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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region Forumsthe justice department's 'war on wall street' - still no criminal charges
http://www.newyorker.com/online/blogs/johncassidy/2013/08/the-justice-departments-war-on-wall-street-still-no-criminal-charges.htmlIt took them a while, but the Feds are finally going after some of the countrys biggest banks for alleged wrongdoing during the great housing and credit bubble. In the past few days, the Department of Justice has sued Bank of America for willfully understating the risks attached to hundreds of millions of mortgage-backed securities it sold in 2007, and J. P. Morgan Chase has revealed that two different U.S. attorneys offices, one in California and one in Philadelphia, are investigating whether it broke securities laws and duped investors with some of the mortgage deals it put together.
But while the new cases are significant and likely to go on for some time, they dont answer the question of whether anybody on Wall Street will ever end up in court, or face the possibility of prison time, on criminal charges arising from the mortgage mess. My take: there is no need for anyone on Wall Street to lose much sleep, and that includes Brian Moynihan, the chief executive of Bank of America, and Jamie Dimon, the head of J. P. Morgan. About the worst that is likely to happen is that the two big banks will be forced to pay some hefty fines, which, with both making billions of dollars of profit in the latest quarter, they can easily afford.
For years now, critics have accused the Justice Department of going easy on the bankers, whose actions during the housing and credit bubble helped bring about the U.S.s deepest recession since the nineteen-thirties. The D.O.J.s response has always been that it didnt have enough evidence to prove criminal intent on the part of traders, investment bankers, and senior executives at big Wall Street firms, and that, without such evidence, it would likely lose in court if it went ahead with criminal cases.
Despite a recent change of leadership in the Justice Departments financial-fraud task force, this still appears to be the agencys position. The new case against Bank of America is a civil one, of the sort that usually gets settled without any admission of wrongdoing. And, according to the Times, the criminal investigation of J. P. Morgan, which is centered on alleged wrongdoing by mortgage bankers at Washington Mutual, acquired by J. P. Morgan in 2008, is reportedly in its early stages. It could well end up going nowhere. (The U.S. attorneys office that is conducting the criminal inquiry is also running a civil investigation that seems to have made more progress.)
forestpath
(3,102 posts)Lint Head
(15,064 posts)They will continue to figure in their annual expenses paying fines for criminal activity and it will be chump change. The banks should be nationalized and insurance companies should be banned from healthcare.
AnotherMcIntosh
(11,064 posts)Triana
(22,666 posts)...
According to the New York Times: "Mr. Breuer is expected to earn about $4 million in his first year at Covington. In addition to representing clients, he will serve as an ambassador of sorts for the firm as it seeks to grow overseas."
As BuzzFlash at Truthout has speculated before, one can argue (and the same holds true for Eric Holder, also a Covington & Burling alumni appointee), Breuer was building his value in the marketplace at the DOJ, while Wall Street executives who nearly destroyed the American economy went unprosecuted. And his future value to his old white collar defense firm was dependent, in large part, on him not angering the people who would be the clients of Covington & Burling when he left the Department of Justice. The result, one can contend: no prosecutions of banks "too big to fail" execs as publicly stated as a policy by both Breuer and Holder.
This isn't just a revolving door; one can argue it's a dereliction of legal responsibility by an employee of the people of the United States. One can proffer that it's a cash-in career move by a resume climber who was careful not to bite the hands that will write the checks that will feed him on a lavish scale.
Breuer isn't the least bit sheepish about grabbing the brass ring after failing to hold those responsible for nearly sinking the economy criminally accountable. According to the website Main Justice,
Breuer said that he will also maintain his white collar clients, which he hope to grow following his stint as the Criminal Division's longest-serving leader in recent history. Moving forward, he expects to have individual and corporate clients in areas such as foreign bribery, money laundering, export control and securities law and whistle blower cases.
Breuer has spent a combined total of approximately two decades at Covington & Burling.
THE REST:
http://www.truth-out.org/buzzflash/commentary/item/17885-lanny-breuer-cashes-in-after-not-prosecuting-wall-street-execs-will-receive-approximate-salary-of-4-million-dollars
alc
(1,151 posts)I didn't work on wall street, but worked a few years on a fortune 100 company. A lot of effort by a lot of people went into creating reports and documenting processes to keep upper management out of any legal trouble no matter what happened. Some laws even state "file these documents yearly or CEO may go to jail if the company does something illegal". The sheer amount of laws is what necessitates a large staff (lawyers & workers) to protect CE*s.
I have no reason to think anyone in my company did anything illegal. But, I can tell you that if they wanted to it could have been done pretty easily in a way that was almost impossible to prosecute because of all the documentation saying the upper management did everything "right".
Add to that the fact that there are contradictory laws, laws that don't make sense in many cases they are applied (annual reports for things we don't do), and laws that can't be followed and a prosecutor is pretty much in a no-win situation when facing a CEO with literally 100s of lawyers, 100,000s pages of reports and documentation clearing him, and 100s of employees who will swear (honestly) that they were told monthly how to follow the laws and updated frequently about changes and told at least quarterly by the CEO himself (personally or on video) that they needed to follow the laws.
We need dozens of pages of laws rather than 100s of 1000s that say things more like
"If your company does X and a jury thinks you (CEO) are responsible then you go to jail"
"And, you can be held responsible even if you have thousands of pages of documentation saying otherwise. The buck stops with you so you need to prevent it, not just talk about preventing it"
And with only dozens of laws they shouldn't be able to cite a contradictory law which gets them off the hook.