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Judge: "How can a securities fraud of this nature and magnitude be the result simply of negligence?"

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Hissyspit Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-27-11 02:11 PM
Original message
Judge: "How can a securities fraud of this nature and magnitude be the result simply of negligence?"
http://www.propublica.org/article/did-citi-get-a-sweet-...

https://twitter.com/#!/Jake_Bernstein/status/1296324993...

@Jake_Bernstein

Judge Rakoff nails it w/this q: How can a securities fraud of this nature and magnitude be the result simpl (cont) deck.ly/~ket22


Did Citi Get a Sweet Deal? Bank Claims SEC Settlement on One CDO Clears It on All Others

by Jesse Eisinger and Jake Bernstein
ProPublica, Oct. 20, 2011, 3:21 p.m.

In the run-up to the global financial collapse, Citigroups bankers worked feverishly to create complex securities. In just one year, 2007, Citi marketed more than $20 billion worth of deals backed by home mortgages to investors around the world, most of which failed spectacularly. Subsequent lawsuits and investigations turned up evidence that the bank knew that some of the products were low quality and, in some instances, had even bet they would fail.

The bank says it has settled all of its potential liability to a key regulator the Securities and Exchange Commission -- with a $285 million payment that covers a single transaction, Class V Funding III. ProPublica first raised questions about the deal in August 2010. In announcing a case, the SEC said it had identified one low-level employee, Brian Stoker, as responsible for the banks misconduct.

It made no mention of the dozens of similar collateralized debt obligations, or CDOs, Citi sold to investors before the crash.

A bank spokesman said the SEC would not be examining any of those deals. This means that the SEC has completed its CDO investigation(s) of Citi, the spokesman asserted in an e mail.

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The Magistrate Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-27-11 02:19 PM
Response to Original message
1. Obviously, Ma'am, It Cannot
To refuse to prosecute these crimes is to become an accomplice in them....
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msongs Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-27-11 02:24 PM
Response to Original message
2. hush money paid to SEC so the judge oughta stick out his hand and be bought off too nt
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redqueen Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-27-11 02:27 PM
Response to Original message
3. The SEC is a joke.
A pathetic ruse that only prosecutes small time crime while letting the big ones go on either completely unchecked or with sorry excuses like this one.
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kentuck Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-27-11 02:48 PM
Response to Original message
4. And it's not just Citigroup...
Very few of the big banks were not involved, if any?
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gratuitous Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-27-11 02:51 PM
Response to Original message
5. When someone makes a "mistake" that fattens their bottom line
Don't be surprised when they make that "mistake" over and over again.
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bigmonkey Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-27-11 03:20 PM
Response to Reply #5
7. Are you secretly Bartcop?
:-)
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gratuitous Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-27-11 03:38 PM
Response to Reply #7
8. Used to go there
We parted ways over torture.
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indepat Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-27-11 03:06 PM
Response to Original message
6. The securities fraud of the nature and magnitude in this single transaction,
Class V Funding III, is but a microcosm of the pervasive and endemic fraud committed in the mortgage-related industry: each other transaction in Citi's $20 billion worth of deals backed by home mortgages deserves similar scrutiny as do all other similar/like transactions of other banks/Wall Streeters, letting the chips unmercifully fall where they may. :patriot:
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