The courageous whistleblower, Alayne Fleischmann , who exposed JPMorgan Chase’s mortgage fraud has finally moved out of the shadows and gone public. She provided details how she witnessed massive criminal securities fraud in the bank’s mortgage operations. Her story is profiled in Matt Taibbi’s new Rolling Stone investigation, "The $9 Billion Witness . .” Fleischmann accused JP Morgan of committing outright fraud by overstating the quality of mortgages it was selling to investors. When the toxic securities turned sour investors lost faith in the banking system which precipitated the housing crisis of 2008 that caused millions of home foreclosures.
Fleischmann voiced her complete frustration in her earlier attempts to motivate the Department of Justice and the Securities and Exchange Commission to take remedial action – both seemed to be paralyzed with inaction – afraid to confront the all-powerful and politically connected bank. She complained that an iron curtain had descended between the compliance and the due diligence departments to ensure that the dirty business of toxic mortgages was well hidden. No emails were allowed between the two departments. In short a massive fraud was being perpetrated – the ‘liar loans’ were like selling like old beat up cars advertised as new.
Eventually, The Justice Department was forced to act and imposed large fines on JP Morgan and other large banks and agreed to wash away all the incriminating details of the guilty corporate executives. None faced jail time and many were rewarded hefty bonuses.
No comments:
Post a Comment