Tag Archive for ‘Bank of America’
Over the last two years of the housing bubble, Wall Street bankers perpetrated one of the greatest episodes of self-dealing in financial history. Faced with increasing difficulty in selling the mortgage-backed securities that had been among their most lucrative products, the banks hit on a solution that preserved their quarterly earnings and huge bonuses: They created fake demand.
When big banks have announced settlements with the Securities and Exchange Commission, ProPublica put those agreed-upon fines into perspective, and often found that even millions of dollars in fines aren’t too hard for these big financial firms to shell out. Judges, increasingly, seem to agree.
The Federal Trade Commission said that when homeowners fell behind on payments and were in default on loans, Countrywide ordered property inspections, lawn mowing, and other services meant to protect the lender’s interest in the property. But rather than hire third-party vendors to perform the services, Countrywide created subsidiaries to hire the vendors, often marking up prices charged by 100 percent or more.
Bank of America agreed to pay $150 million to settle a civil complaint brought by the Securities and Exchange Commisison in connection with its acquisition of Merrill Lynch in the midst of the 2008 financial crisis. Even as the SEC settlement was being announced, New York State Attorney General Andrew Cuomo announced a separate lawsuit against Bank of America
There will no doubt be a fair amount of theater this week as the Financial Crisis Inquiry Commission holds its first public hearings exploring the causes of the 2008 financial crisis that nearly catapulted the U.S. and world economies into a 21st century Great Depression. While many will focus attention on the star bankers testifying, there’s another potential star in this drama that you might want to keep on eye on: the commission’s chairman, Phil Angelides.