The official said federal authorities are finding new evidence they say indicates intent to commit fraud over the packaging and sale of mortgage bonds backed by subprime home loans in some of the civil lawsuits plaintiffs’ lawyers have filed against large banks.
And they are exploring whether they can build criminal cases against bankers by using a 1984 law intended to punish individuals for scamming commercial banks.
No, really? Evidence of fraud?
Let me guess — that wasn’t in the prospectus.
Is that fraud? Gee, let me think about that for a minute….
The bank fraud statute is more often used to pursue people trying to forge checks, falsify loan documents or make other false statements to banks. Applying the charge to behavior in the securities market would be a novel use of the statute.
Oh wait — we had that too. Robosigning anyone? Claims of transfers that never happened? Uh, yeah. Bank fraud eh?
Gee whiz, this is some sort of revelation?
Naw. It’s a sop to the media — push it out there, get Reuters to run an “exclusive”, then when the Feds do exactly nothing as they have done thus far they can say “oh well we didn’t think we could make a case.”
I’ll believe there will be prosecutions when I actually see them.
Oh, and if you want to know why I’m not writing a 20-page article on this?
That’s because I already have more times than I can count.