CHARLESTON, W.Va. -- Wall Street was jolted this month when a Goldman Sachs executive not only resigned, but also wrote a blistering newspaper commentary accusing the financial giant of shafting its investors to enrich itself.
How much of the U.S. finance industry is guilty of similar greed? A disturbing example may be seen in scandals tainting Bank of America.
After shabby "derivative" securities concocted from shaky subprime mortgages caused the Great Recession, a flood of fraud accusations hit the coast-to-coast megabank, along with its Countrywide Financial and Merrill Lynch divisions.
Bank of America agreed to pay $8.5 billion to 22 institutional investors that suffered heavy losses in mortgage securities.
AIG insurance giant filed a fraud suit demanding $10 billion.
Fifty state attorneys general demanded redress for improper foreclosures.
Allstate insurance accused the megabank of duping it into buying $700 million worth of worthless mortgage-backed securities.
Bank of America agreed to repay $3 billion to Fannie Mae and Freddie Mac for losses -- and also agreed to refund $624 million to New York public pension systems.
CHARLESTON, W.Va. -- Wall Street was jolted this month when a Goldman Sachs executive not only resigned, but also wrote a blistering newspaper commentary accusing the financial giant of shafting its investors to enrich itself.
How much of the U.S. finance industry is guilty of similar greed? A disturbing example may be seen in scandals tainting Bank of America.
After shabby "derivative" securities concocted from shaky subprime mortgages caused the Great Recession, a flood of fraud accusations hit the coast-to-coast megabank, along with its Countrywide Financial and Merrill Lynch divisions.
Bank of America agreed to pay $8.5 billion to 22 institutional investors that suffered heavy losses in mortgage securities.
AIG insurance giant filed a fraud suit demanding $10 billion.
Fifty state attorneys general demanded redress for improper foreclosures.
Allstate insurance accused the megabank of duping it into buying $700 million worth of worthless mortgage-backed securities.
Bank of America agreed to repay $3 billion to Fannie Mae and Freddie Mac for losses -- and also agreed to refund $624 million to New York public pension systems.
The Federal Housing Finance Agency accused the huge bank of securities violations in $50 billion worth of sales.
Because of this barrage, Bank of America stock fell almost half in value.
The latest Rolling Stone magazine contains a long report saying the superbank "defrauded everyone from investors and insurers to homeowners and the unemployed."
"Did you hear about the plot to rig global interest rates?" the report asks. "The $137 million fine for bilking needy schools and cities? The ingenious plan to suck multiple fees out of the unemployment checks of jobless workers?"
It said Bank of America is guilty of "cheating investors, insurers, depositors, homeowners, shareholders, pensioners and taxpayers. It brought tens of thousands of Americans to foreclosure court using bogus 'robo-signed' evidence -- a type of mass perjury that it helped pioneer. It hawked worthless mortgages to dozens of unions and state pension funds, draining them of hundreds of millions in value."
However, the federal government aided the megabank with a $45 billion bailout -- and Bank of America switched its risky holdings into an FDIC-insured wing, "putting all of us on the hook for as much as $55 trillion in irresponsible gambles," the magazine said. Meanwhile, top bank executives "pay themselves huge salaries with money stolen from old people and taxpayers."
Thursday, disclosures revealed that the bank's CEO got $7.5 million compensation last year.
What a colossal mess. The financial industry is somewhat parasitic. It thrives by manipulating other people's money. Thank heaven, the Obama White House and Democrats in Congress passed tough new laws to police the greedsters.
Get Connected