From corporation-watch at countercorp.org Mon Jun 14 18:40:16 2010 From: corporation-watch at countercorp.org (Corporation Watch) Date: Mon, 14 Jun 2010 15:40:16 -0700 Subject: [Corp. Watch] Toyota has history of hiding potentially fatal problems Message-ID: <7CA5A406-7697-48F4-9054-EFC1D2639632@countercorp.org> Toyota Fixed Steering Rods for Over a Decade Before Recall By James R. Healey (USA Today, June 14) -- Toyota paid a record fine recently for dragging its feet on disclosing a safety defect blamed for potentially fatal unintended acceleration. Now documents have come to light in a California lawsuit that point to possible delays involving an earlier safety issue, one that could result in loss of steering control. Records of Toyota warranty repairs and customer complaints that are part of the lawsuit show that the car company was dealing with cracking and breaking steering relay rods in the U.S. for at least 11 years before it recalled 330,000 pickups and SUVs in Japan to replace the rods -- and 12 years before its 2005 recall of nearly a million similar trucks in the U.S. for the problem. The steering rod records that are part of the lawsuit again call into question whether Toyota promptly reports safety problems in the U.S. The National Highway Traffic Safety Administration (NHTSA) earlier this year fined Toyota the maximum $16.4 million for delaying a recall of 2.3 million vehicles for gas pedals that could stick, causing unintended acceleration. An ongoing investigation is looking at whether Toyota improperly delayed a separate recall of 5.4 million vehicles for floor mats that could trap poorly designed gas pedals. Now NHTSA -- which accepted Toyota's assertion after the 2004 steering-rod recall in Japan that U.S. action was not needed -- has opened a probe demanding that Toyota explain why it waited nearly a year to recall the trucks in the U.S. to fix the rods. Federal law requires an automaker to report a known safety defect within five business days. The 2005 U.S. recall covered 1989-95 Toyota 4Runners and compact pickups, and 1993-98 T100s. "There is a pattern of covering up defects at Toyota," asserts Clarence Ditlow, head of the Center for Auto Safety, a watchdog group often at odds with both automakers and NHTSA. "It looks to me like Toyota knew about" the relay rod problem long before the recalls, he says. Because the documents are part of a lawsuit, Toyota declined to comment or to address why it told NHTSA in 2004 there wasn't a U.S. problem, even though Toyota had been fielding U.S. complaints for years, and had been making warranty repairs for more than a decade. "Toyota's long-standing policy is to not provide comment in regard to ongoing litigation," spokesman Brian Lyons says. He says Toyota is cooperating with NHTSA's demand that Toyota explain why it didn't recall U.S. vehicles sooner. The steering relay rod links the front wheels to the steering system. If it breaks, the vehicle can't be steered. "You might have a little control over one tire, but that other one is going to do what it wants," says Idaho State Police Capt. Brian Zimmerman. Idaho State Police investigated a fatal crash Sept. 15, 2007, near Fairfield, Idaho, of a 1991 Toyota compact pickup that was on the U.S. steering rod recall list. Driver Michael Levi Stewart, 18, was killed; three passengers were injured. None wore safety belts, Zimmerman says. The Stewart family's lawsuit, filed in California state court by attorney John Kristensen, includes the Toyota-owner complaint and warranty information, which were obtained during the legal discovery process. Kristensen says Stewart got the truck in July 2007. He says the previous owner testified he received no recall notice. The Stewart family got a notice three months after the crash. The lawsuit is scheduled for trial this fall. A USA Today analysis of that complaint and warranty data shows at least 153 steering rod repairs to 4Runners and compact and T-100 pickups from 1993 to September 2005, when the vehicles were recalled in the U.S. Two fatal crashes in addition to Stewart's are linked to Toyota relay rod failures, according to NHTSA. One happened before the recall. The warranty records show that not only was the company replacing relay rods in U.S. trucks under warranty, but also doing so-called "good will" replacements -- free repairs on vehicles with expired warranties. "It would seem unusual that warranty work would be conducted after the warranty period, unless it were a known fault," says Jeff Bartlett, an editor at Consumer Reports magazine. "There's a certain admission of guilt if the work is repeatedly performed after the warranty period . That would suggest they saw a trend [of] an emerging problem." The