FedUpUSA

Gee, you think?

The TARP watchdog has also criticized Treasury Secretary Timothy F. Geithner in reports and in congressional testimony for his handling of the process by which insurance giant American International Group Inc. was saved from insolvency in 2008, when Geithner was head of the Federal Reserve Bank of New York.

The secrecy that enveloped the deal was unwarranted, Barofsky says, adding that his probe of an alleged New York Fed coverup in the AIG case could result in criminal or civil charges.

I have written extensively on this matter over the last 18 months and, in my opinion, such an outcome falls under the category of “it’s about damn time!”

Then there’s this:

Barofsky, a former federal prosecutor who was once the target of a kidnapping plot by Colombian drug traffickers, says he’s also looking into possible insider trading connected to TARP. He says his agency would want to know if bankers bought stock in their companies before it was made public that their institutions would get TARP money, for example.

“There was a time when, if you got that word the stock price would go up, and if you were to trade on that information prior to the public announcement, that would be classic insider trading,” Barofsky says.

That ought to be easy.  Just subpoena yourself some trading records along with the emails and communications of bank executives.  Bingo – I bet you find dozens of instances there.

“There’s a reason there are Tea Partiers out there, and when you look at it, anger at the bailout is one of the first things they talk about,” says Barofsky, referring to the anti- Obama political movement. “This Treasury Department and the previous Treasury Department bear some of the responsibility for not being straightforward with the American people.”

The Tea Partiers (and the American people generally) are angry because of the rampant looting of the American public and taxpayer that has taken place over the last three years.

These institutions should have all been dismantled.  If it was deemed to be “necessary” to keep the firms in existence then break ‘em up, fire the entire executive suite and instead of six firms give us sixty – break each into 10 pieces.  Even better, split off their depository functions and sell them to community and regional banks that did not participate in the Wall Street games!

It appears that Barofsky is looking into the issues raised by my previous Ticker on Goldman and the synthetic CDO issue as well:

“It is securities fraud if you take securities and package them and knowingly pass them off with phony labels,” she says.

Barofsky says investigations related to the underwriting and sale of CDOs are ongoing.

You betcha it is.