NY Atty General invokes Martin Act

There are some deeply nervous and scared investment banks on Wall Street about now, probably wishing they’d never heard the word “subprime.”

“When they start using the Martin Act, you don’t run, you don’t hide, you don’t fight. You settle early, and often,” a veteran of an earlier round of Martin Act subpoenas told us.

With the Martin Act, the prosecutor doesn’t need to prove intent. Think big penalties. Also, the subpoenas “don’t spell out whether matters are civil or criminal in nature,” which could certainly imply that criminal indictments could be forthcoming for those who don’t cooperate.

As with Enron and Worldcom, some of those involved in mortgage and securities fraud should go to prison. Why? Because they are criminals, that’s why.