steering problem apparently was well-known enough to Toyota dealers that at least once -- in August 1995 -- a dealer replaced the rod on a new pickup before it was sold, the warranty records show. Complaint documents also show that Toyota didn't treat all customers equally. Jack Anderson of Garland, Texas, recalls the relay rod snapping in 2000 on his 1989 compact pickup that was later on the recall list. "It could have been a wreck deluxe if I hadn't gotten off" the road. He says Toyota refused to repay him for the repairs. He also says he never got a recall notice, even though his truck is covered. In some other cases, however, the customer-complaint documents show, Toyota provided "goodwill" reimbursement for some or all of the costs. The complaints include comments from dealer technicians or service managers about the rods. A typical one: "Weak metal stressed and cracked," says a note about a rod replacement in February 2006. Where was NHTSA? The warranty fixes raise another question: Where was NHTSA? Its early warning system, intended to track such repairs and spot trends, was in operation by 2003. The system requires automakers to make quarterly reports to NHTSA of warranty work done on vehicles up to 10 years old. It was set up under the so-called Transportation Recall Enhancement, Accountability, and Documentation (TREAD) Act, a law passed as a result of the Ford-Firestone recall that grew to some 20 million tires by 2001. And the 2004 Japan recall should also have triggered a closer look at U.S. models, says Jeffrey Runge, the NHTSA administrator at the time. If an automaker "reports something (in another country) but says, 'We don't see any reason to recall it here,' it would appear on the radar screen and the agency would ask for information," says Runge, who served as administrator from 2001 to 2005, and is now a consultant. "Once a company reports something like that, it goes into the database as something to watch," Runge says. In NHTSA procedure, the Japan recall should have triggered a preliminary evaluation, he says. It did not, and Runge says he does not know why. "That would never have risen to my level" at the agency, he says. NHTSA spokeswoman Julia Piscitelli says the agency "closely monitors foreign recalls" and uses "a wide variety of resources to determine if an investigation is needed," but "given the low number of incidents and lack of injuries or fatalities over a span of many years in this case, we did not have information that warranted an investigation." NHTSA's data show 19 complaints prior to the U.S. recall, significantly fewer than the 153 relay-rod fixes that were specified in the Toyota warranty documents. The NHTSA complaints alleged one crash and no injuries or deaths before the U.S recall. Although the steering rod recall was years earlier than Toyota's recent multiple recalls for unintended-acceleration issues, there are similarities in how the company handled them. After each recall, Toyota's leader pledged more attention to quality, and less to sales growth. In a 2006 report, after a rare Japan government reprimand for how it handled the 2004 rod recall and other defects in Japan, then-Toyota president Katsuaki Watanabe was quoted as saying, "There will be no growth without an improvement in quality." This February, current President Akio Toyoda told a U.S. Congressional hearing that unintended-acceleration issues, now linked by NHTSA to as many as 89 U.S. deaths, occurred because "Toyota has, for the past few years, been expanding its business rapidly." Because of such growth, he said, the company "became confused, and we were not able to stop, think and make improvements as much as we were able to before." He vowed to de-emphasize growth, re-emphasize quality. Both recalls came after highly publicized crashes. In Kumamoto, Japan, in 2004, steering failed on a vehicle similar to the U.S. 4Runner, causing a head-on crash that injured five and got considerable media attention. The relay rod recall in Japan followed. In San Diego County, last August, a crash killed off-duty California Highway Patrol officer Mark Saylor and three family members after an improper floor mat jammed a Lexus gas pedal. Toyota announced a recall to fix mats and pedals in November. Both U.S. recalls came months after foreign actions for the same problems. In the steering rod case, Toyota recalled 330,000 vehicles in Japan in October 2004, but didn't recall 977,000 similar U.S. models until September 2005. In the case of gas pedals that could cause unwanted acceleration, Toyota changed the design of gas-pedal assemblies in European-market vehicles in July 2009, but said it didn't suspect a problem with similar U.S. models. Toyota eventually