‘Pervasive’ Fraud by Our ‘Most Reputable’ Banks
A recent study confirmed that control fraud was endemic among our most elite financial institutions: Asset Quality Misrepresentation by Financial Intermediaries: Evidence from RMBS Market. Tomasz Piskorski, Amit Seru & James Witkin (February 2013) (“PSW 2013”).
The key conclusion of the study is that control fraud was “pervasive.”
[A]lthough there is substantial heterogeneity across underwriters, a significant degree of misrepresentation exists across all underwriters, which includes the most reputable financial institutions.
Finance scholars are not known for their sense of humor, but the irony of calling the world’s largest and most harmful financial control frauds our “most reputable” banks is quite wondrous. The point the financial scholars make is one Edwin Sutherland emphasized from the beginning when he announced the concept of “white-collar” crime. It is the officers who control seemingly legitimate, elite business organizations that pose unique fraud risks because we are so loath to see them as frauds.
More here…
~
Where would WE be with out Mr.Black, Mr. Barofsky and the great reporters and WE know and appreciate the time it takes to tell the unbelievable truths of how the once respected position of “Banker or Lawyer” is IMHO like a crack smoker (Never tried it) once they start the deceptions they can’t STOP. Homeowners as Mr.Black said (in my words) we mucst read and look at the papers.