FHFA Shows TurboTax Timmeh Geithner What a REAL Long Weekend Is

Because after the bomb they just dropped on the finance world, I would imagine Geithner will be busy.

Here’s the listof banks they’re suing:

  1. Ally Financial Inc. f/k/a GMAC, LLC
  2. Bank of America Corporation
  3. Barclays Bank PLC
  4. Citigroup, Inc.
  5. Countrywide Financial Corporation
  6. Credit Suisse Holdings (USA), Inc.
  7. Deutsche Bank AG
  8. First Horizon National Corporation
  9. General Electric Company
  10. Goldman Sachs & Co.
  11. HSBC North America Holdings, Inc.
  12. JPMorgan Chase & Co.
  13. Merrill Lynch & Co. / First Franklin Financial Corp.
  14. Morgan Stanley
  15. Nomura Holding America Inc.
  16. The Royal Bank of Scotland Group PLC
  17. Société Générale

FHFA explains,

These complaints were filed in federal or state court in New York or the federal court in Connecticut. The complaints seek damages and civil penalties under the Securities Act of 1933, similar in content to the complaint FHFA filed against UBS Americas, Inc. on July 27, 2011. In addition, each complaint seeks compensatory damages for negligent misrepresentation. Certain complaints also allege state securities law violations or common law fraud.

Finally, someone calls it fraud.

Update: Just scanned the BoA suit. Their suit is based on $6B of certificates, between Fannie and Freddie. The defaults and foreclosures range from 7.6 to 61.6%, perhaps averaging 30%.

To emphasize what a stinker BoA was, the complaint notes that even Countrywide thought BoA was going after high-risk loans very aggressively (note FHFA sued Countrywide in separate capacity).

BOA was one of the most aggressive competitors in the mortgage origination market. Even the top executives of Countrywide Financial Corp., the notorious mortgage lender singled out by the FCIC for having originated high-risk loans destined to bring “financial and reputational catastrophe,” FCIC Report at xxii, complained to each other at the time that BOA’s appetite for risky products was greater than that of Countywide. In a June 13, 2005 e-mail Countrywide CEO Angelo Mozilo wrote to President and COO David Sambol: “This is the third deal in the last 10 days that BoA has offered that is impossible to beat. In fact the other two were substantially worse than this one. It appears to me that BofA is making an aggressive move into mortgages once again.” [Emphasis in the complaint]

Yet in spite of the fact that they lay this out in detail, they specifically do not make any claim of fraud.

Plaintiff realleges each allegation above as if fully set forth herein, except to the extent that Plaintiff expressly excludes any allegation that could be construed as alleging fraud.

I find that rather curious–are they going easy on BoA because they’re already broke?

Though that can’t be it–they allege fraud throughout the Countrywide complaint.

Update: Here’s an interesting detail. The naming convention used for most of these complaints is FHFA v. [BankName]. But it’s different for five of them. Société Générale is a big long number (including, but not limited to, today’s date). Morgan Stanley and GE (two of the last ones uploaded) have some version of “Final Complaint.” And Countrywide and Ally have that plus a “Filing Copy” in the name.

I’m guessing that suggests additional iterations for those banks.

98 replies
  1. John B. says:

    How mant hours do you suppose it will take Barack Hoover Obama to order DOJ to interven in behalf of the banks to get the suits dismissed? All in the interests of bipartisan comit of course.

  2. Bob Schacht says:

    “Finally, someone calls it fraud.”
    Oh, wait– was there an “or” in that sentence? Such that the result might be that only “state securities law violations” are found, which means that no actual *persons* will be indicted for fraud?

    The list of targets is impressive. The scurrying you hear is the rats on Wall Street canceling their vacation plans and feverishly running around, preparing for the worst, while practicing their best finger-pointing stances.

    Bob in AZ

  3. sojourner says:

    @MadDog: Dunno…I was awake in the middle of the night last night and was reading about it. Don’t ask me what website ;-) Just remember reading it. I am NOT responsible for what I read at 3 a.m….

  4. prostratedragon says:

    @MadDog: Those of us who have been by turns amused and amazed at WF’s huffy pretensions to righteousness over the last year or so can only hope that they’ve been singled out for a feature solo part. Even with today’s company, they might well deserve one.

  5. emptywheel says:

    I think the absence of WF on this IS stunning. If nothing else, they bought Wachovia’s shitpile, and Wachovia’s not here either.