recalled 2.3 million U.S. vehicles in late January to replace the sticky pedals. Kristensen, the lawyer in the Stewart suit against Toyota, calls that a pattern. "If they didn't change last time", he says, "why do you think they will this time?" Runge says automakers generally resist recalls. "I would hesitate to single (Toyota) out," the former NHTSA administrator says. "I don't recall any one (automaker) standing out as more difficult than another. They all had the same concerns, and wanted to avoid using [the word] 'recall'." In his experience, "They'll want to call it 'customer satisfaction action' or such. Once they call it a 'recall,' they open themselves to liability." From corporation-watch at countercorp.org Wed Jun 16 16:37:06 2010 From: corporation-watch at countercorp.org (Corporation Watch) Date: Wed, 16 Jun 2010 13:37:06 -0700 Subject: [Corp. Watch] Double-dipping CEO sank bank, then tried to steal TARP funds Message-ID: Grand Jury Indicts Mortgage Company Chief in TARP Case By Pete Yost (Associated Press, June 16) -- A federal grand jury has indicted the head of what was once among the largest privately held mortgage-lending companies for allegedly scheming to steal over half a billion dollars from the government's Troubled Assets Relief Program (TARP). The indictment in Virginia alleges that Lee Bentley Farkas and co-conspirators carried out the alleged plot at their company, Taylor, Bean & Whitaker (TBW) Corporation of Ocala, Fla., where Farkas was chief executive. The attempt to get TARP funds was just one part of a scheme that was "truly stunning in its scale and complexity", and resulted in losses of more than $1.9 billion, Lanny Breuer, the Justice Department's assistant attorney general for the Criminal Division, told a news conference Wednesday. The co-conspirators even gave a name to their alleged effort to defraud the TARP: They called it "Project Squirrel", said Neil MacBride, the U.S. attorney for the eastern district of Virginia. Neil Barofsky, special inspector general for TARP, told reporters that investigators uncovered the alleged conspiracy before the theft could occur. Farkas was arrested Tuesday night while working out in a gym that he owns in Ocala, said Shawn Henry, head of the FBI's Washington, D.C., field office. Besides conspiracy, Farkas is charged with bank fraud, wire fraud, and securities fraud. TBW, which originated and purchased billions of dollars in new residential loans annually, began to experience cash-flow problems in 2002. In an effort to cover the shortfalls, the company devised a scheme to misappropriate funds from Colonial Bank and Ocala Funding, which were controlled by TBW and financed by large banks, according to the indictment. The conspirators referred to the attempt to cover the shortfalls as "Plan B," according to the indictment. In separate civil charges, the Securities and Exchange Commission (SEC) said Farkas sold Colonial Bank more than $1.5 billion in fabricated or bad mortgage loans and securities. Colonial's parent company, ColonialBancGroup headquartered in Montgomery, Ala., filed for bankruptcy last August. The indictment alleges that Farkas and co-conspirators caused ColonialBancGroup to submit false information to the Federal Deposit Insurance Corporation and to the SEC when applying for TARP funds. Farkas was responsible for a bogus equity investment that caused Colonial Bank to misrepresent that it had satisfied a requirement to qualify for TARP funds, the SEC said. When the bank announced it had received preliminary approval for TARP funds, its stock price jumped 54 percent in two hours of trading, according to the SEC. From corporation-watch at countercorp.org Thu Jun 17 17:33:04 2010 From: corporation-watch at countercorp.org (Corporation Watch) Date: Thu, 17 Jun 2010 14:33:04 -0700 Subject: [Corp. Watch] Deja vu all over again: Ignoring safety leads BP to crisis, stonewalling Message-ID: BP Documents Highlight PR Strategy After Deadly Texas Blast By Abbie Boudreau and Courtney Yager (CNN, June 16) -- In the hours after a 2005 refinery explosion that left 15 people dead, a British Petroleum (BP) executive suggested a holiday weekend and the national furor over a Florida woman's last days would eclipse the tragedy. With the oil company now battling to save an image tarnished by the worst oil spill in U.S. history, the lawyer who found that e-mail among a mountain of BP documents says nothing appears to have changed. "Their strategy is the same every time ... And it's always -- first -- damage control," Brent Coon told CNN. "And with damage control, they accentuate the positive, downplay the negative, tell everybody they're sorry, they're gonna fix it, they're gonna do better, and not to