Posts filed under “Legal”

Congress Quietly Moves Pecora Commission

Tucked into an anti-fraud bill moving through the House and Senate is a Pecora-style commission with subpoena power.  The negotiations are based on the Senate version of the bill, and the Senate version has the commission in there.  I excerpted the section on the commission, you can see the full bill here:

Comments, thoughts, etc are always welcome, though in this case there’s probably not much I can do from my position.

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Category: Legal, Politics, Think Tank

Bank of America Needs $34 Billion

We got your stress right here: We won’t get the official stress test results until tomorrow, but the dollar amount needed to be raised privately at the House of Lewis is $33.9 billion dollars. Alternatively, BofA could convert Uncle Sam’s non-voting preferred shares. That would give the taxpayer a significant, potentially majority stake in the…Read More

Category: Bailouts, Credit, Investing, Legal

Mortgage Fraud: How the FBI Blew It


Mortgage Fraud Epidemic: How the FBI Blew It and Why There’s No ‘Perp Walks’
Aaron Task
Yahoo Tech TIcker Apr 06, 2009 08:00am

Category: Credit, Legal, Video

Ratings Agencies Abject Failure

“Ratings agencies just abjectly failed in serving the interests of investors.” -SEC Commissioner Kathleen Casey > Nice takedown on the highly conflicted, over rated ratings agencies in Bloomberg yesterday: “Investors, traders and regulators have been questioning whether credit rating companies serve a good purpose ever since Enron Corp. imploded in 2001. Until four days before…Read More

Category: Bailout Nation, Legal, Markets, Regulation

30 Years Later: A Belated Chrysler/GM Bankruptcy

I am in Philadelphia today, speaking at my friend David Kotok’s The Financial System, Banks & Economy: After the Storm…Where Are We Now? conference, and I may just have to throw away my notes and wing it to speak about the Chrysler bankruptcy . . . “President Barack Obama aims to announce [Thrusday] that Chrysler…Read More

Category: Bailouts, Legal, Markets

The Big Picture Conference: Capitalism After the Crash

I mentioned a few weeks ago we were hosting a conference in NYC on  June 3 2009. The conference is coming together nicely, with some terrific name guests committed: • Former CNBC anchor Dylan Ratigan is the master of ceremonies; • Black Swan and Fooled by Randomness author Nassim Taleb is the morning keynote •…Read More

Category: Bailouts, Legal

Weekend Without Bernie

Reporter David Segal looks at the town that might have lost more money per square mile than any other in the country because of the downturn in the economy and the Ponzi scheming of Bernie Madoff.

Category: Legal, Video

The Prisoners Dilemma: John Thain vs Ken Lewis

“Regulators are supposed to tell you to obey the law, not to disobey the law. If you’re the CEO, your first obligation is not to your regulator, it’s to your institution and shareholders.”

-Jonathan R. Macey, deputy dean of Yale Law School


I have not commented on the allegations by Bank of America CEO Ken Lewis that he was forced into making a disastrous acquisition of Merrill Lynch.

Why? Because they appeared to me be utter and shameless nonsense, an attempt to worm out of responsibility.  Indeed, the very statements by Bank of America CEO Ken Lewis appeared to be excuse-making for a lousy acquisition (which Bof A has quite the history of). Its the sort of weasely responsibility evading CEO speak we have come to expect these days. To be blunt, I was astonished anyone took them very seriously.

Yet they were taken seriously, by quite a few people — including a huge front page Wall Street Journal article. The mere accusation means that we are likely to see former Treasury Secretary Hank Paulson — a major cause of the credit crisis and a horrific bailout steward — up for a major grilling in Congress.

This morning, in the same WSJ venue, we learn that many of the statements Ken Lewis made under oath were directly contradicted by former Merrill CEO John Thain (but not under oath). Thain claims these understandings were in in writing.

One of these  two CEOs is lying, and if its the guy who was doing so in sworn testimony, he may have a very big problem on his hands.

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Category: Bailouts, Legal, M&A, Regulation, Taxes and Policy

The Mortgage Netherworld

I meant to mention this NYT article from Thursday, with a wild graphical depiction of MERS — Mortgage Electronic Registration Systems — that holds over 60 million mortgages on American homes: > click for ginormo graphic via NYT The full article is worth reading . . . > Source: Tracking Loans Through a Firm That…Read More

Category: Credit, Legal, Real Estate

Delinquencies Rising at Fannie & Freddie

No surprise here: Even amongst the most credit worthy borrowers — aka “Prime” — defaults are rising rapidly. Job losses, debt problems, loss of income are the primary causes. Prime borrowers at least 60 days behind on mortgages — “Delinquent” is the official term for this period — rose from 497,131 in December to 743,686…Read More

Category: Credit, Legal, Real Estate