“The penalty the U.S. government just levied on one of the highest ranking former officials of Fannie Mae wouldn’t even buy a used Volkswagen diesel Sportwagen.
“On Monday afternoon, Thomas Lund settled charges brought by the Securities and Exchange Commission back in 2011 that he helped deceive shareholders of Fannie Mae in the run-up to the financial crisis. Fannie had to be rescued by the government in early September 2008, and many see the giant mortgage insurer’s misconduct as one of the main contributors to the meltdown. The suit claimed that Lund, who was the head of Fannie’s single-family division, helped hide more than $100 billion of subprime exposure from Fannie’s shareholders, allowing it to continue to back more and more risky loans.”
“Still, the SEC has been trying to fight criticism that it let financial executives who were responsible for the crisis off the hook. These latest Fannie settlements won’t help, however. “This case is more PR spin and baloney rather than real enforcement that will have any affect on the conduct of people in the financial markets,” says Dennis Kelleher, who heads Better Markets, a non-profit that supports more reform of Wall Street.”
Read the full Fortune article by Stephen Gandel here.