worry." Coon represented many of the victims of the March 2005 explosion at BP's refinery in Texas City, near Houston. The blast killed 15 workers and injured 180, with many of the survivors suffering severe burns, amputations, and broken bones. During litigation that followed, Coon extracted about 7 million documents from the company, including the e-mail that discussed whether the upcoming Easter weekend would push the explosion off the public stage. "Looks like injuries and loss of life are heavy. Expect a lot of follow-up coverage tomorrow. Then I believe it will essentially go away -- due to the holiday weekend," BP America public relations chief Patricia Wright advised other executives. Wright added, "This is a very big story in the U.S. right now -- but the Terry Schiavo story is huge as well." Schiavo was the severely brain-damaged Florida woman whose case became the centerpiece of a national right-to-die battle, and the controversy was reaching a climax just as the Texas City explosion occurred. Coon said the document made him "sick to my stomach." But he says the stacks of paper, e-mails, and slides uncovered after the Texas City blast offer a rare insight into the culture of BP and may take on a new meaning in light of the massive Gulf spill. BP is now under fire for its failure to shut down a ruptured undersea well in the Gulf of Mexico, a spill that now dwarfs the 1989 grounding of the Exxon Valdez in Alaska's Prince William Sound. Critics say it has downplayed the scale of the disaster, underreported the amount of oil leaking, and is trying to keep images of the gusher under wraps. With its stock plummeting and the environmentally friendly image it spent years cultivating taking a beating, the company has taken out full-page newspaper ads and aired television spots in which CEO Tony Hayward apologizes for the spill and vows, "We will make this right." But Coon said BP appears to be following "the same course of conduct" it did after Texas City. "I don't think there's a shred of evidence in BP's favor that shows that they've done anything to change their corporate safety culture," he said. At least four of the people included on Wright's e-mail are still working as spokespeople for BP, CNN has found. The company has not responded to multiple requests for interviews with either CEO Tony Hayward or another executive familiar with the Texas City documents. The Gulf spill began when the drilling platform Deepwater Horizon, owned by BP contractor Transocean, blew up and sank off Louisiana, taking 11 workers with it. BP, Transocean, and oilfield services contractor Halliburton all have pointed fingers at each other in hearings in Washington and New Orleans. Coon says the documents his law firm unearthed in the Texas City case showed BP employees warned that corners at the plant were being cut, and dangerous conditions were being ignored. "Quit waiting for a known possible disaster to happen before correcting the problem," one worker wrote. Another stated, "This company deliberately put my life in danger to try and save a buck." A third complained, "If this facility was an aircraft carrier, we would be at the bottom of the ocean." "What was shocking was that we didn't just find that smoking gun," Coon said. "We found an entire arsenal. You could have fitted an army with all of the smoking guns that we found in this." Also among the documents that turned up in the lawsuit was a guide to filling out incident reports, created by lawyers hired by BP, that urged workers to "avoid language that is negative, inflammatory, or implies criminal intent or willful misconduct." Coon dubbed one slide from the BP presentation the "dirty words document," which tells workers to avoid terms like "reckless," "careless" or "incompetent." "They don't want to have anything in any of their reports or anything in writing that indicates that they did anything wrong," he said. The Texas City blast killed 15 BP contractors who were housed in a trailer near the site of the explosion, which originated with equipment used to boost the octane levels in gasoline. In 2007, BP pleaded guilty to a felony, agreed to pay $21 million in fines from the Occupational Safety and Health Administration, and paid another $50 million in criminal penalties in connection with the disaster. The plea agreement required the company to fix the problems that led to the explosion. But when that didn't happen, they fined BP again in 2009 -- an $87 million proposed penalty that would be the largest in the agency's history if upheld. BP is contesting those citations and the assessed penalties. Coon said the Texas City case showed that BP "has a lot of systemic problems that they are never going to change unless