Financial fraud has been present since before the Industrial Revolution, many cases making a long

A decade ago the Lehman Brothers were the fourth largest investment bank in America. Dealing with Investment banking and investment management, the Lehman Brothers was one of the largest global financial service providers. Consequently, the subprime mortgage crisis left the company filing for the declaration of the chapter 11 bankruptcy protections, due to the unnecessary undertaken risk and obnoxious negligence accusations directed towards the group. Companies should utilize observational and analytical pundit functions in identifying the presence of crisis situations to avoid an economic downturn in the business (Pontell, 2014). The fraud would have prevented through stronger and better internal controls, which

I believe that the behaviors of the Ford, Firestone, and the financial corporations on Wall Street were considered criminal behaviors. There was sufficient evidence against these corporations. Apparently, the prosecutors could not prove criminal intent in their behaviors; however, in the case of the financial institutions on Wall Street, you cannot have millions of loans bought and sold that clearly do not meet the standards of a “good loan”. Additionally, it seems utterly irresponsible for the executive banking institutions to not be aware of these loans not meeting the standards for all of the years they were being bought and sold. I believe knowing this information proves criminal intent because no further action there was taken to prevent these loans from being bought and sold without regulation.

Bank of America Corp employees have alleged that the bank deliberately denied eligible home owners

Mortgage fraud is one of the costliest, yet seldom prosecuted crimes in the criminal world. CoreLogic estimates approximately $13 billion in fraud losses occurred in 2012, according to the latest available data in the 2012 Mortgage Fraud Trends Report (Gerding, 2013). While these numbers may seem high, the approximate $13 billion in losses is only a fraction of what it would be if every case were to be prosecuted. Mortgage fraud was also a major contributing factor towards a national, and nearly global economic collapse in 2008 when the United States economy saw the worst recession it has seen since the great depression. Anyone that has seen the films “99 homes” starring Andrew Garfield and Michael Shannon or “The Big Short” starring Christian Bale and Ryan Gosling has seen a largely realistic glimpse of mortgage fraud and how devastating it can be.

They never realized that they were using their home as collateral or that the documents were applications to secure equity loans, line of credits, and modifications. It was proven that many could not read or write. Nevertheless, the banks were able to move forward with the foreclosures and the victims lost their home to either the bank or the contractors. Despite the clear demonstration of criminal activity, no arrests were made and very few consequences directed toward those licensed to uphold the highest standards and to protect the consumer. The fraud and abuse was so widespread throughout the entire real estate industry. Mortgage and real estate brokers, roofers, contractors, surveyors, inspectors, and bankers; there was definitely enough blame to go around.

In 2007-2008 the US went into a recession, a financial crisis that has since then taken five years to rebuild. During that time millions of Americans were unemployed and faced many economic struggles which negatively impacted the real estate market causing a multitude of foreclosures. The reason for this recession was because there was no authority over banks and they were not being monitored properly. Banks were able to gamble with the finances of millions of people with no consequences towards their actions. The Dodd Frank Act Wall Street Reform and Consumer Protection Act of 2010 was put into place to make sure that nothing like this ever happened again; The Dodd Frank Act implemented and set laws into place to make sure that banks and financial

Michael Hudson tells the stories of victims with many compelling storied who were tricked into signing up for risky high-cost loans, as well as the greedy lenders who scarified the lives of their victims to gain as much money and power as they could. Hudson begins his story with an explanation of deregulation and the resulting emergence of subprime mortgage lending firms in California. Roland Arnall was a pioneer of the S&L industry, and Hudson traces how Arnall’s lending operations grew into the nation’s biggest subprime lending empire, Ameriquest.

Recently, Wells Fargo was fined $185 million for opening up nearly 2 million accounts without permission of the account owners. The pressure to raise the average number of accounts began as early as 2009, employees who did not meet the sales targets were fired. Wells Fargo overlooked the fraud committed in order to meet those numbers. Since the exposure, Wells Fargo has fired roughly 5,300 employees. Though the effects on Wells Fargo go beyond the fine, this example shows how large banks and businesses are able to commit crimes without any real punishment. The Wells Fargo scheme was explicitly illegal, yet there are many business practices that, though unethical, are legal.

In 2008, Bank of America purchased Countrywide Financial, a mortgage lender based in California. Shortly after this acquisition, information came out that employee Rene Rebollo had slowly been downloading information about clients onto thumb drives and selling them to other mortgage companies’ employees. Information stolen included customer files, many with social security numbers and other personal forms of identification (Reckard 2011). Millions of customers were compromised in this breach, and the costs for Bank of America and Rebollo were high.

Bank of America is one of the largest banks in the nation. It is a multinational company and it is recognized by its high revenue value. Unfortunately, Bank of America has endured many complaints and harsh views regarding their lack of ethics. Ethical issues occur when there is a blatant disregard to implement integrity, trust, and responsibility. In some financial institutions, ethical matters are displayed in the way the consumers are treated. Within the past nine years, Bank of America has diminished all of their ethical promises by revealing customer information without their permission; discriminating against consumers based on their race; and manipulating overdraft fees in order to benefit the bank. In order to assess these problems, it is vital to recognize what Bank of America claims to stand for and determine where their most concerning issues are generated from.

Lopez, Linette. “Bank of America/Countrywide To Pay $335 Million For Predatory Lending Practices Against African American And Latino Borrowers.” 21 December 2011. Web.

These bankers and investors knowingly caused one of the worst economic recessions in American history and they were barely punished for

In September of 2016, it was revealed that there was alleged misconduct at one of the largest and safest banking institutions in the United States. Wells Fargo Bank was ranked among the nation’s safest financial institutions according to an analysis done by Global Financial, (Inside Tucson Business, 2009). Alleging that between May 2011 and July 2015, there were more than 2 million bank accounts or credit cards opened for customers without their knowledge or permission (Blake, 2016). Clients started complaining the they were receiving debit/credit cards from the bank that they had not ordered. Wells Fargo employees also started complaining that about the unethical behaviors they witnessed or were asked to participate in to the Human Resource Departments, the bank’s internal ethics hotline, branch’s individual managers and supervisors. All which led to the discovery of the fraud scandal.

On April 21, 2001, Lee Farkas, the former chairman of a private mortgage lending company, Taylor, Bean, & Whitaker (TBW), was convicted for his role in a more than $2.9 billion fraud scheme (Schoenberg, 2011). This action contributed to the failures of Colonial Bank, one of the 25 largest banks in the United States, and TBW, one of the largest privately held mortgage lending companies in the United States. According to court documents and evidence presented at the trial, Farkas and his co-conspirators engaged in a scheme that misappropriated more than $1.4 billion from Colonial Bank’s Mortgage Warehouse Lending division and

This work will examine the case 'Banking Industry Meltdown: The Ethical Financial Risk Derivatives" and determine which moral philosophy is most applicable to an understanding of the banking industry meltdown and explain the rationale. The case study will be analyzed and white-collar crimes considered as to whether they are different in any substantive manner from other more blue-collar crimes. This study will determine and discuss the role that corporate culture played in banking industry scenario and the response will be supported with specific examples. This work will postulate how leaders within the banking industry could have used their influence to avert the industry meltdown.