Former Regulator: Clear Fraud in Financial Crisis -- Why Isn't Anyone in Jail?

[Crewleader]

Posted Nov 21, 2008 12:47pm EST by Aaron Task in Newsmakers, Banking
Related: BAC, WM, CFC, XLF, JPM

In the aftermath of the corporate scandals earlier this decade, investor confidence was (partially) restored by a parade of "perp walks" of fallen chieftains like Ken Lay, Bernie Ebbers, and Dennis Kozlowski.

But nearly two years into the bursting of booms in housing and mortgage securities, scant few related arrests have been made — and most of those have been focused on individual mortgage brokers vs. major industry leaders.

"There is no poster child because you need to investigate, and you need to bring cases and we haven't done either against the major players," says William Black, Associate Professor of Economics and Law at the University of Missouri — Kansas City and a former federal regulator.

Black, who was counsel to the Federal Home Loan Bank Board during the S&L Crisis and blew the whistle on the "Keating Five" in 1989, says investigations have shown fraud incidence of 50% at (once) major subprime lenders like IndyMac and Countrywide.

http://finance.yahoo.com/tech-ticker/article/133224/Former-Regulator-Clear-Fraud-in-Financial-Crisis----Why-Isn%27t-Anyone-in-Jail?