JT Note: FBI agents from the New York office with expertise in terrorist financing continue to investigate potentially fraudulent loans, asset-backed securities and related credit derivatives. Elizabeth ("Liz") MacDonald, award winning business journalist and anchor at Fox Business News did the best series on the coming crackdowns. Here are three of the links:
"Crackdown on Wall Street: The Perp Walks are Coming," Feb. 2, 2009
"A Window into the Wall Street Frauds," Feb 4, 2009
"Inside Wall Street's Subprime Bond Factory," Feb 6, 2009

The article below seems to be concerned with only part of the story.

U.S. probe just what credit derivatives sector did not need
Financial Times - July 15, 2009
by Gillian Tett and Peter Thai Larsen

As news of the US Department of Justice probe into the credit derivatives world broke on Tuesday, some bankers might have felt it was a development they needed like a hole in the head.

The banking industry is lobbying stridently against the mandatory use of exchanges, since that could slash margins. But if the DoJ investigation does find any wrongdoing, it could shake confidence in the OTC CDS world – and potentially strengthen the hand of those pushing for activity to move to exchanges, where prices are more transparent.

“This [whole issue] is going to get more attention in the coming months,” says Janet Tavakoli, president of Tavakoli Structured Finance.

“Wall Street claimed that this was done with sophisticated investors but in the wake of AIG, the taxpayer is now involved and the whole ball game [with regulators] has changed,” Ms Tavakoli added.


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Janet Tavakoli is the president of Tavakoli Structured Finance, a Chicago-based firm that provides consulting to financial institutions and institutional investors. Ms. Tavakoli has more than 20 years of experience in senior investment banking positions, trading, structuring and marketing structured financial products. She is a former adjunct professor of derivatives at the University of Chicago's Graduate School of Business. She is the author of: Credit Derivatives & Synthetic Structures (John Wiley & Sons, 1998, 2001), Structured Finance & Collateralized Debt Obligations (John Wiley & Sons, 2008), and
Dear Mr. Buffett: What An Investor Learns 1,269 Miles From Wall Street (John Wiley & Sons January 2009)

Clients of Tavakoli Structured Finance have the benefit of proprietary consultation, which is not available in any other paid or public forum. Clients also commission proprietary research and analysis.

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