NEW YORK ( TheStreet) -- Federal regulators are stacking up cases against the big banks over alleged mortgage fraud, but they are still having a hard time finding evidence to prosecute individuals for any wrongdoing.
According to a Wall Street Journal
The settlement is expected to be the first in a series of SEC enforcements against banks involving the sale of mortgage-backed securities, according to the report, citing people close to the probe.
But for critics of the Wall Street culture of reckless risk taking that led to the financial collapse, the SEC's recent practice of entering into similar settlement agreements comes across as weak sauce.Other prosecutors are also coming up short in holding individuals accountable for faulty underwriting practices. New York Attorney General Eric Schneiderman filed a civil fraud lawsuit against J.P. Morgan that alleges widespread fraud by Bear Stearns but does not name any individuals. The U.S. Department of Justice filed a lawsuit for over $1 billion last month against Bank of America (BAC) for alleged multi-year mortgage fraud. Manhattan U.S. Attorney Preet Bharara called it "brazen in scope." Yet the suit did not name any individuals as defendants. It did identify two officals who oversaw the faulty mortgage origination process. One of them, Countrywide COO Rebcca Mairone, is now a mortgage lending executive at JPMorgan Chase, as TheStreet reported last month, and is involved with the bank's independent foreclosure review. The Federal Housing Finance Agency is the only regulator that has so far been aggressive in going after individuals. The bank filed a lawsuit against 16 banks last year. In its suit against JPMorgan relating to $33 billion in mortgage securitizations, it named 42 individuals, according to the report The FHFA might actually have a good case against the big banks. Alison Frankel at Reuters
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV