” ‘The defendants’ fraudulent misrepresentations and bait-and-switch tactics saddled investors with unknown risks they did not bargain for,” U.S. Attorney Benton Campbell said in announcing the case against the former Credit Suisse Securities brokers.
“In reality, the securities were backed by subprime mortgages, collateralized debt obligations and other high-risk investments, the authorities said. Because of their higher risk, they brought a higher yield and much larger commissions for the brokers.” [NYT][HW]
Trust and confidence are the name of the game, and a little more erosion just occurred. It is true that in the housing markets this is still(!) going on via unchecked fraud (buyers, sellers, mortgage brokers, appraisers, realtwhores- everybody wants to get in on the act), and in finance (“Wall St.”) by guys just like these.
They work for well known organizations, under the cover of legitimate business, often for well known organizations. Because arrests like these are rare, the public has no idea what’s going on, to what extent (shhhh!).
Who knows how deep the river runs, how many books are being juggled, who is being sacrificed on the alter of the big bonus.
