SEC Brings The Hammer Down And Charges Six Ex-Fannie, Freddie CEOs With Fraud (Where's The Love?)
Last edited Sat Dec 17, 2011, 12:48 AM - Edit history (4)
Friday, Dec 16, 2011
WASHINGTON (AP) — The Securities and Exchange Commission has brought civil fraud charges against six former top executives at Fannie Mae and Freddie Mac, saying they misled the government and taxpayers about risky subprime mortgages the mortgage giants held during the housing bust.
Those charged include the agencies’ two former CEOs, Fannie’s Daniel Mudd and Freddie’s Richard Syron. They are the highest-profile individuals to be charged in connection with the 2008 financial crisis.
Mudd and Syron led the mortgage giants when the housing bubble burst in late 2006 and 2007. The four other top executives also worked for the companies during that time.
According to the lawsuit, Fannie told investors in 2007 that it had roughly $4.8 billion worth of subprime loans on its books. The SEC says that Fannie actually had about $43 billion worth of products targeted to borrowers with weak credit.
Freddie said about 11 percent of its single-family loans were subprime in 2007. The SEC says it was closer to about 18 percent . . .
read more: http://www.salon.com/2011/12/16/sec_charges_ex_fannie_freddie_ceos_with_fraud-2/
the prosecutions and indictments are here . . . where are the folks who've been grousing that this administration hasn't moved forward with prosecutions. These are Obama appointees at the head of the SEC aren't they?
The SEC, in particular, came under fire for its failure to detect dire economic conditions at investment banks Bear Sterns and Lehman Brothers. Days before Bear Stearns collapsed, the current SEC chairman, Christopher Cox, told reporters that the agency was comfortable with the bank’s capital holdings.
Obama talked often during the campaign about overhauling the financial markets, devoting an entire economic address in March to reforming the regulatory system. He called for tighter regulation of mortgage lenders, banks and financial houses.
In Schapiro, Obama has chosen a former SEC commissioner who currently heads the Financial Industry Regulatory Authority, the leading nongovernment regulator of all securities agencies. She will take over during a year-long recession and will lead an agency that has come under intense scrutiny for its failure to detect dire economic conditions at major banks, among them Bear Stearns and Lehman Brothers.
“Mary is known as a regulator who’s both smart and tough — so much so that she’s been criticized by the same industry insiders who we need to get tough on,” Obama said. “For years, she’s used her position to educate investors about market risks, warn seniors and employers about retirement scams, and call for increased regulation of mortgage brokers long before this housing crisis hit.”
12/18/08 -- http://www.politico.com/news/stories/1208/16714.html
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