No, in fact it's not at all like that. It's more like prosecuting the pharmaceutical industry because they knowingly sold a bunch of cyanide pills but marketed them as medication. And, as it turns out, there are longstanding laws preventing firms from knowingly marketing toxic **** as quality products.

Socialism for corporations, capitalism for the rest of us.

Too big to sue

Economy too weak to sue

Gogogo corporate robots.

Pharmaceutical Companies are sued by the government (or at least fined by the FDA without a lawsuit) if they advertise an indication that the FDA does not believe is 100% backed up by clinical studies, or if they don't enumerate all the risks and possible side effects tht were found during the sutdies.

This is similar to Pfizer knowingly withholding information about an adverse effect one of their drugs has to make it more palatable to doctors, when current law obligates them to disclose it. Then claiming it's not their fault because it was being prescribed by hospitals who should be medical experts and know what they are prescribing. The expertise of their customers does not matter if they had an obligation to disclose something and didn't do it because the "experts" buying their product count on these companies doing the things they are legally required to do.

Sales to consumers and to businesses are held to very very different standards.

Would you care to elaborate in what way this is relveant to the dicussion in this thread but has not already been covered?

They either did or didn't, but would you go into this type of litigation during major pandemic, knowing fully well that if you win they would stop producing medications?

You started off arguing that the pursuit of this case was politically motivated, but now you seem to be arguing that there should be a politically motivated failure to pursue the case. Why not just figure out the facts and determine liability, if any, under the law? BAC has a 70B market cap, so there's got to be some value there to pursue.

I started off by saying that if there are any other motivations than political pay back i am not aware of them. BAC lost 25-30% of market cap since July and thats with healthy injection of funds into it. By the end of that litigation, BAC may be at 20-30% of what it is right now and that without knowing if they guilty or not. What are you going to recover then? Meanwhile BAC just anounced a plan to close 600 more branches...recovery hah? If they would only go after one bank, i'd still say go for it, but when they jeopardizing entire industry by what may very well be a frivolous lawsuit, other things have to be considered.

It's real simple,the FHFA wins,the banks get another taxpayer bailout. The banks win,Fannie and Freddie get another bailout.

Pretty much, but meanwhile countless jobs will be lost regardless of the outcome.

It's already been pointed out that the timing was probably motivated by statute of limitations issues, as the conservatorship of Fannie and Freddie started 3 years ago Tuesday.

It's also preposterous to characterize these lawsuits as frivolous. It may prove to be the case that few or none of the defendants have liability, but it seems pretty clear that securities were issued under prospectuses containing material misstatements, and that billions of dollars of losses followed. That's a prima facie case right there.

Even assuming the doomsday scenario where BAC's value drops by 70-80%... that's still $15-20 billion that can be recovered for the taxpayer, just from BAC. It's important not to conflate the bank bailouts with the FHFA takeovers. TARP and related bailouts went pretty well for the taxpayer. Fannie and Freddie are catastrophes. It's pretty reasonable to lean on BAC (currently worth $70 billion to its investors, remember) to make good some of those taxpayer losses, if it ultimately turns out that they are legally responsible.

That analogy makes no sense. They are accused of violating long standing and relatively straightforward prohibitions on lying about the product you sell. As noted below, the analogy here is cyanide pills mislabeled as aspirin, in which case I'm not real worried about an interruption in my deliveries of poison.


That's why we have a court system.

What? FHFA is the victim. That's why they are suing.

??? Establishing damages in a fraud case is relatively straightforward.

These are nonsensical. How does the lawsuit cause damages if the banks win? Attorney fees aren't going to bankrupt multinational corporations. The hurt feelings of bankers who feel picked on just because they engaged in rampant, economy destroying criminality? I'll fedex them some tissues.

Despite the link in the OP and quoting of the filings I get the impression that you don't understand who is being accused of what.

I have an impression that you basing your opinion ONLY on the link in the OP and didn't even bothered to read entire article in that link. Comparing cyanide pills mislabeled as aspirin is not valid as it is showing an intend to kill but in this case even FHFA is not claiming intend but negligence (what to do you do for a living again?). More valid would be comparing using cocaine as topical analgesic or heroin as a painkiller. While they were considered safe (according to clinical trials) entire industry used them until evidence showed otherwise. And even that is not really valid since patients had no way of evaluating the danger of using them and weren't warned in advance but in our case:
By the time banks win, investors would drop share prices to about a half of what they were a month ago if not more. You know that banks market cap has something to do with their ability to operate, right?

Ahigh, are you saying that BAC is a $20 bill company because of these lawsuits but investors don't realize it yet?

Are you shorting BAC right now?

"They should have known I was lying when I told them these loans were the good loans" remains a pretty... unique... defense to an accusation of fraud.


Also, you should be shorting the bank stocks hard, they didn't fall by half when these lawsuits were filed, you've clearly got the market beat here.

I am saying that lawsuits are introducing uncertainty into valuation of the stock and there will be substantial adjustment. Some of it will be based on actual numbers and some of it would be purely speculative. We all remember when citi stock dipped to $1, right? Do you think that at that moment citi was 27b company and in a month it was 75B company again?

its cute that you come back every 10 or so posts to say this as if its true

You said that before and it worked for none but you. You that in love with the sounds of your own voice? Any time you buy speculative security (*** anytime you buy gold) you running the risk of losing money but you doing it cause you hope to make money. If you accusing someone of failing to perform the due diligence you will have a hell of a time proving that you yourself did everything you could.

Do you know what fraud is?

Making bad or unlucky investments is one thing. This is not that. One cannot knowingly sell **** as Shinola.

When a bank, like GS, goes massively short the portfolio of RMBS it created, it knew what was in it was likely to detonate, yet it marketed the stuff to investors as AAA paper. That's fraud, bro. (This actually happened)


And once investigators find out about this stuff, they prosecute it. These prosecutions are not, and should not, be based on the current direction of the Dow, the unemployment rate or the direction of the wind because failure to prosecute fraud begets more fraud.

Do you need to prove that "you yourself did everything you could"?

Also the accusation includes failure by the banks to perform due diligence, but that's not the only claim FHFA is making. They are also accusing them of misrepresentation and fraud. The person being defrauded does not, AFAIK, have some sort of obligation to peek behind the curtain to make extra sure they aren't being defrauded before it counts as fraud. I'm certainly no expert in this, though.

...and that would only be the begining.

AHigh,

Until you learn what fraud is you're going to continue looking like a moron.

Investor due diligence has pretty much nothing to do with liability for material misstatements in a prospectus.

It's not really right to call this securities fraud, by the way. There's no intent element for false statements in a prospectus. If you say something false and investors lose money, you're on the hook unless you have an affirmative defense.

EDIT: I'm sure the plaintiffs are alleging securities fraud, because that's what plaintiffs do, but the fraud claims are way harder to prove.

I will personally mail you $20 in cash if you can support this statement with a cite to some aspect of actual law in the United States.