It has been a long time since mortgage backed securities lost most of their value which helped trigger the financial crisis. Some of the value of those bonds was inflated as they were sold from the companies that created them to other companies which thought they were great investments.
The federal government has decided to chase some of the people who “inflated” the value of the mortgage paper, in particularly to make high compensation.
Federal prosecutors are preparing to file criminal charges against former Wall Street traders alleging they misstated the value of mortgage bonds, an issue central to the 2008 financial crisis, according to people familiar with the matter.
The Manhattan U.S. Attorney’s office is planning to allege in a criminal complaint that several former traders at Credit Suisse Group AG, a major global investment bank, misled the bank’s investors by booking inflated prices of mortgage bonds to boost their bonuses, despite knowing the values of those securities had dropped, according to the people familiar with the matter.