Posted on 07/02/2012 5:07:21 PM PDT by Kartographer
Morgan Stanley successfully pressured Standard & Poor’s and Moody’s Investors Service Inc. to give erroneous investment-grade ratings in 2006 to $23 billion worth of notes backed by subprime mortgages, investors claimed in a lawsuit, citing documents unsealed in federal court. ... The unsealing of the internal documents from Moody’s and Standard & Poor’s came in one of the largest ratings lawsuits to emerge from the 2008 financial crisis. The lawsuit was filed in 2008 by Abu Dhabi Commercial Bank, based in the United Arab Emirates, and Washington’s King County, which includes Seattle.
2007. SIVs issued short-term debt to fund purchases of higher- yielding long-term notes and failed when credit dried up amid the financial crisis, sparked by investments in mortgage-backed securities.
As Morgan Stanley bankers were designing the Cheyne notes, they asked Moody’s to use the same volatility assumptions for subprime-backed mortgage securities as for those that had prime home loans as collateral, the investors allege in today’s filing. The ratings company agreed, the investors claim.
“We in fact built everything,” Dorothee Fuhrmann, an executive for New York-based Morgan Stanley, said according to the documents, allegedly referring to the risk-analysis methods applied to the Cheyne ratings.
(Excerpt) Read more at zerohedge.com ...
PING!
You beat me to it. I was just reading this. I know this is shocking about the completely honest ratings agencies we have. Just as honest as CNN, MSNBC, etc./s
TARP was nothing more than armed robbery of the American public.
So who is going to jail?
The rating companies could have disagreed with Morgan Stanley’s proposed method of dealing with a new type of security. They didn’t. So what?
Nobody and we get stuck with the bill for what they stole.
You won't catch any flak from me. I agree with you 100 percent. These guys should be in jail for life and have to forfeit all of their assets. This is sheer corruption and the amount of misery they brought on the world is very much criminal.
But, not one of them will go to jail because anyone in congress that dare push for that will lose all their campaign contributions.
The taxpayers have been had twice, once by these guys at the ratings agencies and again by our elected representatives. Corruption, corruption, corruption...
The Obama administration and key Dem members of Congress have openly threatened S&P and Moodys that they “better not” downgrade this and that. Openly quarreling just who the hell they think THEY are etc. The chickens have come home to roost
They can rate them higher than Mother Teresa, but there was (and probably still is) a county website in Florida where you can ACTUALLY LOOK at the loans that were being made through 2006 - you got to see the principal and the terms.
It was SO OBVIOUS that those loads would NEVER get paid back once the bubble topped out...which was in 2005/2006...that ANY IDIOT (i.e., me) could have made a KILLING shorting these IDIOTIC bankers (which I did, and my wife has a very nice car, thank you).
My point being that the lawsuits are SILLY - if some loser in Texas (me) could figure this scam out and make 5 figures out of it, then “the experts” either could have done the same (actually much better...since it wasn’t their money to gamble anyway), or they have NO BUSINESS doing what they do.
In other words, if they ACTUALLY BELIEVED that an Option ARM of $350k on a house actually worth $100k was a good call by the bank, then they deserve to get their butts kicked and they have NO JUSTIFICATION to go around suing.
Keiser Report: Ground Zero of Financial Terrorism
Listen and weep people . . .
I first posted this report on FR on or about June 30th. He mentions using guillotines on criminals in this report.
The bank part was paid back, at a profit to the Treasury.
The auto bailout portion will never be paid back in full.
Thanks for the ping!
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