Wednesday, September 24, 2008

The great bailout: Paulson plan is ‘reverse criminal action’


...Treasury's plan for Wall Street,' which is likened to "a reverse criminal action where you give restitution to the criminals and put the victims in jail,"...

The Minnesota Independent

For some consumer-rights advocates, the great Wall Street bailout is starting to look like a heist for the ages (my em). Prentiss Cox, a professor of law at the U of M and former assistant attorney general, calls Treasury Secretary Henry Paulson’s bill “outrageous.” Wall Street was the cause of the problem, he says. “And now they want a bailout completely on their terms? It serves the very wealthy and completely ignores the homeowners victimized by this. It is appalling.”

My Way

The FBI is investigating four major U.S. financial institutions whose collapse helped trigger a $700 billion bailout plan by the Bush administration, The Associated Press has learned.

Two law enforcement officials said Tuesday the FBI is looking at potential fraud by mortgage finance giants Fannie Mae (FNM) and Freddie Mac (FRE), and insurer American International Group Inc. (AIG) Additionally, a senior law enforcement official said Lehman Brothers Holdings Inc. (LEH) also is under investigation.

Over the past year as the housing market cratered, the FBI has opened a wide-ranging probe of companies across the financial services industry, from mortgage lenders to investment banks that bundle home loans into securities sold to investors. Mueller has previously said the FBI's hunt for culprits in the nation's subprime mortgage crisis focused on accounting fraud, insider trading, and failure to disclose the value of mortgage-related securities and other investments.

The investigations revealed Tuesday come as lawmakers began considering whether to approve emergency legislation that would give the government broad power to buy up devalued assets from troubled financial firms.

This may turn out to be the biggest RICO case ever. Let's hope.

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