The Enablers
Mar 26th, 2008 at 11:04 pm by Susie
Somehow, you just knew, didn’t you?
A sweeping five-month investigation into the collapse of one of the nation’s largest subprime lenders points a finger at a possible new culprit in the mortgage mess: the accountants.
New Century Financial, whose failure just a year ago came at the start of the credit crisis, engaged in “significant improper and imprudent practices” that were condoned and enabled by auditors at the accounting firm KPMG, according to an independent report commissioned by the Justice Department.
In its scope and detail, the 580-page report is the most comprehensive document yet made public about the failings of a mortgage business. Some of its accusations echo charges that surfaced about the accounting firm Arthur Andersen after the collapse of Enron in 2001.
E-mail messages uncovered in the investigation showed that some KPMG auditors raised red flags about the accounting practices at New Century, but that the KPMG partners overseeing the audits rejected those concerns because they feared losing a client.
You do know that the fees are higher when the practices become marginal…sort of like an Emperor’s Club 5 diamonds girl.
I’m confused by your ‘tags’ because you don’t relate anything that suggests ‘IOKIYAR, Republicans Are Good With Money’ unless I am so dense that I didn’t realize that KPMG and/or New Century were hardcore Republicans.
I suspect that if you were going to make the case that the Republican President and the Republican controlled Congress could have/should have enacted legislation to further criminalize this behavior but you didn’t do that so the tags don’t seem appropriate.
One final thought…perhaps the President should just issue an executive order (they are as good as law aren’t they?) requiring accounting firms to self report their own corruption like he did for the contractors in Iraq because that makes everything run so much better.
Don’t forget the ratings agencies. I’m sure all this was AAA rated up until the day they filed for bankruptcy.