Pursue more criminal charges in financial scandals
Since the financial collapse of 2008, the government has pursued fraud charges and civil regulatory actions against several Wall Street banks, recouping hundreds of millions in settlement proceeds. But criminal cases against individuals have been rare, which is why it’s worth noting a recent indictment against three former bond traders.
The trio is accused of artificially inflating the value of complex mortgage-bond packages in a bid to boost pay and year-end bonuses. The case shows that federal prosecutors, despite the length of time needed to develop such cases, are rightly determined to proceed against those who engaged in illegal self-dealing in the housing bubble.
David Higgs and Salmaan Siddiqui, then employed by Credit Suisse, have pleaded guilty to overstating the value of complex mortgage-backed bond securities to meet profitability targets and increase their pay.
They implicated their former boss, London-based Kareem Serageldin, a U.S. citizen charged with conspiracy, falsification of records and wire fraud.
The quest for justice is important at the state level, as well.
Missouri Attorney General Chris Koster last week announced that a Boone County grand jury handed down a 135-count indictment against Docx LLC and its founder Lorraine Brown. The grand jury found that a person forged signatures on multiple notarized housing documents.
While in Kansas City to announce Missouri’s participation in a massive settlements with banks that had engaged in fraudulent “robo signing” practices, Koster emphasized that the settlement doesn’t preclude criminal prosecutions.
And it shouldn’t. Many factors contributed to the financial collapse — bank executives who didn’t fully understand the risks, misguided public policy, the failure of the rating agencies to recognize the low quality of the loans backing the bonds they blithely stamped triple-A. Outright criminality was another factor, and prosecutors at all levels should pursue those cases.
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George Hunsucker
Northland
3 months agoWhen Franklin Raines who ran Fannie Mae is prosecuted criminally get back with me… In the meantime, chasing these small guys is good for headlines, minimally serviing justice IMO….
Kay Fox
Kansas City
3 months agoI agree with George.
Try Goldman Sachs, JP Morgan, etc.
BUT let’s not stop there…how about the Kansas City School District latest contract that was reported by a local TV station???
Why isn’t the Star on that one like a bird on a June bug?
IT’S JUST MIND BOGGLING! Billions of dollars haS been spent by KCSD and they need to fix the buildings? WHERE DID THE MONEY GO???
Chuck Close
3 months agoNotably absent from your list of (ir)responsible culprits in the last paragraph are the politicians themselves.
Grandiosely dismissing culpability under the sanguine term, “misguided public policy” is a thin line on which to stand……though it is the first time I have even seen THAT admission from the Editorial Board.
Maybe there is hope after all.
Phil Cardarella
3 months agoThis is a national disgrace.
We lock up guys over marijuana — and these Masters of the Universe go free?
Seriously, a moderately intelligent prosecutor — given a CPA and a Grand Jury — could have all these Wall Street Bonus Babies in orange junp suits. If he couldn’t he should not go back for a second year of law school.
Telling your clients that X is a great stock while you are dumping X yourself is called wire fraud. Having your employees do it is called conspiracy to commit wire fraud.
Name me special prosecutor. I’d do it for fun.