2014 Planned News/Events, Small Newsroom finalist

After the Meltdown


Alison Fitzgerald, Daniel Wagner, Lauren Kyger, John Dunbar

The Center for Public Integrity

Planned News/Events, Small Newsroom


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About the Project

Among the most shameful legacies of the 2008 financial crisis that plunged the U.S. into deep recession is that the architects of the meltdown have faced almost no consequences for their recklessness.

Five years after the bankruptcy of Lehman Brothers Holdings Inc., the Center for Public Integrity tracked down dozens of those individuals. The resulting series pegged to the anniversary, “After the Meltdown,” showed that the nation’s regulators and prosecutors had failed to hold any of them accountable for the wreckage they caused. We found:

  • The mortgage executives at Bear Stearns Cos. Inc., who led that firm down a path to its own destruction, are now doing the same work for Bear’s former competitors.
  • The chief executive officers of five of the major Wall Street banks that got into the most financial trouble in 2008 are all living in luxury, free from facing any criminal or even civil liability for their mismanagement.
  • The top executives — many of them founders — of every one of the 25 largest subprime lenders from the boom years 2005 through 2007 are back in the mortgage lending business.
  • The majority of the regulators tasked with preventing or cleaning up the meltdown are back in the private sector, earning big fees from writing books and lecturing on their experience.

Center reporters spent months piecing together the series, digging through documents and databases and conducting dozens of interviews.

For “Ex Wall-Street Chieftains Living Large in Post-Meltdown World,” we combed through court records, SEC filings, real estate records, corporation filings in several states, offshore banking records, and business and personal websites. We contacted dozens of business associates, lawyers, friends and foes to get information on the activities of our subjects. We interviewed Bridge partners, golf caddies, disgruntled former employees and friends of the financiers.

This painstaking process allowed the Center to illustrate with great detail how these executives are living lavishly and with impunity.

“Subprime Lending Execs Back in Business Five Years After Crash” required more extensive sleuthing. It was not obvious that so many key subprime executives had re-entered the business, and their new companies were often set up as investment trusts and hedge funds with vague names like CS Financial and Caliber Funding; few mentioned “mortgage” or “home.”

Using court documents, public filings, social media profiles, records databases and human sources, the Center identified the specific people who oversaw their former companies’ shoddy lending and then tracked them using incorporation documents, internal Web sites and entries in the National Mortgage Licensing System registry.

We confirmed that all of the new companies were engaged in increasingly risky lending by obtaining and analyzing mortgage term sheets, rating-agency research, conference call transcripts and other independent analyses. This final phase helped ensure that the executives we identified truly reflected our story’s theme: The same people who raced to the bottom before are again pushing to weaken mortgage lending standards.

For “Ex-SEC chief now helps companies navigate post meltdown reforms,” Center reporters tracked down the most visible of the meltdown regulators and showed they are now profiting from their experiences overseeing the reckless behavior that led to the crisis and the bailout. In most cases the subjects of the stories declined to be interviewed.

The series also highlighted the failures of our judicial system, which did not prosecute any leaders of any major financial institutions implicated in the crisis. Executives from small banks, mid-level employees and individuals have been pursued while the rich and powerful were spared. Those from larger companies are free, and often still working in their fields.

Graphics helped illustrate that chief executive officers of the five major Wall Street banks which got into the most financial trouble in 2008 are all living in luxury, free from fear of criminal or even civil liability. They helped show how top executives—many of them founders—of every one of the 25 largest subprime lenders from 2005 through 2007 are back in the mortgage lending business. And, they outlined what regulators tasked with preventing or cleaning up the meltdown said before, during and after.

“After the Meltdown” stood out from the many Lehman anniversary packages because it focused on the individuals involved with the 2007-08 disaster—and called out the failure of government. Several other stories focused on the current health of the economy and the banking sector.

It generated huge interest and outrage in the media and general public. The New York Times wrote about the piece, as did the Columbia Journalism Review, and it was referenced in dozens of other publications. The lead story was published in full or in part on more than a dozen news websites, including Huffington Post and the Philadelphia Inquirer. Thousands of readers logged comments of outrage on the various sites where the stories could be found. On the Center’s website, the story received nearly 20,000 “likes” from readers.

Former SEC Chairman Christopher Cox took issue with the story about him and wrote the Center an extensive letter arguing that his current work was mischaracterized. The Center listened to his concerns and reviewed our work and in the end we stood by our reporting. We offered Mr. Cox the opportunity to add his views to the comments below the story and he declined.

Georgetown Law Professor Adam Levitin cited our story in his Senate Banking Committee hearing testimony on housing finance reform to make the case that “reputational sanctions do not work.” U.S. Sen. Sherrod Brown, D-Ohio, also cited the story in questioning hearing witnesses.

Following this series and other stories that highlighted the government’s lack of action against major banks and executives tied to the crisis, the U.S. Justice Department and SEC became more aggressive in their pursuit of sanctions against companies including JPMorgan Chase and Bank of America for their reckless behavior in the market for subprime mortgage-backed securities, leading to multibillion dollar settlements in which the government pressed for the companies to admit wrongdoing.