After been stunned reading about the Federal Reserve regs that might lead to asset-stripping of local governmentsI was very glad to read come potentially awesome good news.
H/T to Alan Grayson FB page for the link to this article in Salon
Finally, Wall Street gets put on trial: We can still hold the 0.1 percent responsible for tanking the economy
Too Big To Fail bailouts let them get away with it. The amazing result of California fraud trial could change that
Thomas Frank
Man, would I love to see that headline come true. I admit to having little faith in the Obama Administration and the DOJ holding those individuals who caused the financial crisis and the mortgage crisis for their criminal acts that I had just about given up on justice.
However Thomas Frank says a trial in California court may show that its not too late.
“Benjamin Wagner, a U.S. Attorney who is actively prosecuting mortgage fraud cases in Sacramento, Calif., points out that banks lose money when a loan turns out to be fraudulent,” reported a now-famous 2010 story in the Huffington Post. “But convincing a jury that executives intended to make fraudulent loans, and thus should be held criminally responsible, may be too difficult of a hurdle for prosecutors. ‘It doesn’t make any sense to me that they would be deliberately defrauding themselves,’ Wagner said.”
So forget those thousands of hours of Congressional investigation and those thousands of pages of journalism on the crisis. It doesn’t make any sense to the man in charge. No jury would be convinced. Case closed.
As it happens, a trial just ended in Sacramento in whicha jury was convinced that “executives intended to make fraudulent loans.”Here’s the thing, though: It wasn’t the government that made the case against the financiers; it was the defendants.
The article is well worth reading, and no its does not offer a sure fire guarantee that the banksters will soon be in jail. It does offer a fascinating story of a trial the may just offer a way to accountability.
Liars Loans and Control Fraud
The right blames the financial crisis on the poor who lied on their loan applications and want them brought to justice, but how about the banks who encouraged and approved the loans for the profits they would bring?
Do you see what I’m saying? Executives do not always share the interests of the corporation that employs them. They weren’t “defrauding themselves,” as our federal protector laughs, they were defrauding the suckers that paid their bonuses, the shareholders that invested in them, the European pension funds that believed their excreta was Grade A Prime.
The name for this kind of scheme is a “control fraud”; it happens when the officers who control a firm use their power over the firm to enrich themselves while driving the firm itself to the boneyard. The country has seen control frauds many times before; indeed, the man who invented the term was a regulator of S&Ls during the S&L meltdown of the 1980s, and he saw the pattern so many times back then that he wrote a book about it. I am referring to my friend Bill Black, a professor of economics and law at the University of Missouri-Kansas City and also a Distinguished Scholar in Residence for Financial Regulation at the University of Minnesota’s School of Law. Control fraud, Black says, always follows the same recipe, with banks growing rapidly by making vast numbers of extremely risky loans, executives immediately getting rich with big bonuses, and the bank eventually collapsing under the weight of those malicious loans.
The article includes testimony from Bill Black which is as you might imagine quite tasty.
With the militarization of police in this country pitchforks for the rich are even more out of the question imo.
Perhaps we still can work through the courts and get some accountability and prevent another crash?