  6. sojourner says:

    @MadDog: /For some reason I am wanting to say it was on HuffPo, with the preliminary story about 3 a.m. But, I am darned if I can find it now… Put it down to fuzzy thinking. Perhaps it will come back up later.

  7. prostratedragon says:

    @prostratedragon: Yves has been following the incense-scented trail, roughly back from here.

    If the FHFA people were as vicious as I am, they’d probably come back in the middle of next week or so with a big, fat, “Oh, and by the way …,” but I’m sure they’re much too professional for shenanigans like that.

  8. John B. says:

    Re: Absence of a fraud allegation against BofA. I suspect this is because Countrywide’s fraud cannot legally be imputed to BofA. After all, the deal was done too rapidly to allow for the usual due diligence. Anyway, didn’t the government encourage BofA to purchase Countrywide? Wasn’t all of this really intended to make sure Goldman Sachs got another payday?

  9. Peterr says:

    @MadDog: My WAG is that the FHFA’s legal folks are none to pleased with WF, and want them to stew over the long Labor Day weekend, reading through the filings against the other banks. It might make WF’s legal people a bit more amenable to cooperating with FHFA.

    Call it the Sword of Damocles approach.

  10. MadDog says:

    @MadDog: From Yves Smith over at Naked Capitalism:

    “…The second sighting comes from American Banker’s Kate Berry, and provides additional confirmation of other reports that banks continue to engage in backdating of documents after having piously sworn to stop that sort of thing:

    Several dozen documents reviewed by American Banker show that as recently as August some of the largest U.S. banks, including Bank of America Corp., Wells Fargo & Co., Ally Financial Inc., and OneWest Financial Inc., were essentially backdating paperwork necessary to support their right to foreclose.

    Some of documents reviewed by American Banker included signatures by current bank employees claiming to represent lenders that no longer exist.

    Many banks are missing the original papers from when they securitized the mortgages, in some cases as long ago as 2005 and 2006, according to plaintiffs’ lawyers. They and some industry members say the related mortgage assignments, showing transfers from one lender to another, should have been completed and filed with document custodians at the time of transfer.

    “It’s one thing to not have the documents you’re supposed to have even though you told investors and the SEC you had them,” says Lynn E. Szymoniak, a plaintiff’s lawyer in West Palm Beach, Fla. “But they’re making up new documents.”

    The banks argue that creating such documents is a routine business practice that simply “memorializes” actions that should have occurred years before. Some courts have endorsed that view, but others, such as the Massachusetts Supreme Judicial Court, have found that this amounts to a lack of sufficient evidence and renders foreclosures invalid.

    (My Bold)

  11. prostratedragon says:

    @John B.: Just looking over the headings of the various filings* it seems possible that FHFA are not confident right now that they can prove the BofA knew of the material falsity of the representations they made as to the loans. In the Countrywide and Merrill Lynch filings, there are sections of the form, “[Defendant] Knew Its Reps Were False and GSEs Justifiably Relied on This Rep.” There is no such in the BofA filing.

    Back in the dark ages of 3, 4, and 5 years ago on the business blogs like Calculated Risk, this was known to be a potential roadblock to really satisfying suits on behalf of bond investors, along with arguments as to which of the parties —they, or the makers of the reps— bore the weight of due dilligence ex post.

    * Unfortunately, I can’t concentrate that well or make such useful notes when reading online, which in this case leaves me faced with a dilemma …

  12. MadDog says:

    I also wonder if S&P will find itself hoisted on the very same petard given that in reading samples of the FHFA’s filings (like this one for Ally Financial Inc. f/k/a GMAC, LLC – 100 page PDF), a part of the FHFA’s complaint revolves around the AAA ratings for the Securitizations:

    “…8. The Registration Statements also set forth ratings for each of the Securitizations. Those AAA ratings were material to a reasonable investor’s decision to purchase the Certificates, and they were material to Freddie Mac. The ratings for the Securitizations were materially inaccurate and were based upon false information supplied by Defendants. Upon information and belief, neither the Defendants nor the rating agencies who issued the ratings believed or had any sound basis to believe in their truthfulness“…

  13. MadDog says:

    @prostratedragon: Given that one of the top areas in the country for the mortgage mess (as a percentage of mortgages) is in Las Vegas, and that Wells Fargo is one of the major players there, I’m wondering if the resident touts have a line on when Wells Fargo will also get it in the neck?

