Five years out from the financial collapse, one would almost expect that we wouldn't still routinely be finding out about ways in which banks like Goldman Sachs and Bank of America manipulated financial markets in order to essentially pillage the American economy. Alas!
Yesterday in federal court, the city of Los Angeles filed suit against Bank of America accusing it of predatory lending schemes. According to the suit, the bank targeted minority neighborhoods with mortgages (including subprime) extended on predatory terms, thus sticking homeowners with loans the bank knew were unlikely to be repaid. The city alleges the following wave of foreclosures led to loss of taxes and millions of dollars in foreclosure-related expenses. Though Bank of America contests the allegations, this shit isn't exactly a secret.
Yesterday also brought the conclusion of the case of Matthew Taylor, a former Goldman Sachs trader who ignored the firm's limits by amassing an $8.3 billion trading liability in 2007. Despite Goldman quickly uncovering the scheme (which lost them $118 million), they merely fired Taylor — whose salary at the time was $150,000 plus a $1.5 million bonus — without notifying proper authorities. Taylor would quickly find a job at Morgan Stanley, where he worked as a trader for four years. Charges would not be brought until earlier this year.
Taylor was sentenced to nine months in prison after pleading guilty to a single count of wire fraud. He will also have to spend 400 hours tutoring children from low-income neighborhoods in math, so those children can presumably grow up to make billions of dollars for investment banks.
William Pauley, the U.S. district judge assigned to the case, lashed out at both the bank and the government during sentencing, saying that the former was negligent in its duties and that the latter moved for a quick plea deal for publicity reasons. (It worked!)
"Everything about this case is sad," Pauley said to Taylor. "Your employer's response was sad. Your conduct was sad. The government's conduct — it's sad."
And so it goes.
[image via Getty]