U.S. District Court Judge Jed Rakoff, the federal judge who has previously tossed SEC fines for Too Big to Jail banks as inadequate, blasted the Justice Department for failing to bring criminal fraud prosecutions for crimes committed during the Great Recession.
Considering the five year statute of limitations is approaching, it is obvious that there will be no prosecutions, an outrageous dereliction of duty by the Justice Department and Obama administration and, considering the blatant revolving door between government and the financial sector, see former Treasury Secretary Geitner and many others for evidence of that, the American public can only stand by looking like idiots while observing this perfectly legal corruption and its horrific results.
In striking contrast with these past prosecutions, not a single high-level executive has been successfully prosecuted in connection with the recent financial crisis, and given the fact that most of the relevant criminal provisions are governed by a five-year statute of limitations, it appears likely that none will be. It may not be too soon, therefore, to ask why.Instead of focusing on the corruption, the New York Review of Books article discusses defunding of government (demanded by Republicans 2011 or else they would wreck the world economy) as the primary reason there are no bankers in jail. (Instead these criminals are back in the saddle doing the same crap.)
But the stated opinion of those government entities asked to examine the financial crisis overall is not that no fraud was committed. Quite the contrary. For example, the Financial Crisis Inquiry Commission, in its final report, uses variants of the word “fraud” no fewer than 157 times in describing what led to the crisis, concluding that there was a “systemic breakdown,” not just in accountability, but also in ethical behavior.
As the commission found, the signs of fraud were everywhere to be seen, with the number of reports of suspected mortgage fraud rising twenty-fold between 1996 and 2005 and then doubling again in the next four years.
As the five-year statute of limitations nears for crimes that led to the Great Recession, a federal judge wants to know why no high-level executives have been prosecuted. [snip]H/T Raw Story.
He dismisses the Department of Justice rationale that proving "intent" to defraud in the financial crisis cases is difficult: There's plenty of evidence in the public record that banking executives knew the mortgage securities they were hawking as AAA were junk.
He doesn't buy the excuse that criminal prosecutions involving major financial firms might have damaged the economy -- no one has ever contended that a big firm would collapse just because its high-level executives were prosecuted. And he notes that the government doesn't dispute that some of these executives may be guilty -- it just comes up with excuses for not prosecuting.
"Companies do not commit crimes," Rakoff observes; "only their agents do...So why not prosecute the agent who actually committed the crime?" He's witheringly skeptical of prosecutions of corporations, which usually yield some nominal fines and an agreement that the company set up an internal "compliance" department. "The future deterrent value of successfully prosecuting individuals far outweighs the prophylactic benefits of imposing internal compliance measures that are often little more than window-dressing."