Chanos: Banks Pulled Off Biggest Heist Ever

Monday, May 11, 2009 10:30 AM

By: Julie Crawshaw

Kynikos Associates head James Chanos says banks knowingly booked inflated earnings when they sold the financial products that led to their downfall — and then those earnings wound up in bonus pools and lining bankers’ pockets.

"It's the heart of one of the greatest heists of all time," Chanos told Forbes.

Chanos says that by booking assets at a higher than market price, banks effectively reported earnings that never existed. Those earnings first went into a bonus pool that was paid out to bank executives.

“There’s no doubt in my mind that this is fraud,â€