With the “Occupy Wall Street” movement in full swing, people are protesting the power that major banks and multinational corporations have over the democratic process. Protesters maintain that Wall Street played a huge role in creating an economic collapse that has caused the greatest recession in generations.
It appears that perhaps their theories are not too far off, as evidenced by the charges brought against former executives of Fannie Mae and Freddie Mac by the Securities & Exchange Commission. From CNN Money,
The suit claims that the executives knowingly approved of misleading statements, downplayed the size of their holdings of subprime loans and falsely claimed that their risky investments were minimal and manageable.
“Fannie Mae and Freddie Mac executives told the world that their subprime exposure was substantially smaller than it really was,” SEC enforcement chief Robert Khuzami said in a statement. “These material misstatements occurred during a time of acute investor interest in financial institutions’ exposure to subprime loans, and misled the market about the amount of risk on the company’s books.”
While I would never wish trouble on anyone, when someone commits fraud they should face consequences. Not only should regular people be watching the outcome, but I anticipate the world will watch as well.