Wednesday, June 17, 2009
OTS Ignores Fraud
"High-level Office of Thrift Supervision officials played a direct role in allowing thrifts to inappropriately backdate capital contributions, federal inspectors said Thursday, even though such moves allowed firms to report misleading financial results. ... In two cases, including IndyMac Bank, which later failed, OTS management specifically directed or authorized the backdating. ... In three further cases, the agency allowed a thrift's backdating to remain after discovering it. ... In only one of the six cases did the OTS direct the thrift to reverse the transaction", my emphasis, Michael Crittenden at the WSJ, 22 May 2009.
When would backdating be appropriate? Were any of these thrifts audited? Did their CPAs find this? If not, why not? Did these transactions violate the books and records provisions of the Foreign Corrupt Practices Act? Will anyone get indicted over this? IndyMac was audited. Its last filed proxy showed it paid E&Y $6.2 million in 2007. Well, E&Y, what did you look at?