The Lehman Moment: The “Normalization” of Fraud

Until the federal and state governments are willing to tell the American public that they gambled away their pension funds on Wall Street there will be no ptocecutions – because with prosecutions the truth comes out. There are already too many sealed files in these bank related cases. Transparency is a necessity… But then our governments don’t think the American public can handle the truth.

Livinglies's Weblog

Sept. 15 is the eighth anniversary of the Lehman Brothers bankruptcy. Not enough time has passed yet for me to recall those anxious days without getting angry.

 Sen. Elizabeth Warren, D-Massachusetts, has used the occasion of this anniversary to suggest the next administration should “investigate and jail” those Wall Street bankers who committed crimes. Although I doubt there will be any perp walks, I do have some ideas about how to proceed.

Before we look into the senator’s suggestion, it is time for an honest appraisal of one of the lingering mysteries of the financial crisis: Why were there were no prosecutions of major executives?

It’s a fair question. I believe there were 10 areas where fraud and abuse took place. These were the Mortgage Electronic Registration Systems; mortgage pools; securitization; “misplaced” mortgage notes; force-placed insurance; servicing fees; fake documents; false affidavits, perjury and robo-signing; foreclosure mills…

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