The Seattle Times follows last week’s reports on Dexia’s lawsuit against JPMorgan Chase of fraud for its mortgage activities during the bubble:
They included slashing the internal quality-control staff; allowing loan officers to give mortgages to people with ever-lower credit scores without verifying their income or assets; and directing outside due-diligence consultants to give passing grades to subprime loans that the consultants had initially deemed defective.
If such loans, which generally were made to borrowers with poor or limited credit histories, could not be bundled into securities and sold to investors, WaMu itself would have had to retain them, and the risk they represented.
“I think it is important that we reduce the number of due-diligence rejects as much as possible since the current percentage is excessive,” wrote Michael Coyne, first vice president of WaMu’s capital markets group, to due-diligence consultant Clayton Holdings in an early 2006 email.
WaMu’s top executives settled an FDIC lawsuit in 2011 for $400,000 out of their own pockets.
— Can we get all senators on the banking committee to cede their question time to Elizabeth Warren? Rhetorical question, of course, but wow:
Watch her grill top regulators over their refusal to prosecute bank executives for the financial crisis. They have no good answers. It’s like she’s speaking Martian to them.
— As the hacking scandal continues to unfold, costing News Corporation tens of millions of dollars a quarter and with yet more arrests all the time, here’s some of the doings Rupert Murdoch’s “quality” UK paper, the Times of London.
Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.It heard, too, of her subsequent decision to reveal the speeding ticket switch to one of Britain’s most widely read newspapers, the Rupert Murdoch-owned Sunday Times, in order to “nail” her former husband and “bring Huhne down,” as she expressed it in e-mails shown to the court.
Evidence at the trial showed The Sunday Times aggressively encouraging Ms. Pryce to join in an effort to end Mr. Huhne’s career.
In the e-mails introduced by the prosecution, the paper’s political editor, Isabel Oakeshott, assured Ms. Pryce that going public with the story of the subterfuge over the speeding ticket in front-page articles without naming her as the person who falsely signed as the driver would inflict “maximum, perhaps fatal damage” to Mr. Huhne, by then a minister in the government and in the process of divorcing Ms. Pryce. This, Ms. Oakeshott said, would achieve “the dual purpose of bringing Huhne down, if we can, without seriously damaging your own reputation.”
