Law professor Donald Langevoort at Georgetown University warns against downplaying the newly launched investigation of eight world leading banks to find out whether they have provided misleading information to credit-rating companies. Langevoort says all cases have the potential to cost the banks a substantial amount of money.
“The fire is there. There’s going to be multi-hundred dollar settlements in order to get rid of them.”
The New York Attorney General Andrew M. Cuomo have launched investigations of eight major global banks because of mortgage ratings concerns. The Attorney General is trying to find out what kind of information the bank was disclosing and giving to the rating agencies, and whether or not the ratings were too optimistic.
Many of the banks are already in trouble and under scrutiny which has led to heightened protests for finance reform.
In addition to this new investigation of mortgage ratings, separate probes have been launched against rating agencies and financial firms on suspicion of market manipulation and misleading information.
RTpretty much sums it up:
Multi-Hundred Dollar Settlements
Law professor Donald Langevoort at Georgetown University warns against downplaying these investigation, saying that all the cases have potential to hurt the banks and that huge settlements between the banks and the authorities probably is the most likely outcome.
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