Times Ombud Calls Out Shoddy Financial Reporting

The New York Times public editor Margaret Sullivan criticizes their coverage of Bank of America's latest financial results, because they completely ignored the massive fines for fraud:

Reading The Times’s coverage of Bank of America’s quarterly loss last week, I almost felt sorry for the financial behemoth. It has mortgage troubles, you see. It has onerous legal costs.

“The disappointing news shows how Bank of America is still paying for its mortgage problems nearly six years after the financial crisis,” the article said.

I thought of sending a small check to help or at least conveying my sympathy.

I really should have remembered what this is all about because it was only last month that Bank of America settled a lawsuit that claimed the bank had committed mortgage fraud. The cost of the settlement? More than $9 billion. Bank of America was one of the banks that sold mortgage securities backed by subprime mortgages, which went south during the housing and financial crises – in many cases driving American consumers into financial ruin.

Some Times readers wrote to me about it, pointing out that there was more to the story. They hadn’t forgotten what happened, it seemed. Jamison Wilcox, for example, noted in an email that he was “dismayed to see the term ‘legal costs’ given a vague and euphemistic meaning – and repeated in a headline – as a short replacement for the specific identification of monies paid out … as a legal consequence of wrongful conduct by a corporation or bank.”

………

The language certainly isn’t overheated. In fact, nowhere in this article is there any straightforward mention of what really caused these legal troubles and costs.

It says only this: “At the heart of the additional legal expenses was a $6.3 billion settlement that the bank announced last month to settle a lawsuit arising from troubled mortgage-backed securities it bundled and sold to Fannie Mae and Freddie Mac before the financial crisis.” (The bank also agreed to buy back $3.2 billion in mortgage securities, bringing the penalties to $9.5 billion.)

Bundles and troubles and costs, yes. Fraud accusations, not so much.

I do not think that this will make a difference, though.