Well, I suppose it's got an excuse, as it's been fumbling around the basement getting its books and records together, but the SEC has finally caught up with the plaintiffs' firms.
Finally -- finally -- the SEC is launching a securities fraud investigation into the banking industries' disclosures (or misdisclosures) regarding the mortgage-backed securities they were selling everyone.
The funny thing is, most of the folks complaining about fraud are the big sophisticated type. Freddie Mac, Allstate, and the NY Fed Reserve, for example, going after BofA.
Given all the short-selling and CDS involved, one might wonder whether some of this is just a childish tattletale. One sibling fingering the blame at the other when both are culpable. Undoubtedly, this suspicion will be presented as a defense. Still, bad behavior is bad behavior, whether or not someone else behaved badly, too.
So, hopefully the plaintiffs' firms will make them pay. As, given the SEC's wet-noodle-treatment of Goldman, the government isn't likely to.
