Alayne Fleischmann is a lawyer who ended up working in securities law. She eventually started working at Chase bank. For a few months, all was well and she enjoyed it. Then she noticed a strange change that really raised a red flag for her. The boss started telling them to not send him emails. The obvious reason was to keep things secret.
But why would he want them to keep the details about securities loans secretive and untraceable?
After some research, she noticed that Chase was buying bad loans, known in the business as “scratch and dent” loans. These are loans defaulted by people who missed too many payments which made the loans less than desirable. Chase was re-selling these bad loans as securities. Then the market crashed, which was foreseen by the banks and the reason for them dumping all their bad loans onto unsuspecting securities purchasers. Fleischmann blew the whistle on them, though it did little good in actuality.
Obama made a show of punishing them with prosecution and large fines. But in my opinion and that of Bruce Karatz, this was not even a slap on the wrist due to the vague wording of the settlement among other things. $11 of the $34 billion fine was basically paid by tax payers. 7,500 lower-level employees were laid off to recoup most of the rest of the fine. Thanks corrupt Department of Justice.