Skip to main content

WaMu Screwed Wall Street Over and Over Again

In the first day of Senate testimony on the collapse of Washington Mutual, we learn the bank knew about rampant mortgage fraud going on in its various branch offices. The fraud includes the typical shenanigans like lying on income statements of borrowers, fake employment statements, etc.

But the real bombshell occurred after WaMu discovered the fraud in their own investigation and still decided to package the mortgages into mortgage-backed securities and sell them off to Wall Street. Oops. It seems WaMu didn’t care that much about about the fraud (they even awarded certain loan officers with trips to Hawaii) and those packaging the securities never asked whether the fraud-tainted mortgages had been removed from the securities they were packaging.

“You had evidence of fraud and you didn’t check” that the mortgages were not part of the securities, asked Sen. Carl Levin, chairman of the committee looking into the bank’s failure. David Beck, WaMu’s former head of capital markets, said he didn't ask. “Isn’t that your job,” Levin said. Beck said it was someone else's responsibility.

“These are securities that happened on your watch,” Levin said.

Related

Panel to Lloyd: Don't Try to Screw With Us

It’s fair to say that members of the Financial Crisis Inquiry Commission is pissed as hell at what it thinks are efforts by Goldman Sachs to ride out their investigation. The commission’s chairman, Phil Angelides, blasted Goldman on a conference call with the media today, after announcing the panel sent the firm a subpoena for specific documents and emails.

Leo Hindery Believes Wall Street is the Root of All Evil

We knew Leo Hindery, private equity investor, founder of the YES Network and staunch Democrat, was not a big fan of Wall Street. But his latest column on regulatory reform basically blames financiers for, well, just about everything.

Europe Also Screwing The Caymans

Not only is Europe’s debt problems bludgeoning the U.S. markets today, but the continent is also on the verge of dealing a huge blow to the hedge fund industry and its favorite tax havens.

Private Equity Fuming Over Carried Interest Tax Hike

For over three years, the private equity industry’s main lobbying group successfully fought against moves to increase taxes on carried interest. Then, Max Baucus and Sander Levin had to go screw it all up yesterday by slipping carried interest legislation into a big tax and spending bill.

Judge Jed Up SEC's Ass Again

These days, Judge Jed Rakoff’s name creates about as much agita inside the SEC as as Bernie Madoff. If Wall Street’s cops on the beat didn’t have enough to deal with already, now Judge Jed is up their ass about a seemingly meaningless legal settlement in the Galleon insider trading case.