The management at IndyMac (IMB) may soon see the world through the eyes of Jeff Skilling of Enron, Bernie Ebbers of Worldcom, et al: First, you watch as your shareholders lose everything. Then, you watch as an investigation unfolds that may eventually send you to jail
The FBI is investigating IndyMac for possible fraud, one of 21 targets under investigation in the mortgage industry. Public opinion does not rally around managers whose stocks go to zero, especially when they’re charged with safeguarding the public’s money–and especially when they have paid themselves hundreds of millions to do so. Regardless of whether IndyMac actually committed fraud in securitizing loans, insider trading, or properly disclosing the value of their assets, its former managers had better hope the FBI doesn’t find anything interesting.
In any event, for shareholders, it’s too little too late…
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