Bank of America is down by 20% after being sued by AIG for "Massive Fraud" ... Goldman, Morgan Standley and JP Morgan are next
Bank of America Down 20% Committed "Massive Fraud".....How? Mortgage papers were all fuged and not in the proper format. Bnak of America is down 20% after AIG sued the bank for "massive fraud" in connection with mortgage debt, seeking $10 billion dollars. AIG accused Bank of America and its Countrywide and Merrill Lynch units of misrepresenting the quality of mortgage-backed securities, including more than $28 billion it bought, and lying to credit rating agencies about the underlying loans.
According to its complaint, AIG examined 262,322 mortgages that backed 349 offerings it bought between 2005 and 2007. It said the quality of 40.2 percent of the mortgages was significantly inferior to what had been represented. Defendants were engaged in a massive scheme to manipulate and deceive investors, like AIG, who had no alternative but to rely on the lies and omissions made. The bank is down 50% for the month.
This is start of a massive fraud story unwinding going forward for amny banks. Morgan Stanley got $107 billion today.
Credit-default swaps on Bank of America Corp., the nation's biggest bank by assets, soared to the highest since May 2009. Goldman Sachs and JPMorgan Chase Bank to be sued by AIG very soon. Moreover, AIG intends to sue a number of other large banks for fraud as well.
A.I.G. is preparing similar suits against other large financial institutions as well. Its part of the litigation strategy aimed at recovering some of the billions in losses the insurer sustained during the financial crisis.
As I've repeatedly noted, both the Great Depression and the current financial crisis were largely caused by fraud, and the economy cannot stabilize until fraud is prosecuted. The failure of government to prosecute Wall Street fraud is the main reason that the markets are experiencing chaos again.
Bailing out the giant banks which committed massive fraud hurt - rather than helped -the economy. As I said last month in one of the TV channels If We Don't Break Up the Giant Banks NOW, They'll Be Bailed Out Again and Again ... Dragging the World Economy further down with them. This is not the view of some obscure economists. Virtually all of the independent economists and financial experts [not working for the Fed, Treasury, or big banks] agree ... BAD TIMES ARE AHEAD..MASSIVE BANKS BAIL OUT WOULD BE ON THE CARDS OF MANY GOVERNMENTS. LET THEM GO BANKRUPT AND PUNISH THEM FOR BAD BEAVOIR AND RISKY ASSETS POSITIONS.
Disclaimer: This is just a research piece and not an investment advice. All financial transactions carry a RISK.
Fraoud every where some countries make it more planned way others but in pakistan more openly
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