The Cost of Doing Business

2 Sep

It came out this week that the legal fees for the largest banks in the US will exceed $100B. That was only a portion of the $700B provided to these large banks in 2008.

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In the Quarterly Report to Congress from the Special Inspector General for TARP, the current obligation on that money stands at $456B. This “Special Inspector General” is also responsible for all litigation with regards to the TARP bailout.

It is interesting to see all of the litigation listed in this report. Of special note is that of all (107 convictions) the people prosecuted, it appeared that none of them worked for these big banks. They were what one might call small potatoes. Of the 51 listed in the report, all (with reported employers) came from one of the companies listed below :

American Mortgage Mount Vernon Money Center
Appalachian Community Bank Nations Housing Modification Center
BBR Group, LLC Network Funding
C&C Holdings, LLC New Point Financial
Colonial Bank Omni National Bank
Compliance Audit Solutions Inc. Orion Bank
First Community Bank Oxford Collection Agency
FirstCity Bank ProTrust Management, Inc.
Friends Investment Group Taylor, Bean & Whitaker
Galleria USA, Inc. Team Management, LLC
Home Front, Inc. The Shmuckler Group, LLC
Mortgage Solutions Specialists Timelender

A separate report from SIGTARP does list Bank of America as one of the companies prosecuted, and working up the economic ladder, there was Angelo Mozilo, head of Countrywide, who sold BofA $40B of toxic assets, who avoided any criminal prosecution.

This $100B cost of doing business seems like a bargain.

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