FDIC Conducting 50 Criminal Investigations Into Failed Banks

The Federal Deposit Insurance Corp (FDIC) is conducting about 50 criminal investigations at U.S. banks that have failed since the start of the financial crisis, the Wall Street Journal said.

The FDIC, which is responsible for dealing with bank failures, is probing former executives, directors and employees at failed U.S. banks and is taking efforts to punish alleged recklessness, fraud and other criminal behavior, the Journal said.

Fred Gibson, deputy inspector general at the FDIC, told the Journal in an interview that the probes involve failed banks of all sizes in cities across the U.S.

FDIC is also stepping up civil claims to recover money from former bankers at busted lenders, the newspaper said.

Gibson declined to identify the people or banks under investigation, the Journal said.

"We anticipate results from our investigations, although we cannot predict when a particular case will reach a stage at which disclosure of specifics would be appropriate," Gibson told the Journal.

FDIC could not immediately be reached for comment by Reuters outside regular U.S. business hours.

(Reporting by Sakthi Prasad in Bangalore; Editing by Muralikumar Anantharaman)

Copyright 2010 Thomson Reuters. Click for Restrictions.

Comments

[parags20]

04:34 AM on 11/22/2010

This is not all good if we are looking to strabilize our economy. Banks failing means more tough times are ahead.

http://www.financemetrics.com/save-the-banks-from-themselves/

[hrpmap]

06:34 PM on 11/18/2010

Why aren't they investigating the fed? The head fraudsters.

[rainkitty]

09:10 PM on 11/17/2010

Failed banks in the US: mapping the crisis:
"Banks are failing all over the US - it's the equivalent of $2,000 for every man, woman and child in the country in bad debt."
http://www.guardian.co.uk/news/datablog/2010/nov/02/failed-banks-map-us

[Old Claudius]

08:42 PM on 11/18/2010

Most of the banks all over the U.S. that are failing are failing for good loans made to solid and creditworthy borrowers who have been made unable to continue making their payments because they have lost their jobs and businesses that provided them the incomes that made them able to repay the loans their banks gave them.

The reason those jobs and businesses and incomes went is that the mega-finance parasites wrecked the nation's economy with their giant rip-off, fraud and Ponzi schemes.

[Old Claudius]

08:51 PM on 11/17/2010

HEY!!!

The picture with this article is showing the hand-cuff being taken OFF!!

What kind of message is that to be sending to us children?

[juliabliss]

07:01 PM on 11/17/2010

Somebody had better go to jail at the end of this...no slap-on-the wrist fines, do not pass go.

We've deported hundreds of US citizens and lawful residents because they are brown and don't speak English, but zero punishment for national theft and hijacking the economy? I thought all Americans cared about was money.

[Kimiko Austin-Rijs]

06:54 PM on 11/17/2010

At this point I would just be happy for regulation of financial institutions and allowing the Bush tax cuts to expire.

[Captain Kyrie Val Kyrie]

06:38 PM on 11/17/2010

Really, there should be an inquiry as to why Bush followed Osama Bin Laden's orders to deregulate the banks, so Osama could make them go bankrupt.

[InfidelSix]

04:36 PM on 11/17/2010

Please, Please.
Punish Corruption and Greed.

[evalela]

04:21 PM on 11/17/2010

Big deal this is what will happen no one will go to jail or prison,instead they'll get a hefty fine(A Bribe) to be paid to the FDIC and buisness will go on as usual! We average everyday American will not benefit one iota, it's all just for show!!!!

[banker67]

05:15 PM on 11/17/2010

I hope you're wrong. I really do.
Still, I find just the headline refreshing after a decade of GOP fraud and non-regulation. I too am skeptical that anyone with more than half a million in any account will go to jail or even pay a fine with his/her own personal dough.
It may happen, but I can't imagine it except in Bernie's case. I suspect he burned some very powerful people. Still, I doubt his personal fortune -- now controlled by his family -- dropped even a hair's breadth under the category of astronomical.
What's a fine of $10 billion if you get to keep the 11th billion forever?
I've never met anyone who would not leap at a bargain like that.
Bernie might have hesitated if he'd really thought he'd wind up in jail, but I'm sure he never seriously believed anyone could touch him.
Only the entirely realistic threat of complete financial ruin and many years behind bars will deter the hundreds of thousands of wanna-be Bernies, competing ferociously every single day to be hired by every major financial firm on earth.

[givesflack]

03:41 PM on 11/17/2010

An interesting article related to this one about how most of the Community Reinvestment Act banks related loans account for only 6% f all the total loans made during the Sub Prime Mortgage meltdown that led to the financial crisis. So that leaves out all the trolls in this discussion as well as most of the Right Wing media, FOX etal. So that just leaves us responsible ones who believe banks need to start lending again to jump start the economy, a precondition to TARP bailouts who have all reneged on that agreement section, and need to do so by the guidelines under the CRA- open honest clean and tranparent lending to the American people and their communities.
http://www.huffingtonpost.com/richard-h-neiman/financing-the-economic-re_b_784921.html

[OldTulsan]

06:26 PM on 11/17/2010

http://www.federalreserve.gov/newsevents/speech/kroszner20081203a.htm
FRB: Speech--Kroszner, The Community Reinvestment Act and the Recent Mortgage Crisis

"...Putting together these facts provides a striking result: Only 6 percent of all the higher-priced loans were extended by CRA-covered lenders to lower-income borrowers or neighborhoods in their CRA assessment areas, the local geographies that are the primary focus for CRA evaluation purposes. This result undermines the assertion by critics of the potential for a substantial role for the CRA in the subprime crisis. In other words, the very small share of all higher-priced loan originations that can reasonably be attributed to the CRA makes it hard to imagine how this law could have contributed in any meaningful way to the current subprime crisis..."

[stevebeast]

03:30 PM on 11/17/2010

uh huh

[vinny]

03:37 PM on 11/17/2010

couldn't have said it better.

[SangZe]

03:20 PM on 11/17/2010

A report will be issued in 2050.

[LaPlacaRifa48691]

03:15 PM on 11/17/2010

Good for a start.
After the first fifty face The Iron Hand Of Justice, then we should keep the ball rolling and throw plenty of fear into Citi, JP, BofA, and WF!
Because they do know that it's later than they realize!
And giving the fifty worst offenders (as in the CEOs, CFOs, and other executives of those 50 banks) time in Allenwood Federal Prison, to me, would be a doggone good harbinger in this case,
--RKJ

[vippy]

02:46 PM on 11/17/2010

Oh yes, smoke and mirrors, what else?  Start by checking into the too big to fail banks and leave the little ones alone. 

[eilish]

02:45 PM on 11/17/2010

This just flabbergasts me. Punish those who failed? Um, seems to me that the Big 6 would see to that themselves so aren't we after the wrong dog?