"These material misstatements occurred during a time of acute investor interest in financial institutions’ exposure to subprime loans, and misled the market about the amount of risk on the company’s books."
Reblogged from thecallus
Securities and Exchange Commission enforcement division director Robert Khuzami • Discussing the civil fraud charges that the SEC filed against six former top execs at Fannie Mae and Freddie Mac, charges that came about due to alleged misrepresentation of investors’ exposure to the subprime mortgage crisis. Lawyers for the six officials claim that the executives acted in the best interests of investors despite the allegations otherwise. (via shortformblog)
So…Fannie Mae mis-stated risks. The banks mis-stated risks. The originators and servicers mis-stated risks. Borrowers mis-states risks. The entire value chain of the mortgage market was founded on fraud.
And the SEC let it happen for decades, which is why it gets to sue everybody.
(via thecallus)
