For years, Wall Street sympathizers have defended actions of bankers in the lead-up to the collapse of the housing market and subsequent financial crisis.
While many practices within the financial industry have drawn criticism, under special scrutiny was the practice of packaging shoddy mortgages and then selling them to unsuspecting investors prior to 2008. Some have danced around bank’s liability, with many suggesting it was in fact the fault of consumers, who took on loans far in excess of what they could afford.
But in a recent decision that spanned more than 360 pages, a federal judge issued a scathing assessment of bankers’ actions that directly conflicts with their version of history.
The ruling, against the Royal Bank of Scotland and Nomura Holdings, a Japanese financial firm, was part of a government case that started with 18 defendant banks over deceptive loans. All other defendants settled the claims out-of-court before they went to trial. Those included Bank of America and Goldman Sachs, which collectively shelled out $18 billion. In so doing, they avoided the public delving into their dealings prior to the crisis.
Judge Denise L. Cote of the Federal District Court of Manhattan, ruled the scope of the lies – even when conservatively measured – is “enormous.”