Wednesday, December 15, 2010

In Fraud, Big Boys Walk Free

Via Zamansky & Associates. 
The more recent case involving Bank of America stems from its former broker-dealer unit, Banc of America Securities LLC., which just last month took the name Merrill Lynch Pierce Fenner & Smith Inc.
What’s fascinating about the case is that the self dealing and greed that was part and parcel of the mortgage crisis was firmly part of Banc of America Securities’ culture years before the mortgage meltdown.
The misdeeds took place between 1998 and 2002, and Banc of America Securities scored points with the Securities and Exchange Commission for self-reporting the bid rigging and kickbacks. In fact, the Department of Justice in 2007 gave the firm amnesty for criminal prosecution because of its self-tattling.
Regardless, Banc of America’s action endangered the muni-bond marketplace, which means that the firm put thousands of investors’ savings at risk. “This conduct threatened the integrity of the municipal marketplace, affecting not only the municipal issuers who were directly defrauded, but also the thousands of investors nationwide who purchased their tax-exempt municipal securities,” said Elaine Greenberg, chief of the SEC’s Municipal Securities and Public Pensions Unit. The broker-dealer, as is customary in such matters, didn’t admit or deny the SEC’s findings.

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