1. Prosecuting Wall Street
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Two high-ranking financial whistleblowers say they tried to warn their superiors about defective and even fraudulent mortgages. So why haven't the companies or their executives been prosecuted? Steve Kroft reports.
(CBS News)
Two whistleblowers offer a rare window into the root causes of the subprime mortgage meltdown. Eileen Foster, a former senior executive at Countrywide Financial, and Richard Bowen, a former vice president at Citigroup, tell Steve Kroft the companies ignored their repeated warnings about defective, even fraudulent mortgages. The result, experts say, was a cascading wave of mortgage defaults for which virtually no high-ranking Wall Street executives have been prosecuted.
The following is a script of "Prosecuting Wall Street" which aired on Dec. 4, 2011. Steve Kroft is correspondent, James Jacoby, producer.
It's been three years since the financial crisis crippled the American economy, and much to the consternation of the general public and the demonstrators on Wall Street, there has not been a single prosecution of a high-ranking Wall Street executive or major financial firm even though fraud and financial misrepresentations played a significant role in the meltdown. We wanted to know why, so nine months ago we began looking for cases that might have prosecutorial merit. Tonight you'll hear about two of them. We begin with a woman named Eileen Foster, a senior executive at Countrywide Financial, one of the epicenters of the crisis.
Steve Kroft: Do you believe that there are people at Countrywide who belong behind bars?
Eileen Foster: Yes.
Kroft: Do you want to give me their names?
Foster: No.
Kroft: Would you give their names to a grand jury if you were asked?
Foster: Yes.
But Eileen Foster has never been asked - and never spoken to the Justice Department - even though she was Countrywide's executive vice president in charge of fraud investigations. At the height of the housing bubble, Countrywide Financial was the largest mortgage lender in the country and the loans it made were among the worst, a third ending up in foreclosure or default, many because of mortgage fraud.
It was Foster's job to monitor and investigate allegations of fraud against Countrywide employees and make sure they were reported to the board of directors and the Treasury Department.
Kroft: How much fraud was there at Countrywide?
Foster: From what I saw, the types of things I saw, it was-- it appeared systemic. It, it wasn't just one individual or two or three individuals, it was branches of individuals, it was regions of individuals.
Kroft: What you seem to be saying was it was just a way of doing business?
Foster: Yes.
In 2007, Foster sent a team to the Boston area to search several branch offices of Countrywide's subprime division - the division that lent to borrowers with poor credit. The investigators rummaged through the office's recycling bins and found evidence that Countrywide loan officers were forging and manipulating borrowers' income and asset statements to help them get loans they weren't qualified for and couldn't afford.
Foster: All of the-- the recycle bins, whenever we looked through those they were full of, you know, signatures that had been cut off of one document and put onto another and then photocopied, you know, or faxed and then the-- you know, the creation thrown-- thrown in the recycle bin.
Kroft: And the incentive for the people at Countrywide to do that was what?
2. Luxury cars likely worth $1M+ in big pileup
(AP)
TOKYO - An outing of luxury sportscar enthusiasts in Japan ended in an expensive freeway pileup — smashing a stunning eight Ferraris, a Lamborghini and two Mercedes likely worth more than $1 million together.
Police say they believe the accident Sunday was touched off when the driver of one of the Ferraris tried to change lanes and hit the median barrier. He spun across the freeway, and the other cars collided while trying to avoid hitting his car.
Video of the crash aired by NTV, a major national network, showed several smashed, bright red Ferraris cluttering the freeway.
Even a used Ferrari in Japan can fetch $100,000 or more, meaning the total damage may be $1 million or more.
Police declined to comment on the total amount of damage, but said some of the vehicles were beyond repair.
NTV quoted the driver of one of the tow trucks brought in to clear the scene as saying it was the most expensive crash site he had ever seen.
No one was seriously injured, but police in Yamaguchi prefecture said 10 people were treated for bruises and cuts. Police say 14 cars were involved altogether.
The luxury cars were all in one place because they were being driven by a group of automobile enthusiasts on their way to nearby Hiroshima.
3. NASA finding feeds talk of a new Earth
(CBS/AP)
With the discovery, the Kepler space telescope has now located 2,326 potential planets during its first 16 months of operation.
NASA has found a new planet outside Earth's solar system that is eerily similar to Earth in important aspects.
Scientists say the temperature on the surface of the planet, known as Kepler-22b, is about a comfy 72 degrees (22 Celsius). Its star could almost be a twin of Earth's sun. It probably has water and land.
It was found in the middle of the habitable zone, making it the best potential target for life. However, getting there would take some time: Kepler-22b is about 600 light years away (A light year is the distance light travels in a year, or about 6 trillion miles.)
The discovery announced Monday was made by NASA's Kepler planet-hunting telescope. This is the first time the agency has confirmed a planet outside Earth's solar system in the not-too-hot, not-too-cold habitable zone. This is the region around a star where liquid water, a requirement for life on Earth, could persist. The planet is estimated to be 2.4 times the size of Earth, which would make it the smallest found to orbit in the middle of the habitable zone of a star like our sun.
Twice before astronomers have announced planets found in that zone, but neither was as promising. One was disputed; the other is on the hot edge of the zone. Kepler 22-B is the smallest and the best positioned of the more than 500 planets found to orbit stars beyond our solar system to have liquid water on its surface -- among the ingredients necessary for life on Earth.
Comparison of our solar system to Kepler-22, a star system containing the first "habitable zone"planet.
(Credit: NASA/Ames/JPL-Caltech)
"This is a major milestone on the road to finding Earth's twin," said Douglas Hudgins, Kepler program scientist at NASA Headquarters in Washington. "Kepler's results continue to demonstrate the importance of NASA's science missions, which aim to answer some of the biggest questions about our place in the universe."
For the scientists working on the project, the confirmation of a near-Earth-size planet was the culmination of a difficult search marked by fits and starts. Although earlier research had hinted at the existence of near-Earth-size planets in the so-called habitable zones, they said that getting clear confirmation proved elusive. In February, 54 habitable zone planet candidates were first reported but Kepler-22b is the first to be confirmed.
"Fortune smiled upon us with the detection of this planet," said William Borucki, Kepler principal investigator at NASA Ames Research Center at Moffett Field, Calif.. He directed the team that discovered Kepler-22b. "The first transit was captured just three days after we declared the spacecraft operationally ready. We witnessed the defining third transit over the 2010 holiday season."
SOURCE:http://www.cbsnews.com/
Top 3 T.V. News Stories
1) A United States spy drone flying over the Afghanistan and Iran boarders has gone missing late last week. The Iranian government is claiming they have the damaged bat like stealth plane, and it is still in repairable shape. Although the Iranian government has yet to provide any concrete proof that they are in possession of the drone. The stealth, unmanned aircraft is a top secret spy device with only imaginable technology aboard it. There is a fear that if the plane has been captured, which air force officials fear, then the technology could be exposed and used. The unconfirmed suspicion is that it was gating information on the Iran nuclear sites.
2) In a related story, there was an explosion at an Iranian missile site. This is believed to be the headquarters of the missile program, which now looks destroyed. The head of the program was on site and died when the explosion occurred. Satellite images show the almost complete destruction of the site.
3) United States Post Office plans to close 50 percent of the regional processing offices, rather than closing the small local post offices it had planned to close. This reduction in the processing centers, will mean that mail will have to travel farther to reach a center and that receiving mail the next day will be thing of the past. This downsizing is expected to abolish 28,000 jobs by the end of 2012. The post offices have always paid for themselves and been run like a business, and that is the way they want to keep it. The Post office does not receive money from taxes, nor does it want to.
Source: CBS Evening News
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