated that there would be several lawsuits coming down. “I expect to be here to announce a series of significant matters that we’ll be bringing,” he said.
Mr. Holder and the Obama Administration have taken heat from fellow Democrats for not bringing criminal charges against big banks or their executives over their part in the 2008 financial meltdown. Some of their harshest critics have been Senator Elizabeth Warren (D-MA) and Senator Bernie Sanders (I-VT). Both have presided over a number of committee hearings.
The latest announcement comes just weeks after the Department of Justice and the Securities and Exchange Commission filed suit against Bank of America for knowingly and willfully making materially false and misleading statements and by failing to disclose important facts about the mortgages collateralizing the RMBS, including Bank of America’s failure to conduct loan level due diligence in the offering documents.”
“Bank of America’s reckless and fraudulent origination and securitization practices in the lead-up to the financial crisis caused significant losses to investors. Now, Bank of America will have to face the consequences of its actions. We have made a commitment to the American people to hold financial institutions accountable for practices that violated the law and wreaked havoc on the financial system, and my office takes that commitment very seriously. Our investigation into Bank of America’s mortgage and securitization practices continues…Bank of America decided not to conduct any loan-level due diligence on the mortgages used as collateral in the securitization, in part to save about $15,000 in expenses, according to the complaint.”
In late July, the Federal Housing Finance Agency settled with UBS for $885 million for their part in the housing bubble bust.
UBS was sued by FHFA in 2011 over $4.5 billion residential mortgage-backed securities (RMBS) that UBS sponsored, and an additional $1.8 billion of third-party they sold to Fannie Mae and Freddie Mac. The suit alleges at least $1.2 billion plus interest in losses, that bankrupted the two powerhouse mortgage companies and required the government to step in before they went bankrupt. UBS will pay approximately $415 million to Fannie Mae, and $470 million to Freddie Mac. UBS was also fined $1.9 billion in December by US, UK and Switzerland regulators for alternating its submission used to set benchmarks, such as the London interbank offered rate (Libor).
In November, U.S. District Judge Denis Cole denied Citigroup, Bank of America, and two other banks requests for dismissal.
Mr. Holder also stated earlier this month that the Financial Fraud Enforcement Task Force, an organization set up in 2009 by President Obama, would continue to take an aggressive approach to fighting financial fraud and uncovering abuse in residential mortgage-backed securities, much like it did with UBS. JPMorgan Chase, Bank of America and other large Wall Street financial firms all have shown the federal government pursuing new prosecutions of possible abuses stemming from the RMBS industry in disclosures this month.
The newest charges, however, are not only related to the pre-meltdown wrong doings. Federal prosecutors have recently filed charges against two ex-JPMorgan traders, accusing them of misstating losses in a series of bad bets that eventually cost the bank more than $6 billion last year.
“JPMorgan Chase is also facing at least a dozen other charges ranging from mortgage bonds it sold before the financial crisis to a federal bribery investigation into whether it hired the children of key Chinese official to help it win business.”
JPMorgan is also facing charges that it manipulated the energy market, in an Enron-like scandal. JPMorgan has declined to comment on any of the pending cases.
Mr. Holder also stated that a number of cases are starting to wrap up, and it took so long because they were so complicated and took place over such a long period of time, as well as his urging prosecutors to complete their investigation.
“These are complex cases that require enormous amounts of effort to put together, but we are at a point – as you’ve seen, I think, recently – where the results of that difficult work is starting to bear fruit.”
Unfortunately, there may be a hiccup in all of this. Columbia law professor John Coffee studies white-collar crimes and securities fraud agreed that President Obama may have acted too slowly to taking actions against the banks for the financial crisis, but added that Eric Holder is “responding to the temper of the times.” Unfortunately, according to Professor Coffee, a successful prosecution may be difficult because of the five-year statute of limitations on many white-collar crimes.
Eric Holder told The Wall Street Journal “No individual, no company is above the law. We don’t investigate companies based on who a CEO is, but we don’t avoid investigating companies based on who the CEO is, either.”
There is also some more strength coming to the Department of Justice. Leslie R. Caldwell, former lead prosecutor in the Enron case, is expected to be announced as the newest head of its criminal division, according to those briefed on the decision.
“Ms. Caldwell, now a defense lawyer at the firm Morgan Lewis, served as first director of the government’s Enron Task Force, running the criminal investigation of the collapsed energy giant from 2002 to 2004. She took on that role after stints as a federal prosecutor in Manhattan and San Francisco. In returning to government service, Ms. Caldwell will assume a post vacated this year by Lanny Breuer, who led the Justice Department’s response to corporate misconduct during the financial crisis, bringing big corporate bribery and public corruption cases. He came under criticism for a dearth of prosecutions of Wall Street executives.”
The tough new stance of the Obama Administration is a sign of strength that many on the Left have been waiting for. In the words of Senator Warren, the era of “too big to jail” may be coming to an end. All of this in spite of unprecedented obstructionism from the Republican Party, who have treated banking executive with kid gloves. Imagine what he can accomplish if we give him a Democratic congress in November.
Video
<iframe width="420" height="315" src="//www.youtube.com/embed/3lYprMO5gy8" frameborder="0" allowfullscreen></iframe>