    I’m guessing the odds have to be pretty heavily stacked against Wells Fargo.

  14. earlofhuntingdon says:

    Could be a lot of reasons their complaints are so tentative about alleging fraud. One is that allegations of fraud require greater specificity than other complaints. Had those state and federal prosecutors only done a few investigations, the facts would have been documented that would have made alleging fraud simple. Pity.

  15. earlofhuntingdon says:

    @John B.: Well, if BofA acquired Countrywide in a stock deal, it inherited everythhing, liabilities and all, lock, stock and barrel, regardless of any contractual claims for reimbursement. That BofA failed to do proper due diligence is its own problem, one its shareholders ought to be pursuing vigorously, since the value of their investment is at stake and, in all probability, now worth zip.

    Fraud claims would go much farther, however, if specific individuals could be named instead of institutions, whose “intent” is harder to establish.

  16. MadDog says:

    Just for grins, I sent off an email to both of the FHFA Media Inquiries contacts to see if they’d respond.

    I received back an automated “out of office” email response from Stephanie Johnson – [email protected], (she’s back on Tuesday next week) and the suggestion to contact her backup Corrine Russell – [email protected].

    So I sent the same email to Corrine Russell as shown below:

    “Would you please comment on why Wells Fargo (and Wachovia) were not included in the FHFA Filings in PLS Cases, September 2, 2011.”

    I’m not expecting anything but a non-answer answer, but one never knows, does one?

  17. MadDog says:


    “I’m not expecting anything but a non-answer answer, but one never knows, does one?”

    And got what I expected:

    “We have no comment beyond our news release and filings—on our website.”

  18. joberly says:

    [email protected] Update and JohnB # 16: Thank you for the link to the filings. I looked at the BofA data, too. There were 23 CDOs where BofA was the sponsor, totaling $4.3B of the $6B the FHFA is seeking to recover. These were not loans that BofA inherited after the Countrywide acquisition, but rather securities that BofA put together itself.
    And the “one shittiest deal” in the whole pile? A $333M CDO with transaction name “ABFC 2006-OPT1” issued on August 10, 2006, with AAA ratings from all three agencies. That’s the one where, as EW reported, 61% of the loans were delinquent, or defaulted, or foreclosed. There were quite a few liar loans in that mortgage backed security. Bank of America told Fannie & Freddie that a little more than half of the borrowers had a loan-to-value ratio of less than 80%, when FHFA’s investigation shows that only about 36% were in that safe zone. And there were more lies: BofA said none of the mortgages were on properties where the loan-to-value rate 100%, but FHFA says in the filing that about one-fifth of the loans in that package were underwater from the start.

  19. emptywheel says:

    Added this to the post, but curious what people (especially you lawyer types) think of it:

    Here’s an interesting detail. The naming convention used for most of these complaints is FHFA v. [BankName]. But it’s different for five of them. Société Générale is a big long number (including, but not limited to, today’s date). Morgan Stanley and GE (two of the last ones uploaded) have some version of “Final Complaint.” And Countrywide and Ally have that plus a “Filing Copy” in the name.

    I’m guessing that suggests additional iterations for those banks.

  20. MadDog says:

    @emptywheel: Interesting observations!

    I would note that BofA is called “BofA Other.pdf” where the word “Other” suggests just that. That there are other BofA filings/cases in the FHFA’s hot little hands.

    I would also note that GE’s is called “”GE Complaint Final.pdf” which suggests either multiple iterations and/or that there might be more filings/cases.

    It may just be that different folks or groups of folks within FHFA were responsible for different MOTUs and chose different naming conventions…or there is something boding more ill for the named MOTU.

  21. John B. says:


    Actually, I think BofA is being sued by bond and stock holders, although strictly speaking the grounds may not be fraud but failure to conduct the due diligence and failure to disclose that failure. I am working from memory, here, of short largely uninformative news item I have skimmed. The financial press, to be frank, sucks.

  22. John B. says:


    I haven’t seen the latest complaint but I do know that a good many “banks” foreclosing on mortgagors do so, technically, in the name of a “trust” or similar entity to which a pile of the bundled mortgage derivatives was sold. Typically, those entities bear a number for a name.

  23. MadDog says:

    Though this probably has no meaning in the FHFA publishing scheme of things, I was curious to see if there were missing web directories in the list of the FHFA 17 filings (i.e. a missing Wells Fargo filing, but alas no luck).

