What occurred was bankers packaging sub-prime mortgages in complex, mixed packages and marketing them saying they were good loans, when in fact under historic banking practices the loans would not have been made. This is the manner in which they were sold. Then, knowing that these loans were often given to people who would not be able to pay them when the ARM went up in five years or even worse, the interest only loan began to need to pay principle, they shorted the very loans they were selling to customers. In essence, they lied to their investors about the safety of the loans and bet against the loans themselves and made a bunch of money ding so. I suggest you read Michael Lewis' book [u]Boomerang: Travels in the New Third World [u] for a complete description of what occurred in many countries.
Misrepresenting a product in full knowledge of the risks, so much so that they made money betting against the loans they were selling, sounds unethical as well as willfully misleading investors. THis was not a case of mismanagement
, but a case of selling an investment and betting on its failure knowing it would fail.
Perhaps you have the legal expertise to find out what crime this is.
