On Monday, the U.S. Department of Justice charged Paul Mangione, a former subprime trader at Deutsche Bank, with civil fraud for conduct relating to $1.4B in securitized loans during the 2007-2009 financial crisis. The action is brought pursuant to the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA). In the Financial Times, Patrick Smith “blasted the government for filing a ‘meritless lawsuit.’” He explained in Reuters that, “The decision to sue Paul Mangione for civil penalties in this case is both wrong and unfair.” In the Wall Street Journal, Smith added, “It’s wrong because the facts show that Mr. Mangione never agreed to mislead any investor. And it’s unfair because Mr. Mangione is being singled out for blame on two ten-year old securitization transactions on which numerous other participants had more input and responsibility.”
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