Question by ideogenetic: Why did the Federal Government sue the Wall Street banks that sold Fannie and Freddie bad mortgages?
Shouldn’t the “buyer beware”* or is there a role for regulation to prevent criminal economic activity in the debt securitization markets that lead to catastrophic financial collapses?

* Since S&P had ‘AAA’ ratings on the junk paper, how would the buyer know?
For those who missed it:
“Federal Regulators Sue Big Banks Over Mortgages”
http://www.nytimes.com/2011/09/03/business/bank-suits-over-mortgages-are-filed.html

Best answer:

Answer by TheOnlyBeldin
Because Barney won’t let them go after the true culprit: Fannie and Freddie themselves.

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