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The Wall Street Money Machine

The hedge fund helped create arcane mortgage-based instruments, pushed for risky things to go inside them and then bet against the investments. More »

As investors left the market in the run-up to the meltdown, Wall Street created fake demand, increasing their bonuses — and ultimately making the crisis worse. More »

As investors left the market in the run-up to the meltdown, Wall Street created fake demand, increasing their bonuses — and ultimately making the crisis worse. More »

All 44 Stories (8)

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MuckReads Podcast: The Peril of Whistleblowing on Wall St.

William D. Cohan joins Jake Bernstein to talk about financial regulation in the face of a big-bank culture of self-preservation above all.

The Rise of Corporate Impunity

Meet the only Wall St. executive prosecuted as a result of the financial crisis. Has justice been served?

SEC Issues More Fines Over Magnetar Deals – and Appears to Move on

There have now been more than $435 million in SEC settlements regarding one of the most notorious groups of mortgage securities deals behind the financial crisis.

SEC Files Charges in Magnetar Deal

The Securities and Exchange Commission has charged an asset manager with fraud for its role in one of the most notorious groups of mortgage securities deals behind the financial crisis.

SEC Reportedly Passes on Charging Magnetar

Yet Another Bank Fined for a Magnetar Deal, With Yet More Revealing Emails

Deutsche Bank agrees to pay $17.5 million to Massachusetts for a deal involving Magnetar, the hedge fund behind many CDOs gone sour.

Emails Give Glimpse Into Deals That Fueled Financial Meltdown

Hedge fund Magnetar and Wall Street banks created $40 billion of deals. The emails show how they did it.

The Magnetar Fallout: Who’s Been Charged, Has Settled, or is Now Being Investigated?

A rundown of the various investigations into the deals spawned by the hedge fund Magnetar that helped super charge the financial meltdown.

How Bank of America Execs Hid Losses—In Their Own Words

A suit reveals how Bank of America knew about big losses at Merrill Lynch before the companies merged but didn't tell shareholders.

Four Whistleblowers Who Sounded the Alarm on Banks’ Mortgage Shenanigans

Whistleblower suits settled as part of the government's $25 billion settlement offer a glimpse at the kinds of behavior that ran rampant in big banks' mortgage operations.

13 Reasons Goldman’s Quitting Exec May Have a Point

A timeline of SEC charges against Goldman and employees.

Financial Firm Fined for Misleading Investors on Magnetar Bets

Yet another player, Boston’s State Street, is scrutinized over Magnetar deals and fined $5 million.

Two Wall Street Players Ensnared in New Probe

Banker involved in Magnetar deals is one of two recommended for disciplinary action for "alleged misrepresentations in connection with the sale" of a complex security.

SEC Warns Top Banker of Charges Over Magnetar Deal

The SEC has warned Alexander Rekeda that it is considering civil charges against him for his role in creating risky collateralized debt obligations while working for the Japanese bank Mizuho.

Deutsche Analyst Sounded Alarm When Asked to Alter Numbers

A junior analyst at Deutsche Bank protested when a mid-level executive asked him to adjust a spreadsheet to make a mortgage-backed security look less risky. The 2007 episode raises questions about whether the SEC has looked closely enough at the bank’s practices leading up to the financial crisis.

Margin Call: A Small Movie Unveils Big Truths About Wall Street

Margin Call’s all-star cast brings to life writer/director J.C. Chandor’s film, which is the most insightful Wall Street movie ever produced.

Making Margin Call: An Interview with Writer/Director J.C. Chandor

J.C. Chandor sits down with ProPublica to talk about how the movie Margin Call came together and the challenges of making a hard-hitting movie about Wall Street on a tight budget.

Did Citi Get a Sweet Deal? Bank Claims SEC Settlement on One CDO Clears It on All Others

A $285 million SEC settlement appears to wipe the slate clean on Citi's multi-billion-dollar CDO business.

SEC Proposes Ban on Magnetar-Like Deals

The SEC moves to ban the questionable Wall Street deals that, as we detailed, helped fuel the financial crisis.

After SEC Settlement With JPMorgan, Will Other Banks Pay Too?

Many other banks created deals with similar characteristics to the transaction that resulted in JPMorgan's $154 million settlement with the government. But the SEC still faces big challenges in wresting more settlements from banks.

Magnetar Deal Prompts SEC Settlement With JPMorgan Chase

A year after our story on hedge fund Magnetar, JPMorgan Chase agrees to pay $154 million over SEC charges it misled investors about Magnetar’s role in a deal.

