"NationsBank and its operating subsidiary, NationsSecurities, conspired to defraud elderly and retired citizens who held maturing certificates of deposit worth hundreds of millions of dollars by selling them toxic derivatives disguised as safe, Government-backed Term Trusts. The Office of the Comptroller of the Currency, during Eugene Ludwig's tenure, identified these fraudulent sales practices while conducting routine examinations in 1994 and 1995, yet did nothing to stop them. Only after the SEC presented the OCC with its findings and conclusions did the OCC act. This begs the question of whether the OCC was negligent, corrupt, or an active participant in wrongdoing by NationsBank. That question deserves a thorough investigation and an answer.

"Unfortunately, I predicted such shenanigans when I conducted Oversight and Investigations hearings into these issues in 1994. This sorry episode provides definitive, albeit regrettable, proof why true separation and functional regulation must be in any financial modernization legislation."

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