Article: Bank of America: Bondholders’ Naked Play for a “Do-Over” on Mortgages

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Bank of America: Bondholders’ Naked Play for a “Do-Over” on Mortgages

Marion Maneker

CBS, 20 October 2010

Yesterday’s Bank of America (BAC) bond scare was an interesting reminder of just how much of a mess the foreclosure crisis really is. It may not be the same kind of swoon we experienced two years ago, but the vulnerabilities created by the shoddy mortgage origination and servicing industry will probably haunt the financial system for years to come — like war reparations.

It took a while for the financial world to sort out the meaning of the letter PIMCO, Blackstone and the New York Federal Reserve Bank sent to Bank of America yesterday asking that $47 billion in bonds be “put back” to the bank because of deficient servicing by Countrywide, the Bank of America subsidiary that originated the loans. The markets and the journalistic community can be forgiven for over-reacting.

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Article: Cox’s SEC Censors Report on Bear Stearns Collapse

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Cox’s SEC Censors Report on Bear Stearns Collapse

Mark Pittman, Elliot Blair Smith, Jesse Westbrook

Bloomberg cited by RGM Communications via Wayback, 7 October 2008

U.S. Securities and Exchange Commission Chairman Christopher Cox’s regulators stood by as shrinking capital ratios and growing subprime holdings led to the collapse of Bear Stearns Cos., according to an unedited version of a study by the agency’s inspector general.

The report, by Inspector General H. David Kotz, was requested by Senator Charles Grassley to examine the role of regulators prior to the firm’s collapse in March. Before it was released to the public on Sept. 26, Kotz deleted 136 references, many detailing SEC memos, meetings or comments, at the request of the agency’s Division of Trading and Markets that oversees investment banks.

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Article: SEC Gave “Preferential Treatment” to Wall Street CEO

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SEC Gave “Preferential Treatment” to Wall Street CEO

Brian Ross, Rhonda Schwartz

abc News, 6 October 2008

The SEC gave “preferential treatment” to Wall Street executive John Mack during an insider trading investigation three years ago because Mack was about to become CEO of the Morgan Stanley investment banking firm, the SEC’s inspector general concluded in a report obtained by ABC News.

The report recommended disciplinary action against the SEC’s chief of enforcement, Linda Thomson, and said the firing of an SEC lawyer was “connected” to his persistent attempts to take Mack’s testimony. Read the report’s conclusion and recommendations here.

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Article: Bringing Down Bear Began as $1.7 Million of Options

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Bringing Down Bear Began as $1.7 Million of Options

Gary Matsumoto

Bloomberg cited by RGM Communications via Wayback, 11 August 2008

On March 11, the day the Federal Reserve attempted to shore up confidence in the credit markets with a $200 billion lending program that for the first time monetized Wall Street’s devalued collateral, somebody else decided Bear Stearns Cos. was going to collapse.

In a gambit with such low odds of success that traders question its legitimacy, someone wagered $1.7 million that Bear Stearns shares would suffer an unprecedented decline within days. Options specialists are convinced that the buyer, or buyers, made a concerted effort to drive the fifth-biggest U.S. securities firm out of business and, in the process, reap a profit of more than $270 million.

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Article: Bringing Down Bear Stearns

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Bringing Down Bear Stearns

Bryan Burrough

Vanity Fair, 30 June 2008

On Monday, March 10, the rumor started: Bear Stearns was having liquidity problems. In fact, the maverick investment bank had around $18 billion in cash reserves. But soon the speculation created its own reality, and the race was on to keep Bear’s crisis from ravaging Wall Street. With the blow-by-blow from insiders, Bryan Burrough follows the players—Bear’s stunned executives, trigger-happy reporters at CNBC, a nervous Fed, a shadowy group of short-sellers—in what some believe was the greatest financial scandal in history.

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