The Securities Arbitration Law Firm of Klayman & Toskes Comments on the Financial Crisis Inquiry Commission’s Report on the Financial Crisis

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					The Securities Arbitration Law Firm of Klayman
& Toskes Comments on the Financial Crisis
Inquiry Commission’s Report on the Financial
Crisis
February 25, 2011 02:07 PM Eastern Time 

NEW YORK--(EON: Enhanced Online News)--In late January, the Federal Crisis Inquiry Commission (“FCIC”)
released a 633 page report which contained its findings and conclusions on the causes of the Great Recession. Not
surprisingly, the FCIC concluded that the financial crisis was avoidable. In addition, it concluded that “there was a
systemic breakdown in accountability and ethics.” Among its many findings, the report documents that “major
financial institutions ineffectively sampled loans they were purchasing to package and sell to investors. They knew a
significant percentage of the sampled loans did not meet their own underwriting standards or those of the originators.
Nonetheless, they sold those securities to investors. The Commission’s review of many prospectuses provided to
investors found that this critical information was not disclosed.” There was an “erosion of standards of ethics and
responsibility,” the report found, resulting “not only in significant financial consequences but also in damage to the
trust of investors, businesses, and the public in the financial system.” 

According to Lawrence L. Klayman of Klayman & Toskes, “In my opinion, what the FCIC found is really nothing
new. It’s the old problem of disclosure, dishonesty and lax supervision. At the end of the day, the regulators need to
focus on uprooting the conflicts of interest which saturate the system. I’ve been in the trenches for the past 17 years
doing battle against brokerage firms on behalf of investors because the regulators didn’t do their job.” Unfortunately,
history tends to repeat itself. Mr. Klayman added, “The ‘33 and ‘34 Acts were put in place over 75 years ago, and
we still experience these types of problems. We need to ask ourselves why that is the case. Look what happened 
with Enron, WorldCom and the conflicts of interest which prevailed in the investment banking and research
departments at major Wall Street brokerage firms. In response, Congress created Sarbanes-Oxley, and yet it was
unable to prevent the insolvencies and accounting shortfalls in companies such as Lehman Brothers, AIG, Bear
Sterns, and Merrill Lynch. Now we have the Dodd-Frank Act, but sadly it won’t stop the next fraud which is most
likely just around the corner. Our legislators can create bill after bill, but unless you force the wrongdoers to pay 
harsher penalties and fines, we are going to see this conduct again.” 

Equally concerning, late last week it was reported that federal prosecutors have dropped their criminal investigation
of a CEO of a major financial institution, even though evidence suggests that the firm knowingly sold bad loans. This
decision by prosecutors, and the failure to prosecute those responsible for contributing to the financial crisis, is
worrisome, to say the least, and removes the deterrents which could help stop wrongful conduct in the future.
Lawrence L. Klayman added, “Those responsible for the crisis should be held accountable and tried before a jury of
their peers in the courtroom. The dropping of the investigation is not shocking as the lack of accountability is a never-
ending cycle.” 

The attorneys at Klayman & Toskes are dedicated to pursuing claims on behalf of investors who have suffered
investment losses. Klayman & Toskes, an experienced, qualified, and nationally recognized securities litigation law
firm, practices exclusively in the field of securities arbitration and litigation. It continues its representation of investors 
throughout the world in securities arbitration and litigation matters against major Wall Street brokerage firms. If you
wish to discuss this announcement, please contact Lawrence L. Klayman, toll free, at 888-997-9956. You may also
visit us on the web at www.nasd-law.com.

Contacts
Klayman & Toskes, P.A.
Lawrence L. Klayman, 888-997-9956
www.nasd-law.com.

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Description: NEW YORK--(EON: Enhanced Online News)--In late January, the Federal Crisis Inquiry Commission (“FCIC”) released a 633 page report which contained its findings and conclusions on the causes of the Great Recession. Not surprisingly, the FCIC concluded that the financial crisis was avoidable. In addition, it concluded that “there was a systemic breakdown in accountability and ethics.” Among its many findings, the report documents that “major financial institutions ineffectively sampled loans they w a st
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