Banks, Fraud | featured news

The former chief executive of Park Avenue Bank pleaded guilty to charges that he attempted to defraud the Troubled Asset Relief Program.

One of the US's top fraud investigators is warning that America's policing of money laundering is wide open to abuse.

Goldman Sachs Group Inc agreed to pay $550 million to settle civil fraud charges over how it marketed a subprime mortgage product, ending months of negotiations that rattled the bank's clients and investors.

Goldman Sachs CEO Lloyd Blankfein, in written testimony prepared for a Senate hearing on Tuesday, said his firm "certainly did not bet against our clients."

A Senate investigation into the financial crisis has found that Goldman Sachs, the storied Wall Street investment bank, sought to profit from the historic decline in housing prices by betting against the US mortgage market.

In a civil suit filed Friday, the S.E.C. accused the investment bank of securities fraud over a deal in which Goldman profited from bets against products it sold to customers.

Frustrated by the banks' inability or unwillingness to stop an avalanche of foreclosures, the states are considering lawsuits over the creation and marketing of millions of bad loans as well as the dismal pace of mortgage modifications.

Such cases would have been impossible until recently, because federal regulators had exclusive oversight of national banks. But a 5-to-4 Supreme Court decision in June allowed the states to exercise their own supervision, giving them significant leverage.

The former chief, Angelo R. Mozilo, is the highest-profile person to face charges in the wake of the financial crisis.

Reserve Primary Fund founder Bruce Bent Sr. was among those charged with fraud on Tuesday by securities regulators for allegedly failing to tell investors about the fund's vulnerability to Lehman Brothers' bankruptcy.

U.S. law enforcement officials found Texas billionaire Allen Stanford in the Fredericksburg, Virginia, area on Thursday, and served him with a complaint accusing him of an $8 billion fraud.