    After putzing around for a while, I found that there were no missing directories nearby these 17 filings.

    By web directories, I mean the following:

    http://www.fhfa.gov/webfiles/XXXXX/ where XXXXX was as follows:

    22585 – Société Générale
    22586 – Bank of America Corporation
    22587 – Credit Suisse Holdings (USA), Inc.
    22588 – First Horizon National Corporation
    22589 – Goldman Sachs & Co.
    22590 – HSBC North America Holdings, Inc.
    22591 – Nomura Holding America Inc.
    22592 – Barclays Bank PLC
    22593 – Citigroup, Inc.
    22594 – Deutsche Bank AG
    22595 – Merrill Lynch & Co. / First Franklin Financial Corp.
    22596 – wide Financial Corporation
    22597 – JPMorgan Chase & Co.
    22598 – The Royal Bank of Scotland Group PLC
    22599 – FHFA News Release
    22600 – Morgan Stanley
    22601 – Ally Financial Inc. f/k/a GMAC, LLC
    22602 – General Electric Company

    I do note that the webfile directory of 22599 – FHFA News Release came before the webfile directories on the filings for Morgan Stanley, Ally Financial Inc. f/k/a GMAC, LLC, and General Electric Company.

    Based on earlier FHFA webfile directories, it would seem that each increment in number denotes a later publishing date and/or time.

    I’m not suggesting that the webfile directory of 22599 – FHFA News Release meant that the filings for Morgan Stanley, Ally Financial Inc. f/k/a GMAC, LLC, and General Electric Company came after the news release, and it is probable that all were published at once.

    Another piece of useless information you had no desire to know and liable to clog up your brain cells that could have been put to better use. *g*

  24. Peterr says:

    @MadDog: To me, it sounds like there was a certain amount of back-and-forth between FHFA and the various banks. Thus, with some it was a pretty clear “FHFA vs . . .” but with those where the FHFA was engaged in some kind of negotiations, other suffixes were involved.

    Either that, or it’s in-house FHFA negotiations, but I’d like to think that the FHFA was negotiating with the banks rather than with themselves. Given that they’ve decided to go after 17 big banks, I think it’s not just me being optimistic.

  25. emptywheel says:

    @MadDog: No, actually they were posted after the release. When I first posted this post, those three were not yet up on the website but the press release was already out.

    Btw, can you find where UBS is? They were sued back in July, IIRC.

  26. MadDog says:

    @emptywheel: Wow! So somebody was late in getting their filings to the web publisher at the very least.

    “Btw, can you find where UBS is? They were sued back in July, IIRC.”

    Oh my! Let me see what I can find. The webfile directory of 22000 takes me back to August 1, 2011, so let me work back from there.

  27. MadDog says:

    The miscreants are all claiming innocence via Bloomberg:

    “…”The claims brought by the FHFA are unfounded,” said Frank Kelly, a spokesman for Frankfurt-based Deutsche Bank. “Fannie Mae and Freddie Mac are the epitome of a sophisticated investor.”

    Ally, based in Detroit, said in a statement that it believes FHFA’s claims are meritless and the company intends to defend its position.

    Fannie Mae and Freddie Mac “acknowledged that their losses in the mortgaged-backed securities market were due to the unprecedented downturn in housing prices and other economic factors,” said Larry DiRita, a spokesman for Charlotte, North Carolina-based Bank of America.

    Kim Cherry of Memphis, Tennessee-based First Horizon said the company would defend itself…”

    Another probably useless factoid is that 16 of the suits against the MOTUs were filed in Manhattan, but that according to the Bloomberg piece the FHFA:

    “…sued Royal Bank of Scotland Group Plc (RBS) in federal court in Connecticut…”

    Also from that Bloomberg piece, a breakdown of each MOTU’s suit pricetag:

    “…The FHFA said in its filings that Fannie Mae and Freddie Mac bought $6 billion in mortgage-backed securities from Bank of America; $24.8 billion from Merrill Lynch, which Bank of America took over in 2008, and $26.6 billion from Countrywide, which Bank of America acquired the same year.

