Tuesday, April 13, 2010

....and the Jail Time?

Ticker notes that the US Senate now knows what any sentient person knew 3-5 years ago.

Officials at the failed banking operations of Washington Mutual Inc. securitized substantial volumes of risky, fraudulent loans in the run-up to the financial meltdown despite repeated internal warning signs, according to a Senate probe.

The subcommittee has obtained documents showing that "at a critical point Washington Mutual included loans in its securities because they were likely to suffer a high rate of default, and they failed to disclose that to the buyers," Sen. Levin said. "They also allowed loans that had been identified as fraudulent to be sold to buyers, again without alerting buyers when the fraud was discovered."

Generally, "Fraud" is an offense which demands indictment, prosecution, and prison time.


1 comment:

Tim Morrissey said...

Fraud? Oh my. Perhaps a few tiny little suggestions (not rules or laws) were bent a tiny bit, but fraud is such a strong word. Besides, WAMU was too big to fail, so the gummint told Jamie Dimon at Chase to take WAMU under his wing and make them better again.

So they could originate more liar's loans, under a different corporate banner.