Holder Admits: "Too Big To Fail, To Big To Jail"

[108]

If you can't charge no one for fraud and deception, then the only answer is to properly regulate it with strict penalties for Individual and collective misconduct

We simply cannot afford the outcome of such dealings again

But we have 1 side of Congress doing everything it can to water down regulation

[Row6]

Originally Posted by orangeblueorangeblue

Again: for whom and what crime?

If you can't answer that, it absolutely *is* an excuse.



Since you're privy to all of the investigatory details, maybe you can tell me where they should look to find more information.



Does not make it a crime.



Find this crime in a lawbook for me. Find the crime that says an industry that pivots on betting is culpable when risky bets go wrong and have a cascading effect on a nation's economy and we'll talk. Until then it's just hot air. It's just emotion.

We've been through "what crime?" - Fraud.

I don't know the extent of the investigations - you have me there, though there is a tacit admission in their statements that they have stopped for going very far.

You're right, the extent of the damage doesn't make something that was an innocent accident a crime. However we know that fraud was part of it, whether provable or not - and how can it not be.

Straw man on your last paragraph. The crime is fraud. That is not the bigger crime but - like many prosecutions - the smaller offense that is the handle for punishment. They got Capone for tax evasion, and often the smaller guys fall over on the bigger guys. That is how it's done in the real world.

[108]

Originally Posted by orangeblueorangeblue

No, everyone knows the inherent risk in buying and selling volatile investments. The degree of volatility or the expectation therein does not make it fraud.

Ok I understand the points you are making, but do you personally believe nothing shady was going on, regardless of whether or not it could be used in a court of law?

[surfn1080]

Originally Posted by Row6

The Macs had minimal influence on the sub-prime crash - it was driven by private mortgage companies who had no federal oversight and then matastisized by Wall Street black jack dealers. Educate yourself.

I work for a mortage brokerage firm. I can tell you those sub prime loans where shoved down our throats. Now the company I work for didn't do many of them because we knew it was a bad product. However when you have a borrower begging you to do one and at the same time scared of discrimination laws, you are almost forced to do it. I personally never did one and anyone at the office currently didn't do one.

Now because people like you who think it was just private mortgage companies who had a part of this, the regulations in place now are almost chocking the life out of us. How would you feel if the government came out with a law that told you how you are to be compensated and how much you can make?? Dodd-Frank is killing the growth of business and I see it first hand everyday. Commercial loans are non existent. In my area there are many small office buildings empty because no businesses can rent them out or no new buisnesses to fill them.

[g8trjax]

Holder has no desire to dig into any of this. Don't want to piss off your biggest campaign donors.

[orangeblueorangeblue]

Originally Posted by 108

Ok I understand the points you are making, but do you personally believe nothing shady was going on, regardless of whether or not it could be used in a court of law?

"Shady"

What does this mean, exactly? What punishment do we apply to "shadiness?"

[wgbgator]

Originally Posted by orangeblueorangeblue

"Shady"

What does this mean, exactly? What punishment do we apply to "shadiness?"

The same punishment that applies to trifling.

[orangeblueorangeblue]

A switch to the bottom and no hoop and stick for a fortnight, young man!

[gatorknights]

Legal definition of fraud=

A false representation of a matter of fact—whether by words or by conduct, by false or misleading allegations, or by concealment of what should have been disclosed—that deceives and is intended to deceive another so that the individual will act upon it to her or his legal injury.

Conspiracy=

In the criminal law, a conspiracy is an agreement between two or more persons to break the law at some time in the future, and, in some cases, with at least one overt act in furtherance of that agreement. There is no limit on the number participating in the conspiracy and, in most countries, no requirement that any steps have been taken to put the plan into effect (compare attempts which require proximity to the full offence). For the purposes of concurrence, the actus reus is a continuing one and parties may join the plot later and incur joint liability and conspiracy can be charged where the co-conspirators have been acquitted or cannot be traced. Finally, repentance by one or more parties does not affect liability but may reduce their sentence.

I have a hard time understanding why the individuals in these too big to mess with criminal enterprises cannot be prosecuted individually.

With regards to Fannie and Freddie, I spent the last year or so doing over 1,000 forensic reviews of foreclosed loan files, and with RARE exception they were swimming in fraud and conspiracy. The Macs knew exactly what they were buying, and exactly what they were selling off.

[orangeblueorangeblue]

Can you explain which actions were examples of fraud and conspiracy, and which individuals would be responsible for them?

[gatorknights]

Originally Posted by orangeblueorangeblue

Can you explain which actions were examples of fraud and conspiracy, and which individuals would be responsible for them?

Geez, where do I start. I could write a book on it. Actions include but are not limited to knowing and willing misrepresentation of risk, pricing, borrowers income, occupation, assets, credit, value of the property being secured as collateral for a loan, non compliance with required disclosures and truth in lending laws, forging of loan documents...need I continue.

The individuals responsible are the individuals that engaged in these activities. They're not hard to find, their names and signatures, assuming the sigs were not forged, are plastered all over the files. Further, their direct supervisors, who are legally responsible for their subordinates conduct by virtue of the conspiracy laws are responsible as well.

