New York attorney general leads investigation into Wall Street banks
Share Now on:
New York Attorney General Andrew Cuomo is investigating whether eight Wall Street banks misled rating agencies in the latest of a string of federal inquiries into the practices of leading financial institutions.
The attorney general will pursue the inquiry by first exploring how the credit agencies earned money. Agencies were paid by the banks to grade their securities. The investigation will also delve into the relationship between the banks and the rating companies. Dean Baker with the Center for Economic and Policy Research says banks were prone to hiring employees from big-name rating agencies. “The banks could pay someone much more than Standard & Poor’s or Moody’s would pay them,” he said. Baker noted there should be a cooling-off period before a rating agency worker can go to work for a bank.
Although likely to be a prominent case, this investigation isn’t directly connected to the SEC’s recent civil charges against Goldman Sachs. Criminal accusations continue against banks like JP Morgan, Citigroup and Deutsche Bank for betting against mortgages sold to customers.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.