Contrarian Pundit

The feds are finally getting serious about pursuing mortgage fraud and related crimes during the bubble era.  Yesterday it was announced that the FDIC is suing four former executives at IndyMac for negligently approving billions in ADC loans to, shall we say, less-than-credit-worthy borrowers. If you recall, Indymac was seized by the FDIC in July [...]

You might be hard pressed to imagine a pro-banking-industry proposal that Geithner, Bernanke, Sheila Bair, and John Dugan all think is stupid and destructive, but Rep. Ed Perlmutter (D., Colo) has succeeded:
Attention is focused on the House-Senate conference on a once-in-a-generation rewrite of the rules of finance. But a provision added, almost unnoticed, to a [...]

Since this is Bank Failure Friday, the day when regulators seize failed financial institutions, I thought I should review some of the Bay Area’s problem banks.
There are currently eight companies that have received enforcement actions by regulators and are therefore under increased scrutiny:
(1) Community Bank of San Joaquin (Stockton)
(2) Fireside Bank (Pleasanton)
(3) Gateway Bank, FSB [...]

Almost a week after Tamalpais Bank was seized by regulators, the company’s chairman of the board, Carolyn Horan, wrote a letter, co-signed by CEO Mark Garwood, apologizing to shareholders and “friends”:
We are sorry to inform you that Tamalpais Bank has lost its fight for survival. We are intensely aware the Bank’s failure adversely affects shareholders [...]

On April 16, Tamalpais Bank of San Rafael and Innovative Bank of Oakland became the third and fourth Bay Area banks to fail during the recent wave of collapses, which began in 2007. What about the eight other local institutions that made it onto Calculated Risk’s unofficial problem bank list?
Commenter Jean has alerted us [...]

When Lehman Brothers collapsed in September 2008, municipal retirement funds as close to home as the Alameda County Employees’ Retirement Association and as far away as the Government of Guam Retirement Fund lost millions of dollars.
On Friday, these investors added Lehman auditor Ernst & Young to their lawsuit against the investment bank for failing to [...]

Readers of the Valukas Report (i.e. masochists) may recall that the Federal Reserve Bank of New York conducted three, increasingly easier “stress tests” on Lehman Brothers in March 2008, all of which the teetering investment bank failed.  Then the Fed asked Lehman to conduct its own test that … surprise … it passed.
And now we [...]

Bill Black, a Contrarian Pundit hero, testified yesterday before the House Financial Services Committee on the Lehman Brothers bankruptcy report. He minced no words in explaining how federal regulators knew about the ongoing fraud at Lehman Brothers, had the power to intervene, but decided not to:
Lehman was the leading purveyor of liars’ loans in the [...]

Curiously, on the same day that the S.E.C. seized headlines by suing Goldman Sachs for fraud in civil court, thereby reassuring the world that it did, in fact, supervise the investment banking industry, the agency also released its inspector general’s 151-page investigation into its miserable failure to disrupt Sir Allen Stanford’s criminal enterprises.
The report is [...]

There has been a lot of triumphalist news lately about the government’s crackdown on American clients of UBS’s offshore tax accounts. Let us not let such media reports mislead us into believing that the Swiss bank has been thoroughly vetted.  For just like Goldman Sachs, UBS’s tentacles run deep into the U.S. government and [...]