“Widespread Interconnected Ponzi Scheme”
Repairing the Damage of
“Fraud as a Business Model”
Presentation to the
Federal Housing Finance Agency Supervision Summit
Janet Tavakoli, President
Tavakoli Structured Finance, Inc.
December 8, 2010
Janet Tavakoli’s presentation she prepared for the Federal Housing Finance Agency Supervision Summit earlier today…
Some key takeaways from the presentation…
Widespread Interconnected Ponzi Scheme
Securitization professionals at several financial institutions knowingly bundled fraud riddled loans into RMBS. New investors needed to pay-off old investors. To delay being busted, they escalated and sped up the fraud. This required more “complexity” and the involvement of more cronies. Many CDOs and virtually every CDO-Squared were more fraud to cover-up fraud.
Fraud audits are in order
Financial Meth Labs
• Investment banks – securities fraud
• Mortgage lenders – widespread fraud
• Rating agencies – junk science
• CDO “managers” – crash test dummies & accomplices
• Certain hedge funds – shorted CDOs they “managed”
• Bond insurers – money for nothing
• Regulators – poseurs and enablers
Banks (not borrowers) Broke the Law
• Delinquency is not a crime.
• Being foreclosed upon is not a crime.
• Bankruptcy is not a crime.
Full presentation below…