somebody makes them change." And Coon said it was clear from that case that if government officials didn't force BP to change its corporate culture, "something worse is going to happen, and it won't be that long. And [now we see that] it did happen." From corporation-watch at countercorp.org Fri Jun 18 01:18:08 2010 From: corporation-watch at countercorp.org (Corporation Watch) Date: Thu, 17 Jun 2010 22:18:08 -0700 Subject: [Corp. Watch] Google collected more private data than it previously admitted Message-ID: French Probe Google Over Privacy By Stephanie Bodoni (Bloomberg News, June 17) -- Google recorded passwords and bits of e-mail messages while collecting data for its Street View mapping service, France's privacy watchdog said Thursday after conducting the first outside review of the information. Google, under investigation in several nations for possible privacy breaches because of its data-gathering practices for Street View, collected data without the knowledge of the people concerned, said France's Commission Nationale de l'Informatique et des Libertes (CNIL). "The recording of such data could put Google in possession of data such as websites visited, the content of messages, or even passwords," the French data-protection agency said in a statement. "That's why the agency went on-site on May 19 for an inspection of the nature of the data collected, and the measures taken to remedy this." Officials in Germany, Spain, and other European countries started probing Google after it admitted it had collected data from wi-fi networks. The privacy practices of Google, owner of the world's most-used search engine, have also come under scrutiny in Canada, the Czech Republic, and Italy. Last month, the U.S. Federal Trade Commission said it would take a "very close look" at Google's data gathering. The Mountain View company has said it's cooperating with the authorities. "We have reached out to the data protection authorities in the relevant countries, and are working with them to answer any questions they have," Google said in an e-mailed statement. "Our ultimate objective is to delete the data, consistent with our legal obligations and in consultation with the appropriate authorities." France's CNIL said that it is "the first data-protection authority in the world to get access to the data collected by Google in the case of Street View", and that "it seems the Spanish and German authorities have made the same request." Street View allows Google users to click on maps to see photographs of roadsides. On May 19, CNIL officials went on-site to check what Google had collected and what was being done to "remedy to the recording," the agency said, adding that Google complied with its request to hand over a copy of wi-fi data collected and stored in France, as well as technical information on the process. During the inspections, the French officials said they "got confirmation that the Street View services provided useful information to other services of Google Maps, and in particular Google Latitude." Google said May 17 that it deleted information mistakenly gathered from Wi-Fi networks in Ireland and was aiming to do the same in other countries. From corporation-watch at countercorp.org Fri Jun 18 14:02:56 2010 From: corporation-watch at countercorp.org (Corporation Watch) Date: Fri, 18 Jun 2010 11:02:56 -0700 Subject: [Corp. Watch] Time to hold actual people accountable for corporate malfeasance Message-ID: <7CE23908-15CD-4290-9CEB-838788B11475@countercorp.org> The Importance of Blaming the Right People for the Wall Street and Gulf Disasters by Rob Shapiro (Huffington Post, June 17) -- This year's notorious Supreme Court decision on campaign finance found that corporations have the full rights of individuals, at least in that area. The truth is, most of us do approach big companies as if they were people -- and then, when those companies wreak havoc on the country, no one can be found to hold accountable. Congress can pass new regulations, but that's little consolation to the victims. Both the Wall Street meltdown and the Gulf spill unfolded not only because regulation was lacking, but because enforcement was lax even where regulations did exist. In both cases, we see signs of "regulatory capture," with the Securities and Exchange Commission and the Minerals Management Service applying existing regulations in ways which, at a minimum, permitted the persistent risks that eventually led to disaster. In the quest for accountability, there also inevitably will be lawsuits. But that may not produce real accountability either. The companies may not survive to pay any judgments; and when they do, the costs fall to its current shareholders. The executives whose decisions