    The FHFA claims Fannie Mae and Freddie Mac bought $33 billion in securities from JPMorgan and $30.4 billion from Royal Bank of Scotland. According to the complaints, Fannie Mae and Freddie Mac also bought $14.2 billion from Deutsche Bank, $14.1 billion from Credit Suisse, $11.1 billion from Goldman Sachs, $10.6 billion from Morgan Stanley, $6.2 billion from HSBC, $6 billion from Ally, $4.9 billion from Barclays, $3.5 billion from Citigroup, $2 billion from Nomura, $1.3 billion from Societe Generale (GLE), $883 million from First Horizon and $549 million from GE…”

    Note the grand total from BofA when Merrill Flinch and Countrysnide are included is $57.4 billion.

  28. MadDog says:


    “Note the grand total from BofA when Merrill Flinch and Countrysnide are included is $57.4 billion.”

    Correction – This is the amount of securities bought from BofA, and not how much the FHFA is asking for. My bad! *g*

  29. Peterr says:

    @MadDog: Oooh! Bankster trash talk!

    Poor Barclays. They’re about to be relegated out of the MOTU division.

    (Which is pretty sad, considering Barclays is the name sponsor of the Premier League.)

  30. MadDog says:

    In reading through the Goldman Sachs & Co. lawsuit (136 page PDF), there is a noteworthy chart on page 70 regarding the agency ratings of GS’s securitizations.

    In each instance at the issuance of GS’s mortgage securitizations, the S&P rating agency marked them all at AAA; the highest and most positive rating possible (see Column 3).

    If you look then at Column 4 for the ratings of the GS’s mortgage securitizations as of July 31, 2011, almost all of them are rated at CCC and according to the Free Dictionary’s a href=”http://financial-dictionary.thefreedictionary.com/CCC+Rating”>definition of CCC, these instruments that the FHFA now holds are:

    “…A CCC rating represents an extremely high risk bond or investment; banks are not allowed to invest in CCC rated bonds. CCC bonds are junk bonds…”

    “Banks are not allowed to invest in CCC rated bonds”. Think of that for a moment.

    Pawning them off on the public (Fannie Mae and Freddie Mac) as top-rated AAA securities probably paid for more than a few S&P executive bonuses.

  31. Peterr says:

    @MadDog: He could always put up a trash talk thread if he’s less than amused with teh banksters.

    There’s F1 and then there’s $1, right?

  32. joberly says:

    @MadDog: Good work with the Goldman Sachs filing. Quite a few of the Bank of America securities are today (July 31, 2011) similarly rated in the CCC range.

    Did you notice that one of the GS defendants is Daniel Sparks. He was one of the execs grilled by Sen. Levin on the Timberwolf “one shitty deal,” as reported at the time by FDL: http://news.firedoglake.com/2010/04/27/that-timberwolf-was-one-shitty-deal/

    The top GS exec, Mr. Blankfein, is not listed among the defendants in the FHFA suit. But wasn’t it only last week that he hired private counsel to defend himself…and the stock dropped 5%?

  33. MadDog says:

    @joberly: I wonder how badly the stocks of these 17 will tank come Tuesday?

    And will it drive the rest of the market to its knees?

    I’m guessing the Shorts will cleanup.

  34. sojourner says:

    @MadDog: I am sticking my head out again… Has anyone on here ever read the book “Funny Money” by Mark Singer? This is history repeating itself. I was in the oil business when “Funny Money” took place, and knew some of the players. The way Mad Dog’s comment is stated sounds almost exactly the way “Funny Money” read… No paper work!!

  35. JohnT says:

    What’s going on here? Still no Trash Talk?


    Oklahoma Soon to leave Big 12 er, 10, um Howevermany Conference?

    TCU in a shootout with Baylor. Baylor?!?

    TCU – 48
    Baylor – 47

    4 left mins in the 4th

  36. orionATL says:

    @John B.:

    what may well happen is a “cleansing”,

    similar to the telephone company (telecomm) cleansing of a few years ago,

    in which obama, boehner, mcconell, schumer, and liberman create a legislative work of art that immunizes/sanitizes all bank behavior re: mortgage securitization.

    the only political problem is how to do this w/out obama being blamed for protecting the banks.

    but these boys can make that story up –
    no problem.

    don’t have an ans

  37. bmaz says:

    Okay, where is IndyMac/OneWest Bank? do they get excepted from the fun and games because they were taken over when IndyMac by the FDIC and then repackaged as OneWest (a concern partially owned by George Soros I might add)? Why does enforcement action NEVER go after these guys?

  38. Bob Schacht says:

    ““Fannie Mae and Freddie Mac are the epitome of a sophisticated investor.” ”

    LOL. They said this with a straight face???

