Friday, March 02, 2012
Putting on a show for the masses
It's an election year and after three years of inaction the Department of Justice is cranking up its Legal Kabuki section to make the rubes think they are actually doing something about the mortgage securitization frauds.
A U.S. Justice Department inquiry into the packaging and sale of home loans by the biggest U.S. banks casts a wide net and appears to significantly overlap with other enforcement efforts, according to people who have viewed subpoenas sent to the firms.The overlapping subpoenas are mostly to muddy the waters and in some cases co-opt winnable cases so that no bankster suffers any harm. And when the election is over the hubub will settle down to a hush that will quietly disappear after a decent interval.
The civil subpoenas that were sent in January ask for documents related to every offering between 2006 and 2008, including bonds backed by Fannie Mae and Freddie Mac, three people familiar with the matter said.
An older investigation by the U.S. Securities and Exchange Commission focused on the first two years, and limited its scope to private offerings, the people said.
The general nature of the subpoenas and the overlap with SEC inquiries suggest investigations related to the financial crisis could drag on for years.
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