Merrill Lynch Investigated for CDO Deal Involving Magnetar

The Securities and Exchange Commission is investigating whether Bank of America's Merrill Lynch shortchanged investors on a $1.5-billion mortgage-backed security deal.

From Dodd-Frank to Dud: How Financial Reform May Be Going Wrong

Some fear the grandest ambitions of the law passed last year to reform the nation's financial system are being undermined in the rule-making process.

In HBO’s ‘Too Big to Fail,’ the Heroes Are Really Zeroes

Watch carefully, and you'll see how the three men who saved the world—Federal Reserve Chairman Ben Bernanke, NY Fed's Timothy Geithner, and Treasury Secretary Henry Paulson—get it wrong again and again and again.

U.S. Senate Investigation Gives New Details on Magnetar

Citing reports by ProPublica, lawmakers describe the hedge fund's role in the collateralized debt obligations business.

SEC Warns Former JPMorgan Exec It Plans to Sue Over Magnetar Deal

Securities regulators may soon file suit against a former JPMorgan Chase executive for misleading investors about the role of Magnetar, a hedge fund, in creating a risky mortgage security.

New Documents Show Hedge Fund Magnetar Influenced Deal, Despite Denials

A Financial Crisis Inquiry Commission document shows Magnetar selected assets for a billion dollar Merrill Lynch mortgage securities deal, despite having long asserted otherwise.

The ‘Subsidy’: How a Handful of Merrill Lynch Bankers Helped Blow Up Their Own Firm

The builders of mortgage securities at industry giant Merrill Lynch couldn’t find buyers for their wares. So they paid another group at Merrill to take billions of dollars of the unwanted assets.

SEC Investigating Citigroup Mortgage Deal

The SEC is investigating whether in the run-up to the financial crisis Citi acted improperly as it created and marketed a $1 billion CDO.

SEC Investigating Deal Between JPMorgan and Hedge Fund Magnetar

The SEC is investigating whether JPMorgan adequately disclosed to investors that the hedge fund Magnetar influenced a deal it was also betting against.

Magnetar Responds to Our April Story—And Our Response

Magnetar Deals at Center of New Lawsuit

A European-based investment fund and a French bank are battling it out in New York state court over complex securities created at the behest of the hedge fund Magnetar

Interactive: CDOs’ Interlocking Ownership

Which CDOs and Banks Had Deals With the Most Cross-ownership?

See which CDOs exchanged pieces with other CDOs through our interactive feature that reveals the incestuous nature of Wall Street’s CDO business.

A Q&A About Our Investigation on Banks’ Self-Dealing

Wall Street banks created fake demand in the run-up to the housing meltdown, increasing their bonuses -- and ultimately making the crisis worse. We asked for your questions on our investigation, and now here are our reporters' answers.

Welcome to CDO World!

A Bank’s Best Customer: Its Own CDOs

The CDO Daisy Chain

Chart: A Bank’s Best Customers

In the last two years of the boom, CDOs created by one bank commonly purchased slices of other CDOs created by the same bank.

Banks’ Self-Dealing Super-Charged Financial Crisis

As investors left the market in the run-up to the meltdown, Wall Street created fake demand, increasing their bonuses — and ultimately making the crisis worse.

Merrill Lynch Did a Deal ‘Precisely’ Like Goldman’s, Suit Asserts

The fraud charges against Goldman Sachs has spawned a spat as to whether Merrill Lynch did similar deals.

Magnetar Letter to Investors About Our Story—And Our Response

The Chicago hedge fund Magnetar emphasizes to investors that its CDO practices were not illegal.

Your Magnetar Questions, Answered

Reporters Jesse Eisinger and Jake Bernstein answer your questions on the Magnetar hedge fund at the core of the financial crisis.

Magnetar Gets Started

E-mails Give Glimpse of How Magnetar Worked

A deal that fell apart shows how Magnetar pressed to include risky bonds in CDOs.

The Timeline of Magnetar’s Deals

The Magnetar Trade: How One Hedge Fund Helped Keep the Bubble Going

The hedge fund Magnetar helped create mortgage-based securities, pushed for risky things to go inside them and then bet against the investments, resulting in billions in losses for investors and ultimately making the financial crisis worse.

Magnetar’s (Nearly) Perpetual Money Machine

A Lawsuit Suggests Merrill Lynch’s Role

Magnetar’s Exit: A Deal So Bad Even a Credit-Rating Agency Balked

JPMorgan Gets Into the Game—And Loses

The Magnetar Trade: How One Hedge Fund Helped Keep the Bubble Going

The hedge fund helped create arcane mortgage-based instruments, pushed for risky things to go inside them and then bet against the investments.

The Anatomy of the Magnetar Trade

Concerns About ‘Reputational Risks’

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