The Magazine of Corporate Responsibility

Tag Archive for ‘Subprime Mortgages’

The Year in Wall Street Investigations

It’s been over three years since credit markets started shaking with the early tremors of the subprime crisis, and two years since that spread into a marketwide collapse. Prosecutors, regulators, Congress and journalists have spent the year uncovering the financial shenanigans that brought the market to its knees. It’s been marked by a few blockbuster settlements and more revealing investigations — as well as by some noticeable inaction in the reckoning.

Banks’ Self-Dealing Super-Charged Financial Crisis

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.

Citigroup Fined $1 for Every $500 in Subprime Exposure It Hid

Citigroup has agreed to pay the SEC $75 million to settle charges that the bank hid exposure to more than $40 billion in subprime CDOs. (That works out to roughly a $1 fine for every $500 worth of hidden exposure.)

Bank of America to Pay $108 Million to Settle Countrywide Case

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.

State Street Corp. to Pay $300 Million in Subprime Mortgage Case

State Street Corporation agreed to pay more than $300 million to settle a lawsuit brought by the Securities and Exchange Commission which charged the company with misleading its investors about their exposure to subprime investments while selectively disclosing more complete information to specific investors.