Nailing these folks is like fishing in a barrel and taking candy from a baby. However, Vito and Knuckles up there in the senate banking committee apparently do not want they guys with the guns and badges snooping around these files, lest they be swimming with the fishes in the East River.

The fact that discussion is even taking place demonstrates how corrupt our banking and financial system is.

[orangeblueorangeblue]

Originally Posted by gatorknights

Geez, where do I start. I could write a book on it. Actions include but are not limited to knowing and willing misrepresentation of risk, pricing, borrowers income, occupation, assets, credit, value of the property being secured as collateral for a loan, non compliance with required disclosures and truth in lending laws, forging of loan documents...need I continue.

I find misrepresentation of risk to be dubious to say the least ... there is a risk assumption in any investment, particularly bundled investments that include copious subprime accounts. Now, it's only misrepresentation if the details of those accounts are hidden prior to purchase and as far as I know that wasn't the case. And if it was, the purchasers should be tried for incompetency.

Forging of loan documents and truth in lending issues actually have been prosecuted, but most of those crimes happened at the regional or local level.

[G8trGr8t]

Originally Posted by 108

If you can't charge no one for fraud and deception, then the only answer is to properly regulate it with strict penalties for Individual and collective misconduct

We simply cannot afford the outcome of such dealings again

But we have 1 side of Congress doing everything it can to water down regulation

you really believe that it is just one side that is responsible for it? really? are you really that partisan blind to the obvious? it is both sides that are being bought and paid for. the proposed regulations that you speak of are for popular consumption but are meaningless and ineffective to solving the problems.

no regulation can solve the problem, the only thing that can solve the problem is free market where those that make the bad choices fail. and regulations are useless without proer enforecement. there were more than enough regulations and rules to have prevented the bp blowout but lack of adequate enforcement by the people paid by the taxpayers make those regualtions and all others meaningless.

[gatorknights]

Knowing and willing misrep of risk is fraud. The operative words here are knowing and willing. If some sales broker tries to sell a security as AAA when they know damm well it's junk, that is fraud. By definition.

There have been cases prosecuted for loan fraud, however, the number of wins compared to the number of incidents is like a flea on a dog's hind quarters.

[Matthanuf06]

Originally Posted by gatorknights

Knowing and willing misrep of risk is fraud. The operative words here are knowing and willing. If some sales broker tries to sell a security as AAA when they know damm well it's junk, that is fraud. By definition.

There have been cases prosecuted for loan fraud, however, the number of wins compared to the number of incidents is like a flea on a dog's hind quarters.

1. AAA still has default risk. Anyone buying it thinking it will perform 100% of the time is mistaken.

2. And yes, it's fraud if you can prove that they had AAA ratings or sold AAA bonds knowing that their risk was more in line with junk.

In regards to 2, you'll be hard pressed to see any systematic fraud. To the best of our models, the paper was investment grade. It required a major event of multiple standard deviations with extreme correlation spikes, to see massive defaults.

That's like saying the US Govt or the rating agencies committed fraud if NK and China nuke the US while simultaneously dumping our bonds, causing a currency crash and for all intents and purposes a default. After all we recently had a AAA rating. Which then would cause a worldwide recession and many other defaults across the world. Must be fraud, right? Sounds ridiculous right? Well that is an extreme event, what happened was an extreme event.

Sometimes shit happens and outliers occur.

[Gatoragman]

I thought we were led to believe that the finiacial instutions were now having to play by all the rules since we passed Dodd/Frank. Wasn't that bill sold to the public as the answer?

[108]

Originally Posted by orangeblueorangeblue

"Shady"

What does this mean, exactly? What punishment do we apply to "shadiness?"

i said regardless of whether or not it is punishable

do you personally feel that everything was on the up and up?

[108]

Originally Posted by orangeblueorangeblue

I find misrepresentation of risk to be dubious to say the least ... there is a risk assumption in any investment, particularly bundled investments that include copious subprime accounts. Now, it's only misrepresentation if the details of those accounts are hidden prior to purchase and as far as I know that wasn't the case. And if it was, the purchasers should be tried for incompetency.

Forging of loan documents and truth in lending issues actually have been prosecuted, but most of those crimes happened at the regional or local level.

if you're saying that due to the inherent nature of risk involved that no misrepresentation, no matter how willful and deceiving could ever be prosecuted, then the rules need to be changed

it should not be an acceptable practice given the ramifications

do you agree?

[Matthanuf06]

Originally Posted by 108

if you're saying that due to the inherent nature of risk involved that no misrepresentation, no matter how willful and deceiving could ever be prosecuted, then the rules need to be changed

it should not be an acceptable practice given the ramifications

do you agree?

I don't think anyone is saying that.

The point is if say a AAA bond has a 1% chance of default that'll be in usually 95% confidence. In a multiple standard deviation event, with unknown outliers, it can certainly spike much higher than that. That doesn't mean that fraud occurred

[Row6]

There are clear examples of houses selling bonds that they noted in internal emails were junk and in some cases had bought credit default swaps on. This is not hypothetical and is not an example of anyone selling or taking an honest risk.