The Divide: American Injustice in the Age of the Wealth Gap Highlight

By the time all these companies were finished first inflating and then crashing a huge global asset bubble based on overvalued mortgages, the world had lost trillions of dollars—one extremely conservative estimate by the IMF put the losses at $4 trillion. But despite having been warned about the possibility of widespread mortgage fraud by the FBI as early as 2004, financial cops in regulatory agencies like the SEC and the OCC didn’t respond to the problem at all until well after the crash. When they finally did respond, they did so by bringing civil suits against companies like Countrywide, JPMorgan Chase, Bank of America, Wachovia, TD Ameritrade, Goldman Sachs, Charles Schwab, and others. In the twenty-one biggest federal settlements over mortgage fraud abuses—$300 million from State Street for lying to investors, $153 million from Chase in the Magnetar settlement, and so on—those companies and a few others paid a total of $26 billion in damages to the government. In every single one of those cases, the relevant companies were allowed to settle without admitting wrongdoing. Not a single individual was charged in any of those cases. Not a single individual had to pay so much as a dime of his own money in damages.