From The Wall Street Journal: "After a year-long investigation, the Justice Department said Thursday that it will not bring charges against Goldman Sachs Group or any of its employees for financial fraud related to the mortgage crisis."
In a statement released today, the Justice Department said “the burden of proof” couldn’t be met to prosecute Goldman criminally based on claims made in an extensive report prepared by a U.S. Senate panel that investigated the financial crisis.
By sheer coincidence, According to Federal Election Commission figures compiled by the Center for Responsive Politics, Goldman Sachs' political action committee and individual contributors who listed the company as their employer donated $994,795 during 2007 and 2008 to Obama's presidential campaign -- the second-highest contribution from a company PAC and company employees.
This should probably come as no surprise in light of what happened with Angelo Mozilo and Countrywide Mortgage. According to the NY Times, in June 2009, the Securities and Exchange Commission filed civil fraud and insider trading charges against Mr. Mozilo and his top lieutenants. In October, Mr. Mozilo, whose "Friends of Angelo" program benefited some of the most powerful politicians in Washington and became a national scandal, agreed to repay $45 million in ill-gotten profits and $22.5 million in civil penalties as part of a settlement with the SEC.
This fine represented a small fraction of Mozilo's estimated net worth of $600 million. Countrywide will pay $20 million of the $67.5 million penalty because of an indemnification agreement that was part of Mozilo's employment contract. The terms of the settlement allowed Mr. Mozilo to avoid acknowledging any wrongdoing.
In February 2011, the U.S. dropped its criminal investigation into the facts behind that civil settlement.
According to The Wall Street Journal, $7 trillion in housing value was wiped out in the crisis. That is more than half of the entire gross domestic product for the United States in 2006. It is an average loss of equity somewhere between $70,000-$90,000 per American household.
To at least some degree, the entire mortgage industry has been blamed by politicians and elements of the media for the housing bust and the mortgage meltdown. If you are an originator, you have probably personally experienced this scapegoating at one time or another in the last five years. While the industry as a whole was not entirely blameless in the matter, the real villains of this crisis included politicians from both parties, executives at Fannie, Freddie, and FHA, the leadership at a relatively few mortgage companies like Countrywide, and investment banking firms like Goldman Sachs. It would behoove everyone working in the mortgage industry to educate themselves about what really happened. I would especially recommend the following two books: Reckless Endangerment, and The Housing Boom and Bust. You can click on the images below for more information, or to order these books from Amazon.com.
In a statement released today, the Justice Department said “the burden of proof” couldn’t be met to prosecute Goldman criminally based on claims made in an extensive report prepared by a U.S. Senate panel that investigated the financial crisis.
By sheer coincidence, According to Federal Election Commission figures compiled by the Center for Responsive Politics, Goldman Sachs' political action committee and individual contributors who listed the company as their employer donated $994,795 during 2007 and 2008 to Obama's presidential campaign -- the second-highest contribution from a company PAC and company employees.
This should probably come as no surprise in light of what happened with Angelo Mozilo and Countrywide Mortgage. According to the NY Times, in June 2009, the Securities and Exchange Commission filed civil fraud and insider trading charges against Mr. Mozilo and his top lieutenants. In October, Mr. Mozilo, whose "Friends of Angelo" program benefited some of the most powerful politicians in Washington and became a national scandal, agreed to repay $45 million in ill-gotten profits and $22.5 million in civil penalties as part of a settlement with the SEC.
This fine represented a small fraction of Mozilo's estimated net worth of $600 million. Countrywide will pay $20 million of the $67.5 million penalty because of an indemnification agreement that was part of Mozilo's employment contract. The terms of the settlement allowed Mr. Mozilo to avoid acknowledging any wrongdoing.
In February 2011, the U.S. dropped its criminal investigation into the facts behind that civil settlement.
According to The Wall Street Journal, $7 trillion in housing value was wiped out in the crisis. That is more than half of the entire gross domestic product for the United States in 2006. It is an average loss of equity somewhere between $70,000-$90,000 per American household.
To at least some degree, the entire mortgage industry has been blamed by politicians and elements of the media for the housing bust and the mortgage meltdown. If you are an originator, you have probably personally experienced this scapegoating at one time or another in the last five years. While the industry as a whole was not entirely blameless in the matter, the real villains of this crisis included politicians from both parties, executives at Fannie, Freddie, and FHA, the leadership at a relatively few mortgage companies like Countrywide, and investment banking firms like Goldman Sachs. It would behoove everyone working in the mortgage industry to educate themselves about what really happened. I would especially recommend the following two books: Reckless Endangerment, and The Housing Boom and Bust. You can click on the images below for more information, or to order these books from Amazon.com.
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