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Bank bailout fallout continues

SD plaintiffs will go to U.S. Supreme Court

If there is one thing that is generally accepted about the 2008 bailout of the banking system, it's that the big banks put up fraudulent mortgages as collateral for the federal government's bailout money. Two highly publicized lawsuits have established that the collateral was fraudulent.

So, in 2010, Nancy and Derek Casady filed a suit in district court against the big insurance conglomerate American International Group (AIG), Goldman Sachs, Societe Generale, Deutsche Bank, and Merrill Lynch, now part of Bank of America.

District court ruled the Casadys did not have standing to sue in that forum. So the Casadys appealed to the Ninth Circuit United States Court of Appeals. On Thursday (May 5), the appellate court threw out the suit without issuing an opinion.

"They sidestepped it," says attorney Mike Aguirre, who, along with his partner Maria Severson, represented the Casadys in the name of the United States government. The Casadys were not asking for damages for themselves. They wanted the bailout money to be put back in the hands of the federal government.

Aguirre and Severson are now preparing to go to the United States Supreme Court. "We knew at the beginning it would have to go to the Supreme Court."

One famous case was filed by Maurice (Hank) Greenberg, former chief executive of AIG. He claimed the bailout was unfair. Greenberg won the suit but got no monetary award. That case established that the mortgages used as collateral were toxic.

"That no bankers have been held accountable in court or by prosecution is our government's and our courts' failure, as recently mocked in the movie The Big Short," says Severson. "We are hoping the Supreme Court gives it the attention it is due."

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Comments
6

The current balance in the Court gives this suit a chance that it wouldn't have had last year.

May 8, 2016

swell: Yes, and if the Democrats win the presidency, and the Senate isn't too cockeyed, there is even more of a chance. Best, Don Bauder

May 8, 2016

Hmmmm, corrupt banks + corrupt bankers/lenders + politicians + money what could go wrong?

May 9, 2016

AlexClarke: Something went very, very wrong from late 2007 to early 2009. Best, Don Bauder

May 9, 2016

I think the "revolving door" between private sector and public sector is a big problem. Right now I think it would be a difficult decision for any really talented financial investigators or attorneys to decide to stay for a long time working at an SEC career.

When a highly talented SEC attorney or accountant struggling to make ends meet on a sub-200k salary while working in Manhattan sees his/her peers in the private sector making high 6 figure salaries or more then eventually they will likely leave the SEC for the private sector.

Perhaps the SEC should have the ability to offer more competitive compensation to talented investigators and attorneys - and combine that with some restrictions on switching back and forth. Perhaps if the SEC could offer combinations of pay / benefits in the high 6 figures combined with agreements to not switch back to private sector for several years they could get some of the most talented financial and legal minds to stay on the public side more.

May 10, 2016

ImJustABill: In many cases it's seven figure salaries for lawyers in white shoe firms, and you will find some eight-figure compensation figures. The SEC won't give high salaries to attorneys as long as Congress, slipped money under the table by Wall Street lobbyists, makes sure the SEC doesn't get enough money to investigate Wall Street adequately. Best, Don Bauder

May 10, 2016

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If there is one thing that is generally accepted about the 2008 bailout of the banking system, it's that the big banks put up fraudulent mortgages as collateral for the federal government's bailout money. Two highly publicized lawsuits have established that the collateral was fraudulent.

So, in 2010, Nancy and Derek Casady filed a suit in district court against the big insurance conglomerate American International Group (AIG), Goldman Sachs, Societe Generale, Deutsche Bank, and Merrill Lynch, now part of Bank of America.

District court ruled the Casadys did not have standing to sue in that forum. So the Casadys appealed to the Ninth Circuit United States Court of Appeals. On Thursday (May 5), the appellate court threw out the suit without issuing an opinion.

"They sidestepped it," says attorney Mike Aguirre, who, along with his partner Maria Severson, represented the Casadys in the name of the United States government. The Casadys were not asking for damages for themselves. They wanted the bailout money to be put back in the hands of the federal government.

Aguirre and Severson are now preparing to go to the United States Supreme Court. "We knew at the beginning it would have to go to the Supreme Court."

One famous case was filed by Maurice (Hank) Greenberg, former chief executive of AIG. He claimed the bailout was unfair. Greenberg won the suit but got no monetary award. That case established that the mortgages used as collateral were toxic.

"That no bankers have been held accountable in court or by prosecution is our government's and our courts' failure, as recently mocked in the movie The Big Short," says Severson. "We are hoping the Supreme Court gives it the attention it is due."

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Comments
6

The current balance in the Court gives this suit a chance that it wouldn't have had last year.

May 8, 2016

swell: Yes, and if the Democrats win the presidency, and the Senate isn't too cockeyed, there is even more of a chance. Best, Don Bauder

May 8, 2016

Hmmmm, corrupt banks + corrupt bankers/lenders + politicians + money what could go wrong?

May 9, 2016

AlexClarke: Something went very, very wrong from late 2007 to early 2009. Best, Don Bauder

May 9, 2016

I think the "revolving door" between private sector and public sector is a big problem. Right now I think it would be a difficult decision for any really talented financial investigators or attorneys to decide to stay for a long time working at an SEC career.

When a highly talented SEC attorney or accountant struggling to make ends meet on a sub-200k salary while working in Manhattan sees his/her peers in the private sector making high 6 figure salaries or more then eventually they will likely leave the SEC for the private sector.

Perhaps the SEC should have the ability to offer more competitive compensation to talented investigators and attorneys - and combine that with some restrictions on switching back and forth. Perhaps if the SEC could offer combinations of pay / benefits in the high 6 figures combined with agreements to not switch back to private sector for several years they could get some of the most talented financial and legal minds to stay on the public side more.

May 10, 2016

ImJustABill: In many cases it's seven figure salaries for lawyers in white shoe firms, and you will find some eight-figure compensation figures. The SEC won't give high salaries to attorneys as long as Congress, slipped money under the table by Wall Street lobbyists, makes sure the SEC doesn't get enough money to investigate Wall Street adequately. Best, Don Bauder

May 10, 2016

Sign in to comment

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