Justice Department’s “New Toy” Could Cost Wall Street Big Bucks - News and Current Events | futures io social day trading
futures io futures trading

Justice Department’s “New Toy” Could Cost Wall Street Big Bucks
Updated: Views / Replies:225 / 0
Created: by kbit Attachments:0

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors – all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you don’t need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Thread Tools Search this Thread

Justice Department’s “New Toy” Could Cost Wall Street Big Bucks

  #1 (permalink)
Elite Member
Aurora, Il USA
Futures Experience: Advanced
Platform: TradeStation
Favorite Futures: futures
kbit's Avatar
Posts: 5,884 since Nov 2010
Thanks: 3,303 given, 3,334 received

Justice Department’s “New Toy” Could Cost Wall Street Big Bucks

The Department of Justice has taken a lot of flak for its response to the mortgage crisis that helped lead the U.S. into the Great Recession in the middle of the last decade. Criminal prosecutions have been few, and settlements with large banks, such as B of A and JP Morgan Chase have taken years to materialize.

But some experts believe DOJ has found a successful strategy that could wind up costing banks and the Wall Street firms that securitized and sold questionable mortgage securities an awful lot of money.

Late Wednesday, news broke that DOJ and Bank of America were close to agreement on a civil settlement that would require the bank to pay as much as $17 billion for its role in the crisis. If the two parties come to an agreement, the eye-popping dollar figure will likely be the one thing people remember about the bank’s dealings with Justice. However, a less-noticed case that actually went to trial could be Bank of America’s real contribution to the history of DOJ’s response to the crisis.

In a case specific to a set of mortgages underwritten by the former Countrywide Financial, which Bank of America bought in 2008, the bank challenged a Justice Department’s interpretation of the Financial Institution Reform, Recovery and Enforcement Act in its civil suit.

DOJ, in essence, charged that the bank had committed fraud, but because it did so in a civil suit, it was only obliged to prove the charges by a “preponderance of the evidence” rather than the reasonable doubt standard normally applied to criminal cases.

“There is something counterintuitive about making a civil penalty contingent on a criminal violation only proved by the civil standard,” said Peter Henning, a professor at Wayne State University Law School in Detroit.

Another strange element of the case is that FIRREA reads as though it is supposed to apply to cases of fraud committed against a bank – not fraud by the bank itself. The government has argued that the fraud, while ostensibly committed by the bank, also affected the bank, and that the charge was permissible.

The approach has survived the scrutiny of several federal courts, and in recent ruling in the penalty phase of the case related to the former Countrywide’s mortgage practices, Manhattan Federal District Court Judge Jed S. Rakoff ruled that BofA was liable for $1.26 billion in penalties.

The Countrywide program in question – known as the High Speed Swim Lane, or Hustle, within the company – represented only a small fraction of the firm’s mortgage portfolio, meaning that penalties in cases dealing with larger programs could skyrocket.

“It’s turned out FIRREA has been a Godsend to the Justice Department, like unearthing a new toy,” said Herring. “The win in the Hustle case is going to give them a lot of leverage, so I think we’ll see settlements. I don’t think banks want to take these cases to trial.”

Herring said that there is also strong speculation in the legal community that DOJ may soon start using the FIRREA strategy against Wall Street firms that packaged and sold mortgages that they knew, or should have known, were of poor quality.

And though to many people, the mortgage crisis of the middle of the last decade may seem like ancient history, companies with potential culpability can’t afford to treat it that way. That’s because FIRREA offers DOJ one further advantage.

“The nice thing for them is that it has a ten-year statute of limitation,” said Herring. “They’re not even brushing up against it.”


Reply With Quote


futures io > > > > Justice Department’s “New Toy” Could Cost Wall Street Big Bucks

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Upcoming Webinars and Events (4:30PM ET unless noted)

Wyckoff Hunting for Great Risk/Reward Ratio w/Gary Fullett

Elite only

Digging into the Details of iSystems w/Stage 5 & iSystems

Jun 5

Similar Threads
Thread Thread Starter Forum Replies Last Post
Better Markets sues Justice Department over JPMorgan deal kbit News and Current Events 0 February 10th, 2014 11:14 PM
How Big Is Wall Street's Housing Bet? Pretty Big Quick Summary News and Current Events 0 January 9th, 2013 06:00 PM
Justice Department sued for hiding secret NSA surveillance program kbit News and Current Events 0 August 30th, 2012 08:13 PM
Anonymous Has Hacked The Department Of Justice.... kbit News and Current Events 1 January 19th, 2012 05:42 PM
Justice Department Opens a Door on Online Gambling Quick Summary News and Current Events 0 December 25th, 2011 10:00 AM

All times are GMT -4. The time now is 11:08 AM.

Copyright © 2018 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts
Page generated 2018-05-25 in 0.07 seconds with 19 queries on phoenix via your IP