US: Fibbies investigates Wall Street for fibbing
The foundations of Wall Street have been shaking for weeks but most actors thought that they were safe in saying "it was bigger than us, and we didn't know what we were doing." But the FBI thinks there may be something stinky behind the slinky facades that have been more or less impregnable. And this time, it's not New York's DA that's going digging.
Freddie Mac, Fannie Mae, American Insurance Group and Lehman Brothers are four out of 26 financial institutions being investigated by the FBI, which is also looking at the conduct of senior officers and other staff.
"The FBI continues to investigate a number of companies for sub-prime lending practices, but the department brings criminal prosecutions based solely on the facts and the law," Brian Roehrkasse, a Justice Department spokesman, said.
"Where we find evidence of criminal wrongdoing, we will prosecute."
Banks have been foundering at the rate of about one each week for several months - and that is not black humour. FDIC has taken over more banks this year than Barclays and Nomura combined.
Bear Sterns, Goldman Sachs and Morgan Stanley - despite the latter two still being around - have also had visits. Two Bear Sterns executives have already been charged that they misled investors as to the health of asset-backed securities.
But hey: anyone wanting to see consistent overstatement of the health of the financial sector should be looking not just at the banks but at the US Treasury which kept trying to talk up the sector when the carnage was already inevitable.
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