actually brought on the crisis are left unaccountable - a moral hazard of the first degree -- and the rest of us are left unsatisfied. Some of the public's outrage in both crises stems from people's assumption that large companies do operate like people, at least in respecting broad social norms. So we expect our bank to be concerned about serving our financial needs, a view implicitly encouraged by the sketchy form of neo-classical economics that dominates public discourse. In an abstract world of the perfectly efficient market, markets constrain banks to offer us goods and services that serve our interest; in the real world, our banker's retail job is simply to sell us his bank's products based on how profitable they are to that bank. And even when we recognize the difference, we assume our bank won't abuse our trust, because the law will prevent it and, anyway, educated people just don't act that way. Similarly, whether or not Gulf residents expected oil companies to share their concerns about their regional environment -- and many certainly did have those expectations -- the market was supposed to ensure that the risk of incurring $20 billion or more in liability costs would prevent reckless operations of deep-water rigs by British Petroleum (BP). In the real world, BP -- like Toyota -- adopted a calculus in which cost-saving measures outweigh their risks; in deep-water drilling, that often involves less stringent safety systems and standards. So, even as BP was fined much more often than its rivals for deep-water rig safety violations, BP shareholders enjoyed years of higher returns. If we can't depend on regulation or potential liability to stop reckless corporate decisions, it's time to focus less on the corporate "person" and more on the actual people who make those reckless decisions. The laws of corporations have long shielded a company's decisionmakers from personal liability for corporate decisions, based once again on the idealized view that market competition will reliably drive executives to make decisions based on their shareholders' best interest. But economists have long recognized what's known as the "agent-principal problem" -- that the interests of executive decisionmakers (the agents) can diverge sharply from those of the shareholders (the principals). And how those executives are rewarded for their decisions can make that divergence very wide and deep if, as with both Wall Street and BP, they can earn huge bonuses for steps that boost short-term earnings, even when the decisions that generate those earnings eventually bring down the company. While Paul Volcker and a few others have called for a ban on such compensation schemes, Congress has bowed to Wall Street protests, in a form of "legislative capture" as dangerous as its regulatory counterpart. The result are nearly perfect conditions of moral hazard for America's top executives, especially in critical areas like finance and energy, where their moral hazard can be most dangerous to the rest of us. Since moral hazard affects top decisionmakers, perhaps even more than their institutions in general, the Wall Street and Gulf disasters suggest that it's time to revise the limited personal liability provisions of the corporate form. The government should be able to sue executives personally for decisions that turn very bad for the rest of us -- involving costs of, say, at least $25 billion -- when those decisions entail risks that rise to a standard of negligence. This change could even be part of broader tort liability reform. But whether it is or not, it's time to pierce the veil of the corporate "person" and get to the real people whose personal interests repeatedly lead them to embrace risks that end up harming tens of millions of others. --------------------- Robert Shapiro is a former Under Secretary of Commerce for Economic Affairs in the Clinton administration. From corporation-watch at countercorp.org Sun Jun 20 19:05:42 2010 From: corporation-watch at countercorp.org (Corporation Watch) Date: Sun, 20 Jun 2010 16:05:42 -0700 Subject: [Corp. Watch] Lawsuit: Investment banks misrepresented securities based on over-valued mortgages Message-ID: <1102D21D-44E6-4B22-A781-78F5904E62D0@countercorp.org> The Inflatable Loan Pool By Gretchen Morgenson (NY Times, June 18) -- Amid the legal battles between investors who lost money in mortgage securities and the investment banks that sold the stuff, one thing seems clear: The investment banks appear to be winning a good many of the early skirmishes. But some cases are faring better for individual plaintiffs, with judges allowing them to proceed even as banks ask that they be dismissed. These matters are hard to litigate because investors must