Three "Ernst" directors out (okay, that was an election).
New auditor in, CFO out (spooky).
Director and former CEO leaves for "health reasons" (that could be anything, eh?).
CEO, president and chairman leaves (Ernst 'imself).
Now Breeden says it may take a while to get out of Option One, because he wants to do it orderly-like.
It doesn't sound to me as if exiting Option One is as simple as closing the doors. Maybe a lot of those subprime mortgages that got sold the same day they were originated were sold to HRB Bank as investments?
I take them at their word that all this off balance sheet activity is on the up and up and the selling of those mortgages was legit., but when Breeden was in such a dad gummed hurry to shut down financial services and now he can't estimate a timeline, I think HRB is more tangled up than I'd been led to believe.
Well, after "earnings" come out and they write down certain "items", it's a brand new day, innit? As long as they have the confidence of investors and all that. Enron, Global Crossing, General Motors. Yeah, the whole U. S. stock market has a credibility problem, and that's a sad thing, because a lot of Saudis and Indians and Chinese who hold a lot of our Dollars have got to be scratching their heads trying to figure out where to put all that money, and we'd better hope it's not in India stocks and China stocks and Iran stocks and Brazil stocks and gold bullion and euros.
<<Maybe a lot of those subprime mortgages that got sold the same day they were originated were sold to HRB Bank as investments?>>
The federal judges are starting to notice things like that, and are blocking foreclosures of properties that investors don't "own." This article says (among other things) that mortgage-backed securities may be "mortgage backed" in name only. Good for them!!!!!
Ernst and CFO quit, so they don't have to sign off on the numbers under Sarbanes Oxley...Breeden's guy has to. What a tangled web they have woven. If they mark to true market it will be a significant event and survival will be questioned. If they soften the blow they could be the next in line for a shareholder class action when the eventual writedowns hit. This is no quick fix for Breeden and he is now in charge of damage control. He's met his match imho.
It would definitely be ironic if the former SEC guru finds himself the target of a shareholder suit.