�Large corporations have been managing retirement plans for decades.How often do you have an executive chairman of a bank while his relative is the head of the subsidiary investment company owned by that same bank? An example of something that might be construed as unethical practices.... The bank makes sub-prime loans that are funded with investments offered to employees(allocated 401k monies) and managed by the subsidiary investment company. While employees contributed significantly to the sub-prime lending for their own company it was without clear understanding the ramifications of exactly what that meant. .. If both parties (chairman of bank and investment head) receive bonuses and perks tied to these transactions how do you know they are acting in the best interest of the employees as well as any stockholders? During this time the named bank also owns a sub-prime lending company and decides to sell it to an investment bank. During the due diligence for this transaction a substantial degree of miss reported losses surfaced which in turn inflated the bottom line income for previous years. Resulted in a huge write down on asking price. During this time huge bonuses due to the income that was misreported during that time was paid out to the key people named. ..I do not suppose that they have been made accountable for the funds they received that were largely due to misreporting losses and inflating the income/profit The chairman of the bank was signing signing off on the SEC filings while his relative was funding the sub-prime company through the direct funds he received from the named banks employees and stockholders for investments . Employee 401k's and the stockholders are taking the hits for these greedy decisions.
Recently an audit was performed and it was discovered that our merger partner had also been misreporting 90 day past due loans which again distorted their bottom line.. That may be why the 42% increase in bad loans this quarter That is your real answer to where many of those out of the blue "to pursue other opportunities" came from. .After all its a game of accountability...just so long as it falls below the top.
This demonstrates that the U.S. financial reporting system is broke. Accountants have so comprised the integrity of their profession that there is little reason to believe any financial reports filed with the Securities and Exchange Commission. Conflicts of interest in accounting have corrupted audit standards. Too often this is the tool of choice for greedy businessmen to camouflage the true financial condition of their companies. . Seems to be an unambiguous conflict of interest. The practice is contrary to the public interest and ought to be prohibited. Thank GOD for mergers because the true bottom line would probably scare us all.
That logic is rarely cited when markets are soaring. Fund managers didn't complain that they were marking the value of their assets too high, Mr. Ciesielski, the newsletter editor, says.
To see how funds have marked down their holdings, consider Regions Morgan Keegan Select High Income Fund, a high-yield mutual fund run by Birmingham, Ala.-based Regions Financial Corp. It invested $13.5 million in one bond based on a series of mortgage-backed securities issued in 2005 called Terwin Mortgage Trust. By the end of March, the fund listed the bond's value as $5.9 million, according to its most recent portfolio report to regulators.
This portion is direct copy and paste from this link in the online WSJ. Close to the very end of the article in big bold letters is where they repeat this above article.
Do you any of you know?
This investment was listed as an option for the employees that were seeking high growth. Wonder how many of the 36,000 employees actually owned this in their 401k..? Thus contributing monies to this fund.
Was this money for commercial and residential loans that were approved and funded by Region's bank?Where did the hits come from? Whose standards and policies were used in the decisions to grant this money? I heard some interesting information regarding this today and just want to know before I elaborate.
I heard through the grapevine that on the way to the surface is another multi million dollar hit in Miami. This I know was inherited from the UP side. (the ole condo project they liked so much)
The rumor floating around the Carolina's.... Barkley's considering the closing of Equifirst because of how bad the quality really is. Anyone heard this?
One more thing...read on a blog board today that Regions is getting out of the Residential lending market. Anyone heard this...?
The past dues you are speaking about came from which side? How much 401K money made up the the fund and how much was from outside investors looking for high yeild? How are the sub-prime loans funded out of employee contributions? The loans are funded from a warehouse line even if the holding company is funding the line, correct?
What about artificially reduced the losses on the books.By someone making the decision not to follow charge off policy this would have violated the company's standard accounting procedures .This also would have caused EquiFiirst to achieve the company's aggressive earnings and growth targets placed on them. The buyer of EquiFirst discovered RF sub was holding potentially millions of dollars in bad loans and subprime-related mortgage that was going to implode. Therefore the huge write-down in the purchase price. This means the numbers reporting on profits for this division for 2006 and maybe even 2005 were bad. The buried bodies or the mystery of the write-down that has never been full explained. Why ? Audit has after that been checking subs and other parts of the banks to make sure they aren't any more hidden losses that has been sandbagged and could cause meltdown. That is why you see" Regions conducted credit servicing reviews (covering all loans in excess of $3 million) during the second quarter of 2007. These reviews revealed underwriting inconsistencies in certain markets. Loans past due 90 days or more and still accruing increased 42% from year-end 2006 levels." in the SEC filing. What were the inconsistencies ? And if it is true they was with ASO , what division ?