persuade the judges overseeing them that their losses were not simply a result of a market crash. Investors must argue, convincingly, that the banks misrepresented the quality of the loans in the pools and made material misstatements about them in prospectuses provided to buyers. Recent filings by two Federal Home Loan Banks -- in San Francisco and Seattle -- offer an intriguing way to clear this high hurdle. Lawyers representing the banks, which bought mortgage securities, have combed through the loan pools looking for discrepancies between the loans' actual characteristics and how they were pitched to investors. You may not be shocked to learn that the analysis found significant differences between what the Home Loan Banks were told about these securities, and what they were sold. But the rate of discrepancies in these pools is surprising. The lawsuits contend that as many as half the loans were inaccurately described in disclosure materials filed with the Securities and Exchange Commission. These findings are compelling because they involve some 525,000 mortgage loans sold by 10 investment banks from 2005 through 2007. And because the research was conducted using a valuation model devised by CoreLogic, an information analytics company that is a trusted source for mortgage loan data, the conclusions are even more credible. The analysis used CoreLogic?s valuation model, called VP4, which is used by many in the mortgage industry to verify accuracy of property appraisals. VP4 homed in on the loan-to-value ratios, a crucial measure in predicting defaults. Investors rely on the ratios because it is well known that the higher the loan relative to an underlying property?s appraised value, the more likely the borrower will walk away when financial troubles arise. The analysis compared the appraised home values at the time the mortgage securities were originated with the loans? values stated in prospectuses. Then the analysts re-assessed the weighted average loan-to-value ratios of the pools? mortgages. They concluded that roughly one-third of the loans were for amounts that were 105 percent or more of the underlying property?s value. Roughly 5.5 percent of the loans in the pools had appraisals that were lower than they should have been. That means inflated appraisals were involved in six times as many loans as were understated appraisals. ?The information in these complaints shows that the disclosure documents for these securities did not describe the collateral accurately,? said David Grais, a lawyer representing the Home Loan Banks in the lawsuits. "Courts have shown great interest in loan-by-loan ... information in cases like these. We think these complaints will satisfy that interest.? The banks are requesting that the firms that sold the securities repurchase them. The San Francisco Home Loan Bank paid $19 billion for the mortgage securities covered by the lawsuit, and the Seattle Home Loan Bank paid $4 billion. It is unclear how much the banks would get if they win their suits. Among the 10 defendants in the cases are Deutsche Bank, Credit Suisse, Merrill Lynch, Countrywide, and UBS. None of these banks would comment for this article. As outlined in the San Francisco Bank?s amended complaint, it did not receive detailed data about the loans in the securities it purchased. Instead, the complaint says, the banks used the loan data to compile statistics about the loans, which were then presented to potential investors. These disclosures were misleading, the San Francisco Bank contends. In one pool with 3,543 loans, for example, VP4 had enough information to evaluate 2,097 loans. Of those, it determined that 1,114 mortgages -- or more than half -- had loan-to-value ratios of 105 percent or more. The valuations on those properties exceeded their true market value by $65 million, the complaint contends. The selling document for that pool said that all of the mortgages had loan-to-value ratios of 100 percent or less, the complaint said. But the CoreLogic analysis identified 169 loans with ratios over 100 percent. The pool prospectus also stated that the weighted average loan-to-value ratio of mortgages in the portion of the security purchased by Home Loan Bank was 69.5 percent. But the loans the CoreLogic model valued had an average ratio of almost 77 percent. It is unclear, of course, how these court cases will turn out. But it certainly is true that the more investors dig, the more they learn how freewheeling the Wall Street mortgage machine was back in the day. Each bit of evidence clearly points to the same lesson: Investors must have access to loan details, and the time to analyze them, before they are likely to want to invest in these kinds of securities again.