    That’s the first time in a long time that I’d heard of anyone defending Fannie & Freddie.

    Bob in AZ

  39. prostratedragon says:

    @bmaz: One place IndyMac is, like some others, is on the list of Certificates bought by Freddie in Table 1 of the Merrill Lynch finding. I think that means that their having their own special day is not ruled out.

    So many shows have died in the provinces of late, but this one could be pretty entertaining before it’s brought to a close.

  40. emptywheel says:

    @Peterr: I confess I may have distracted him from that task by asking him legal questions about fraud.

    But I fully expect trash to be up before University of Michigan meets that football powerhouse, Western MI, at 3:30 in their annual “Omigod I hope this isn’t another Appalachian State game.”

  41. emptywheel says:

    @joberly: Yup. But DOJ is probably working backwards off a false statements charge, whereas FHFA is working upwards off actual filings. They might one day meet in between, but not without subpoenas.

  42. prostratedragon says:

    @emptywheel: They have football today??!! Omigod, I’m in Ann Arbor!! This could change a plan or two…

    Get your local news from emptywheel blog, folks!

  43. Jim Hicks says:

    In the complaint against GE (and may be the case in all the complaints – I didn’t read them all) there is this item – “8. The Registration Statement also set forth ratings for each of the Securitizations. Those AAA ratings were material to a reasonable investor’s decision to purchase the Securities, and they were material to Freddie Mac. The ratings for the Securitizations were materially inaccurate and were based upon false information supplied by the Defendants. Upon information and belief, neither the Defendants nor the rating agencies who issued the ratings believed or had any sound basis to believe in their truthfulness.”
    I wonder if the rating agencies are being sued. And if not, why not

  44. emptywheel says:

    @MadDog: I think that’s why the banks (it was almost certainly the banks, given the bank friendly spin on the article) broke it to NYT on Thursday. Cushion the blow, give their PR departments 3 more days to try to downplay this.

    Though that STILL may not help BoA.

  45. emptywheel says:

    @prostratedragon: 3:30, WMU. So stay away, especially, from exists off of eastbound 94. Not a good day to go to Zingerman’s Roadhouse, and not a good day to sleep late and expect the Farmer’s Market and/or Zingermans to be anything less than a zoo.

  46. emptywheel says:

    @Jim Hicks: Yeah, they pretty much all do that.

    One of the reasons they’re relying on the Clayton testimony (in which they said stuff was shitpile only to have the banks include it anyway) is to separate those issues. And I’m not sure FHFA has standing to sue the ratings agencies (bc they worked for the banks).

  47. joberly says:

    @MadDog: # 64 and EW # 79– Goldman Sachs common stock had recovered mid-week from the Blankfein/lawyering-up dip, but then fell ten points over Thursday & Friday. It’s down this quarter from $136 a share to $107. The loss in market capitalization this summer is $14B. As for Ann Arbor traffic…I had a colleague who rented out her garage and driveway two blocks from the Big House to the same groups of fans, year-after-year. She made $500/game, a nice supplement to the faculty pay at UM.

  48. rosalind says:

    ot: today’s installment of life under our Corporate Overlords: 2 Apple P-I’s enlisted the help of SFPD officers to search a private home for the supposedly missing Iphone prototype. The resident assumed the two men searching his house were police and not in fact Apple security. As to why there was no official police report done, SFPD offers up: “The Apple employees did not want to make an official report of the lost item”

    oh, and the resident was asked if he and his family were legal residents.


  49. emptywheel says:

    @rosalind: Yeah, I’ve been watching that. I’ve held off on the off-chance this is just an Apple PR stunt (at first the cops were unforthcoming about their role in it). But I guess it’s real, then?

  50. rosalind says:

    @emptywheel: oh it’s real. the Police said they didn’t have involvement initially because the Ingleside station kept the matter “off the books”. imagine there are some very interesting conversations going on between SFPD H.Q. and the Mayor’s office about now.

    i’ll leave it to the legal folks to opine as to what – if any – legal liability the Police or Apple have opened themselves up to.

  51. dustbunny44 says:

    Agreed with #71 – the Obama we’ve all come to know (not the one we voted for) will find a way to toss this suit out if it actually gets anywhere.

  52. A Guy Who Sues Insurers says:

    The failure to allege fraud is almost certainly a strategy to preserve any applicable directors & officers and/or errors & omissions insurance coverage purchased by the banks, which always excludes fraudulent conduct. Note the irony that AIG, which probably issued the largest share of such policies, is still primarily owned by the U.S. Department of Treasury, which means that any decline in AIG stock as a result of the additional exposure will be borne by U.S. taxpayers.

