Tuesday, August 01, 2017

Abacus: Small Enough to Jail

In the early 21st century the easing of mortgage criteria led to bigger mortgages and a housing bubble. Massive lobbying by the finance industry to ensure banking deregulation, lack of enforcement of remaining banking regulations, bonus payouts to reward of risk taking, lack of consequence for failure, the reselling of sub-prime mortgages as high credit rating investments, overrating of investments and banks by ratings agencies, insurance policies on these investments, fraud and sub-prime ethics in banking and finance industry led to the financial crisis of 2008. A lot of the largest companies involved declared bankruptcy. These companies were considered too large to fail and were bailed out by the US government. 🎥

Many people were expecting those companies that broke the rules and regulators that failed to do their jobs would be prosecuted. In 2012 New York prosecutors indited a bank on fraud charges relating to mortgages, the only US bank prosecuted in relation to the global financial crisis. Abacus: Small Enough to Jail is the story of that prosecution.

Abacus Federal Savings Bank was formed in 1984 by Shanghai born lawyer Thomas Sung, who arrived in New York in the early 1950s. After a successful legal career, he saw a gap in the market where existing banks in New York were reluctant to lend to Chinese people. In 2010 Abacus fired a loan officer for asking for large tips for processing a mortgage application. They uncovered other falsifications on loan documents and reported to the banking regulator. The New York District Attorney's Office brought charges not only against the loan officer but against many other staff from the loan office and the bank itself. The investigation lasted 5 years.

This film is more than a story of a legal case about mortgage fraud. It is a family film. Two of Thomas Sung's daughters worked at the bank and another worked for the New York District Attorney's Office. The whole family has strong opinions about the case, which they often voice at the same time. They took the fight seriously and many of the interviews are with the family as they ate takeaways at the office or at local Chinese restaurants.

While the film is from the point of view of the Sung family and Abacus the prosecutors including Cyrus Vance Jr give their points of view as well.

Ian's rating 4/5

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