7 Things About Prosecuting Wall Street You Wanted to Know (But Were Too Depressed to Ask)
|November 16, 2013||Posted by Staff under Corruption, Financial|
Here are seven things about Wall Street crime and Washington “justice” you might have wanted to know. It’s true that there’s a shortage of justice where bankers are concerned; the prosecuting has been tepid. But don’t get depressed. Get serious about demanding change.
1. Attorney General Holder said the Justice Department can’t indict too-big-to-fail banks because it would endanger the nation’s, and possible the world’s, economy. Criminal indictments against bankers are necessary both for the cause of justice, and the safety of our economy. Why did Holder make these comments? It’s called misdirection. It gets everybody thinking about one question — Why aren’t they indicting banks? — so they won’t think about a more important question: Why aren’t they indicting bankers?
2. If hurting ‘too big to fail’ banks is such a concern, why did the Justice Department and the SEC just sue Bank of America? Shareholders bear the costs and the consequences of these suits, which are directed against the banks as institutions — even when the suit in question involves fraud against the shareholders themselves. That means the executives who profit from criminal behavior have absolutely no reason not to commit those crimes again and again and again — which, as the record shows, is exactly what they have been doing.
Suits like these do not endanger the institution being sued. The amounts of money involved — $850 million, in this case — sound large. But they’re negligible when compared to the revenue at America’s bloated mega-banks.
3. Why sue Bank of America at all, if they’re in the banks’ pockets? Washington officials have multiple constituencies, presumably including wronged investors who want restitution of some kind. They presumably want to make sure the banks’ exposure is kept manageable — from the bank’s perspective — but don’t want to anger the investors any more than necessary.
4. The Justice Department has said it’s too hard to get convictions in financial fraud cases. More than 1,000 people were convicted after the much smaller savings and loan scandal of the 1980s. It wasn’t “too hard” to get a conviction then. But then, in those days they were trying.
A rare courtroom victory against Goldman Sachs was achieved just last week. Needless to say, it was not against a Goldman executive, but against a relatively junior employee, trader “Fab” Tourre. It was not a criminal prosecution, but a civil case. And the verdict was won by the SEC, not the Justice Department.
5. Why don’t they want to indict bank executives? Both Attorney General Holder and his recently departed No. 2, Lanny Breuer, had high-priced jobs defending Wall Street bank executives. Breuer has already cashed out and gone back to Covington & Burling, Holder’s once (and future?) firm, with a special title and position created especially for him.
As for elected officials, bank executives write very big campaign checks. They also hobnob with powerful politicians. When JPMorgan Chase CEO Jamie Dimon testified before the Senate Banking Committee earlier this year, only two of the senators facing him had not received campaign contributions from his bank. Dimon was also called “Obama’s Favorite Banker” for a while.
Another executive with a large financial operation, GE’s Jeffrey Immelt, was named head of the President’s ‘Jobs Council.’ Immelt was responsible for GE Capital while municipalities were being criminally defrauded in the case which became United States of America v. Carollo, Goldberg and Grimm.
6. Why are they saying that the SEC’s “winding down” its fraud investigations? Impending statute of limitations makes it more difficult to keep pursuing pre-2008 misdeeds. The Justice Department and SEC chose to “run out the clock” on Wall Street’s crimes.
7. What can we do about it?
A full investigation of Wall Street crimes.
Expanded powers for the Consumer Financial Protection Bureau.
No more deals where banks “neither admit nor deny wrongdoing.”
Ed. Note: All well and good but we can’t turn back the clock and can’t keep faith in regulations that come and go. We need to shrink banks and expand ourselves. Stop sending fat mortgages to Wall Street. Instead, keep our payments for land and resources recirculating in our community. Levy land taxes in lieu of others or institute Land Dues to fund a rent dividend paid to residents and citizens. People will be better off, have more power that comes from greater income, and banks will have less, devolving into human-scale.