Seems like Danny Schechter’s call for criminal prosecution of the bankers who ruined so many peoples’ lives with the needless financial crisis is finally getting through. Make sure your voice is heard and let your local politicians know that you want these banksters to do real jail time. Story from the Wall Street Journal:
Federal prosecutors, working with securities regulators, are conducting a preliminary criminal probe into whether several major Wall Street banks misled investors about their roles in mortgage-bond deals, according to a person familiar with the matter.
The banks under early-stage criminal scrutiny—J.P. Morgan Chase & Co., Citigroup Inc., Deutsche Bank AG and UBS AG—have also received civil subpoenas from the Securities and Exchange Commission as part of a sweeping investigation of banks’ selling and trading of mortgage-related deals, the person says. Under similar preliminary criminal scrutiny are Goldman Sachs Group Inc. and Morgan Stanley, as previously reported by The Wall Street Journal.
The Manhattan U.S. Attorney’s office and SEC are working hand-in-hand. At issue is whether the Wall Street firms made proper representations to investors in marketing, selling and trading pools of mortgage bonds called collateralized debt obligations, or CDOs.
Many major Wall Street banks created CDOs at the behest of players that made bets against the deals—and banks themselves sometimes bet against the deals. Bearish bets paid off when the mortgage market crashed.
Representatives of the Manhattan U.S. Attorney’s office, the SEC, Goldman, Citigroup, Deutsche Bank and UBS all declined to comment. Morgan Stanley said it hadn’t been contacted by prosecutors and has done nothing wrong. A J.P. Morgan spokesman said the bank “hasn’t been contacted” by federal prosecutors and isn’t aware of any criminal investigation.
The criminal probe marks an important juncture in the fallout from the financial crisis and highlights the severity of the scrutiny for Wall Street. Prosecutors have brought just one major criminal case stemming from the crisis, against two Bear Stearns Cos. traders, and lost it. Lawmakers are calling on prosecutors to do more.
Prosecutors so far are simply gathering evidence. They haven’t issued criminal subpoenas, nor have they homed in on the outlines of any potential case.
To win a criminal case, they would have to prove beyond a reasonable doubt that a firm or its employees intentionally misled investors. It’s possible the probe could end with no charges being brought against any of the firms. It is unclear whether any individuals are of particular interest to the authorities…
[continues in the Wall Street Journal]