  53. orionATL says:


    wrong again.

    here’s the story from my very able assistant, miss wiki:


    The endgame in Bank of America’s $4 billion takeover of Countrywide Financial began with a December phone call from Countrywide Chief Executive Angelo Mozilo to his Bank of America counterpart, Kenneth D. Lewis. And on January 11, 2008, Bank of America announced it had agreed to buy Countrywide for $4 billion in an all-stock transaction.[53] The stock’s value settled at about $5½ per share following the announcement; it had been as low as $4.43 before the Bank of America deal was announced.[54]

    After more than six months of financial deterioration at Countrywide—despite a $2 billion infusion of cash from Bank of America in August—Mozilo said he was ready to throw in the towel, according to Lewis.

    At the same time, having watched Countrywide dramatically retool its operations in a bid to survive, Bank of America executives began to believe Countrywide’s big U.S. mortgage business might be worth having.

    “The ability to get that kind of size and scale became more appealing as we saw the business model change to a model we could accept,” Lewis said. “We considered the lawsuits, the negative publicity that Countrywide had. We weighed the short-term pain versus what we think will be a very good deal for our shareholders.”

    Bank of America deployed 60 analysts from its headquarters in Charlotte, N.C., to Countrywide’s headquarters in Calabasas, Calif. After four weeks analyzing Countrywide’s legal and financial predicament, and modeling how its loan portfolio was likely to perform, Bank of America offered an all-stock deal valued at $4 billion for Countrywide—a fraction of the company’s $24 billion market value a year ago.[citation needed] Countrywide shareholders approved the deal on June 25, 2008[55] and it closed July 2, 2008.[56] Bank of America announced on June 26, 2008 that the takeover of Countrywide Financial Corp. will result in the loss of 7,500 jobs over the next two years.[57]

    The deal is a landmark in the housing crisis, given Countrywide’s prominence as the nation’s largest mortgage lender, at least until recently.[58] “

  54. rugger9 says:

    Odd that once again certain connected banks are off the list. It seems to be a pattern, but I’m not aware of any connections to the WH [i.e. GS-> Timmeh] at Wells Fargo unless it is via Wachovia. That is a topic worth digging into, since I am also not aware that Wells behaved any better in general, or B of A any worse in general relative to the market.

  55. dcgaffer says:

    @A Guy Who Sues Insurers:

    I only read through the Merrill compliant, and found it devastating.

    FHFA does allege both Common Law Fraud and Aiding and Abetting Fraud in addition to multiple violation of Federal and State Securities Acts.

  56. CaDa says:

    I’m betting that Timmy is hiding this weekend. Suing them is not the way to get a job with GS. Looking back a few weeks, this is probably the reason he wanted to “spend more time with his family”.

    I wonder if Obama has given up on his second term. This could hardly be at a worse time if he expects to receive funds and support from the banksters.

  57. P J Evans says:

    If Mr O has given up on his second term, he’s not communicating it to his supporters, who are trying to convince us that he’s really a Democrat and just playing more eleventy-dimensional chess.

  58. posaune says:

    OT-y type question for EW:

    Just read news of the Vatican slapping the Irish govt re the church sex abuse reports. The govt wants church assets for victim compensation. Who controls church land in Ireland? I.,e, in Maryland and most of the US, it is the bishops name on the land records, plat, etc. Is that the case in Ireland? Will it come to the Irish bishops turning deeds to the govt over the Vatican’s objections? What’s next? A mercenary bishop corps in Ireland (presumably from Latin America)? Hmmm.. … how Cromwell.

  59. joberly says:

    @Jim Hicks: # 78. There is a blogger at Thomson-Reuters-Westlaw, Alison Frankel, who has been following the cases. She interviewed the partners at the law firm that drew up the complaints on behalf of FHFA. According to the interview, the firm decided to specialize in mortgage-backed-securities law some time in 2007 or 2008. That firm (Quinn, Emanuel, Urquhardt and Sullivan)might be the only one with deep enough pockets to invest three years of research on these suits. Here’s the link: http://newsandinsight.thomsonreuters.com/Legal/News/2011/09_-_September/Quinn_Emanuel_is_not_riding_an_MBS_wave__it_triggered_a_tsunami/

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