Subprime crisis draws FBI scrutiny as Fed meets

[SnyderShrugged]

Darn FBI and their conspiracy theories.

By Kevin Drawbaugh

WASHINGTON (Reuters) - The shadow of an FBI investigation spread across the subprime mortgage crisis on Tuesday, while the U.S. Congress moved closer to emergency relief for millions of distressed homeowners.

With the Federal Reserve kicking off a two-day meeting where it might cut interest rates further, the stock market rebounded after whipsawing investors for days on fears that the subprime slump could lead to a recession.

But while the market's bears pulled in their claws for the time being, a new potential danger emerged for bankers and brokers involved in the housing price bubble that burst months ago, triggering the present credit crunch.

The FBI said it is investigating 14 corporations over possible accounting fraud and insider trading violations in a crackdown on subprime lending. The companies were not named.

The agency said they include developers, lenders and financiers that securitized ordinary home loans into exotic investment instruments, as well as banks that held them.

The FBI said it is cooperating with the Securities and Exchange Commission, which has confirmed opening at least three dozen investigations related to the subprime mortgage market.

Goldman Sachs, Morgan Stanley and Bear Stearns -- among Wall Street's largest banks -- each said on Tuesday that government investigators are seeking information from them about their subprime activities.
http://www.reuters.com/article/BROKER/idUSN2964286720080130

[JimmyConway]

This could get good.

[SnyderShrugged]

I'm glad at least some of my tax dollars are finally going to good use.

[jbooma]

dam this is getting interesting :)

this could make Enron look like peanuts, and actually a scapegoat is always good when it comes to markets crashing :D

[GibbsFactor]

:munchout:

I'm actually stunned here. Good for the FBI. Good for America.

[SnyderShrugged]

dam this is getting interesting :)

this could make Enron look like peanuts, and actually a scapegoat is always good when it comes to markets crashing :D


The FBI director that gets dirt on the virtually impenetrable Federal Reserve woul have more notoriety that J edgar (but in a good way LOL!) :)

[twa]

dam this is getting interesting :)

this could make Enron look like peanuts, and actually a scapegoat is always good when it comes to markets crashing :D

Yeah, it's always entertaining uncovering the games being played behind the scenes.

Did you hear about the French trader and the seven billion dollar bit? :laugh:

[SnyderShrugged]

Yeah, it's always entertaining uncovering the games being played behind the scenes.

Did you hear about the French trader and the seven billion dollar bit? :laugh:



That case was strange! I wonder if there is more too it though??

[Ancalagon the Black]

Who thinks that Countrywide is one of those 14 companies, and that several major banks make up some of the rest?

[SnyderShrugged]

Who thinks that Countrywide is one of those 14 companies, and that several major banks make up some of the rest?



I would buy that theory.

[RonJeremy]

Who thinks that Countrywide is one of those 14 companies, and that several major banks make up some of the rest?

As a former employee of Countrywide I would be shocked if they weren't one of the companies investigated.

[Johnny Punani]

Awesome!

I hope the companies/individuals who were involved in these activities get long prison terms and billions in fines. Also, brokers who targeted people (minorities) who they knew did not understand the terms of these loans and would not be able to afford them in a only a couple of years need to go to prison with their bosses.

[GibbsFactor]

Who thinks that Countrywide is one of those 14 companies, and that several major banks make up some of the rest?



ME ME ME ME!!!

And the Fed bailed them out with the help of BOA.

[SnyderShrugged]

As a former employee of Countrywide I would be shocked if they weren't one of the companies investigated.


They certainly appeared to be in the center of it all

[RonJeremy]

They certainly appeared to be in the center of it all

They are/were the largest mortgage lender...just by sheer numbers alone they should be a part of this...and their subprime division was bad news.