SIGTARP Investigates Possible Book-Cooking!
by Adam Hughes*, 4/13/2009
The Special Inspector General for TARP has begun investigations into whether some banks altered their accounting records and balance sheets in order to appear "fundamentally sound," the Financial Times is reporting this morning. Banks must demonstrate they are "fundamentally sound" before they can qualify for TARP funds from the government.
There appear to be multiple types of fraud involved, one that Special Inspector General for TARP Neil Barofsky focused on was the actions of the credit rating agencies:
We know the triple A rating [ascribed to the securities by credit rating agencies] was a sham. We could be buying securities that are backed with assets that we know were likely riddled with fraud.
Mr. Barofsky revealed at a Congressional hearing earlier this month that he was involved with “probably more than a dozen” investigations into possible wrongdoing and fraud. He told the FT that potential fraudsters would pay attention when his team began seeking indictments. “Indictments can serve as great deterrents,” he said.
It isn't clear what crimes these banks may have committed, but Barofsky said that securities fraud, wire fraud and false statements were all possibilities.
Financial Times: TARP investigator seeks evidence of book fiddling
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