The Securities and Exchange Commission recently released a roundup of its financial crisis enforcement actions, highlighting some of the more than 150 firms and individuals the agency has levied charges against since 2008. The actions so far have resulted in $2.6 billion returned to investors.
The SEC released its roundup of actions—which, of course, include many related to the mortgage crisis—just as the Consumer Financial Protection Bureau released a bevy of new mortgage rules. Between Jan. 10 and Jan. 18, the CFPB issued new rules to protect consumers from irresponsible mortgage lending, rules that establish strong protections for homeowners facing foreclosure, a final rule on appraisals for high-priced mortgages, and rules to prevent loan originators from steering consumers into risky mortgages.
Among the firms charged were advisors' partners, like Charles Schwab and Morgan Keegan.
Read on for a listing of the four biggest penalites to firms charged for violations in the following four areas:
1) concealing from investors risks, terms and improper pricing in CDOs and other complex structured products; 2) making misleading disclosures to investors about mortgage-related risks and disclosures; 3) concealing the extent of risky mortgage-related and other investments in mutual funds and other financial products; and 4) the always-mysterious "Other" category.
Concealed from investors risks, terms and improper pricing in CDOs and other complex structured products
1) Goldman Sachs: In April 2010, the SEC charged the firm with defrauding investors by misstating and omitting key facts about a financial product tied to subprime mortgages as the U.S. housing market was beginning to falter. Goldman agreed to pay a record $550 million settlement and reform its business practices. (7/15/10)
2) Citigroup: SEC charged Citigroup's principal U.S. broker-dealer subsidiary with misleading investors about a $1 billion CDO tied to the housing market in which Citigroup bet against investors as the housing market showed signs of distress. The proposed settlement would require a payment of $285 million by Citigroup that would be returned to harmed investors. (10/19/11)
3) J.P. Morgan Securities: SEC charged the firm with misleading investors in a complex mortgage securities transaction just as the housing market was starting to plummet. J.P. Morgan agreed to pay $153.6 million in a settlement that enables harmed investors to receive all their money back. (6/21/11)
4) Mizuho Securities USA: SEC charged the U.S. subsidiary of Japan-based Mizuho Financial Group and three former employees with misleading investors in a CDO by using "dummy assets" to inflate the deal's credit ratings while the housing market was showing signs of severe stress. The SEC also charged the deal's collateral manager and portfolio manager. Mizuho agreed to pay $127.5 million to settle the charges, and the others also agreed to settlements. (7/18/12)
Made misleading disclosures to investors about mortgage-related risks and disclosures
5) J.P. Morgan Securities: SEC charged the firm with misleading investors in offerings of residential mortgage-backed securities. J.P. Morgan Securities agreed to pay $296.9 million to settle the SEC's charges. (11/16/12)
6) Credit Suisse Securities (USA): SEC charged the firm with misleading investors in offerings of residential mortgage-backed securities. Credit Suisse agreed to pay $120 million to settle the SEC's charges. (11/16/12)
Concealed the extent of risky mortgage-related and other investments in mutual funds and other financial products 
Other
