Streams

Why Wall Street’s Leaders Escaped Prosecution

Tuesday, January 22, 2013

Frontline producer and correspondent Martin Smith talks about his investigation into why the U.S. Department of Justice has failed to act on credible evidence that Wall Street knowingly packaged and sold toxic mortgage loans to investors, loans that brought the U.S. and world economies to the brink of collapse. Frontline’s documentary “The Untouchables” includes interviews with top prosecutors, government officials and industry whistle-blowers, and reports allegations that Wall Street bankers ignored pervasive fraud when buying pools of mortgage loans. “The Untouchables” airs January 22, at 10 p.m., on PBS.

Guests:

Martin Smith
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Comments [17]

Amy from Manhattan

Sheldon: People "happened" to be denied prime loans because of their skin color or neighborhood? They didn't just happen to be denied loans w/better terms; people working at the banks actively decided to steer them to subprime loans. That's racism, not something that just "happened."

Jan. 23 2013 01:21 AM
Teri Buhl from New Canaan, CT

For readers who know my investigative wall street reporting at the New York Post, The Atlantic, Forbes, NY Mag - you will get to see me in tonight's film. Martin has taken a look at the people and firms who used complicated wall street products to steal from their own clients and shows how it just doesn't make sense that these people are not in jail.
Here is an example of what some of the players in the film did
http://www.theatlantic.com/business/archive/2011/01/e-mails-suggest-bear-stearns-cheated-clients-out-of-billions/70128/

Jan. 22 2013 12:58 PM
fuva from harlemworld

And, rich, yes, this aspect must be discussed, so its relevance to the Great Recession can be rightly debunked. Again. And again.

Jan. 22 2013 12:45 PM
fuva from harlemworld

Sheldon, nah.

Jan. 22 2013 12:43 PM
fuva from harlemworld

We require a Shame Parade, to be held in D.C., in which we march with giant photos of the sheisty financiers and officials, while their alleged misdeeds are shouted from the podium.

Jan. 22 2013 12:42 PM
rich from brooklyn

what about the government's role to push mortgaes going back to the Carter years.
Furhter reinforced during Clinton years (end of the Glass-Stiegle). Indorsed by Bush.
What about the role Fanny and Fredie.
Why is this part of the story never discussed?????

Jan. 22 2013 12:42 PM
Jim

@josh and jonah

Martin Smith seemed to imply that no government action has been taken because that sort of thing was underfunded prior to Obama. Well, four years later and still nothing. Both parties are complicit and, from the tone of this interview, even Frontline has lost its edge and is pulling punches and giving the government a pass. I hope I'm wrong, as I have long respected their work. I also hope that Frontline will demonstrate some balance by taking on Fast and Furious one day...

Jan. 22 2013 12:40 PM
anonymous

At least one ratings agency had hard evidence that the "due diligence" contractors were not doing their jobs (not performing the investigations, fudging the info, "creating" data, other words "faulty due diligence"),

Jan. 22 2013 12:38 PM
Sheldon from Brooklyn

Sub-prime mortgages in their essence are and were not a bad thing. It allowed people with less than stellar credit and those with good credit, who happened to be denied prime loans, due to their skin color or neighborhoods they happen to live in, or want to buy into - finance a home.

The problem is fraud, as the guest said, especially with the "grade A" stamping of "Liar" loans.

Jan. 22 2013 12:34 PM
Charles from Tribeca

What is Bloomberg' role in the banking scandal.
His wealth increased from 5 billion in 2005 to 20 billion in 2008.
Wall Street are his clients.

Jan. 22 2013 12:33 PM
Jonah from Ny

Obviously, the size of the banks and all corporations is the root of all problems. They are governments, this is treason. Iceland endited their banks and has the most resilient economy because of it. The only way to save the environment, our health, wealth, tne economy, the future, is to limit the size of corporations.perod.large corporations are destroying everything and everyone, poisoning food, the air, the water, our bodies with toxic pharmaceuticals, peoples lives and potential of humanity.this is obvious and we need to break the taboo over talking about this.

Jan. 22 2013 12:31 PM
Jim

If HSBC is fined billions by the Justice Dept for laundering Iranian funds, is not the Justice Dept now being funded by Iran?

This is more than just a slippery slope.

Jan. 22 2013 12:28 PM
josh Karan from Washington Heights, northern Manhattan

Are either Leonard of Martin going to pose the question if the banks are too big to jail/fail, then they should be taken over, broken up, and/or made public institutions like the Bank of North Dakota.

Without this question we are all as Bruce Springsteen sings, 'just dancing in the dark"

Jan. 22 2013 12:26 PM
Sheldon from Brooklyn

Hmm, so if you commit fraud that makes you billions, you just pay a "fine" of hundreds of millions? and that's OK?

Jan. 22 2013 12:25 PM
Truth & Beauty from Brooklyn

When this mortgage scandal was taking place, I was working at a law firm doing real estate work. I can't tell you the number of times I saw transactions taking place that were completely unreasonable. Until that time, I was accustomed to purchasers putting down 10% at signing and another 10% during closing and having an 80% mortgage that they could afford. During this mortgage scandal, people were taking out 106% mortgages on homes that were clearly overvalued and which they could never afford. At one point, we had a closing scheduled and when the bank attorney showed up, he reviewed the documents, declared it was bank fraud and left without closing. I so wish there had been more honest lawyers like that - and I bet all our former clients who were foreclosed upon wish the same thing.

How dare anyone approve a mortgage for people who clearly cannot show sufficient income to repay it? I do recall that Countrywide was one of the banks our clients were using.

On the other hand, you have to wonder why people who cannot afford a mortgage are willing to buy an overpriced property knowing that when the balloon comes up they will likely be out on their posteriors.

Jan. 22 2013 12:24 PM
John A

America: Too big to fail. Repeat throughout the culture.
-
Who are some of the names 'Frontline' got on camera? Did they get Spitzer, for example?

Jan. 22 2013 12:19 PM
Amy from Manhattan

Someone at the Justice Dept. was worried about the ripple effects on the economy of trying financial institutions' execs for criminal activities? What about the ripple effects on the economy those criminal activities have already had?

Jan. 22 2013 12:15 PM

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