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why no financial crisis prosecutions? ex-justice official says it's just too hard

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xchrom Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-09-11 08:11 AM
Original message
why no financial crisis prosecutions? ex-justice official says it's just too hard
http://www.nationofchange.org/why-no-financial-crisis-p...

Its an issue we and others have noted again and again: Years after the financial crisis, there have still been no prosecutions of top executives at the major players in the financial crisis.

Whys that? Well, according to a now-departed Justice Department official who used to be in charge of investigating such matters, the Justice Department has decided that holding top Wall Street executives criminally accountable is too difficult a task.

David Cardona, who recently left the FBI for a job at the Securities and Exchange Commission, told the Wall Street Journal that bringing financial wrongdoing to account is better left to regulators, who can bring civil cases. Civil cases, of course, can produce penalties from the banks -- as well as promises to be on better behavior -- but dont put any executives behind bars. Heres the Journal:

'While at the FBI, Mr. Cardona oversaw dozens of criminal probes of large financial firms. The FBI's probes haven't led to any successful prosecutions of high-profile executives in relation to the financial crisis, despite demands from some lawmakers and angry Americans. In contrast, the SEC has filed crisis-related civil-fraud cases against 81 firms and individuals, and it has negotiated almost $2 billion in penalties in cases that have been settled.'
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marmar Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-09-11 08:16 AM
Response to Original message
1. 'bringing financial wrongdoing to account is better left to regulators,'

Reason 1,345 why we are completely f**ked.



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xchrom Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-09-11 08:21 AM
Response to Reply #1
2. that would be the revolving door regulators?
the guys that broke it asked to fix it?
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leveymg Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-09-11 08:22 AM
Response to Original message
3. The simple fact is, DOJ and SEC exist to serve and protect Wall Street. Prosecuting the top
Edited on Fri Dec-09-11 08:33 AM by leveymg
executives and bankers is unthinkable, no matter what they do. Their immunity is as absolute as that of the President and the Attorney General.
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azul Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-09-11 09:54 AM
Response to Reply #3
10. And the fact that congress exists to write laws for special interests
Edited on Fri Dec-09-11 09:58 AM by azul
lead to the financial institutions' immunity before they acted: what they did was mostly legal. And the whole scheme was going well, everybody making money, until it collapsed.

It was a good crooked scheme in that when people sue to get back their gambling winnings, the swindlers get to laugh and wave back. They did it legally with some well-placed investments in legislation.

And the only condign response is OWS, and the politicians and financial barons are trying, furiously, not to get the message.
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leveymg Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-09-11 01:18 PM
Response to Reply #10
13. Any society that has become that fundamentally corrupt can't last long
Edited on Fri Dec-09-11 01:28 PM by leveymg
Either major crimes against society are punished in some way -- basic justice is essential to the legitimacy of any social order -- or that society soon collapses and is subsumed within another competing system. That's the dynamic of decline and fall of empires observed over and over again, the world over. A widely-shared perception of legitimacy is everything.

The elites presently running this system are particularly heedless of the lessons of history in how they conduct themselves and wield power without reference to any need for the appearance of legitimacy -- even wealth is a form of power that this group does not seem to know how to manage competently.

I would argue this appears the most ill-educated, arrogant, insular, and incompetent group of elites in the Anglo-American line, which is now coming to a crashing end. They are a tribe of Post-modern Primatives, and they are like the Maya. They know the end is coming, but their response is simply to increase the rate of human sacrifices.
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On the Road Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-09-11 08:32 AM
Response to Original message
4. The FBI Doesn't Want Unsuccessful Prosecutions
The details of these cases are complex, the laws are opaque to the average juror, the defense lawyers are the best money can buy, and a jury is likely to have mixed loyalties. You need all twelve jurors to agree that a specific law was violated beyond a reasonable doubt.

Civil fraud cases, on the other hand, have a much lower burden of proof -- only 50% probability. It greatly favors the prosecution, which is a major reason most of these cases are civil.
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Recursion Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-09-11 09:42 AM
Response to Reply #4
9. It's hard to find a specific law that was broken by a specific person
The scandal isn't so much what laws were broken as what behavior was actually legal.
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jtuck004 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-09-11 01:18 PM
Response to Reply #9
14. The FBI notified the government of the fraud years ago, so we know exactly what laws were broken.
Edited on Fri Dec-09-11 01:22 PM by jtuck004
On the other hand, the fact that we employ some of the very people who committed the largest fraud this country has ever seen is a far more likely explanation. For example, little Timmy Geithner's aide Sperling, who made over $800,000 salary and over $150,000 for speeches while he worked for Goldman Sachs is now paid by the taxpayers via the Treasury department. To investigate would take a criminal investigation of the people who sit in chairs down the block from other federal employees in the FBI.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=...

Maybe TPTB can't figure out how to make up for the loss of income that would occur after putting the good of the country above their personal and political ambitions? Maybe that's the reason they are purposely not staffing the positions of those who would investigate, to make sure it doesn't happen?

There are thousands upon thousands of cases of fraud at the level of upper management in the investment banks which the FBI identified and notified the government about, and fraud is a crime. Add in the hundreds of thousands of cases of fraud in the mortgage process and we could be prosecuting people for the next 20 years. The Federal Housing Finance Agency just filed a "civil" lawsuit to recover some money from 17 of the largest banks that committed these criminal acts, yet not one criminal referral for their actions has been made. (Hey, it's a lot easier to put millions of black folk in jail, eh? Nobody every lost their political job for that).

We put 1200 people in jail during the S&L crisis for the EXACT same behavior, that of running their companies as a fraud for personal profit:

Read here: http://www.huffingtonpost.com/william-k-black/the-two-d...

Listen here - This is a GREAT onpoint show, btw - http://www.wbur.org/media-player?url=http://onpoint.wbu...

The people in power are friends of and in bed with the perpetrators. They walk the halls, drink coffee, eat meals and party with them. Perhaps they see the political cost to themselves of a criminal investigation as being too great? They are getting paid very, very well, taking in very large donations from these criminals, so the proceeds from those criminal actions fatten their bank acocunts. Screwing the American people, letting 2.5 million people go into poverty in the past year, 5 million people losing their homes with another 5 million to come, seems to be far more acceptable, since it lets them keep their political job and fat bank account.

It's not too big, and the behaviors have been identified. There is no need to make excuses for these bastards, if one cares more about the country than their own ambitions and personal wealth.
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xchrom Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-09-11 01:58 PM
Response to Reply #14
15. people forget -- the government hired a number of people just to work
and get prosecutions in the s&l crisis.

what was it 1,000 extra people?
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jtuck004 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-09-11 04:17 PM
Response to Reply #15
16. Yes, something like that. Prof. Black talks about that in the audio

link above. They transferred most of them out for the changes in Homeland Security, but have refused to staff them with the levels needed to investigate and prosecurt this crime.

Ironic, because we are weaker as a nation, with much insecurity, because they are told to spend their time running around looking for criminals that might hurt us someday while ignoring the big cancer in our midst.
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dixiegrrrrl Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-09-11 08:37 AM
Response to Original message
5. "doing our job is too hard"..?????!!!???
Wow...that WOULD explain why Congress doesn't work anymore.
Interestingly, same excuse that FEMA used since 2001.


Few people are aware, btw, that the SEC is legally limited in how much in fines in can charge per case.

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hobbit709 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-09-11 08:45 AM
Response to Original message
6. But they have no problem going after MM
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DCKit Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-09-11 09:17 AM
Response to Original message
7. "Negotiated Penalites" = "The Cost of Doing Business"
If it doesn't HURT, they're going to keep doing it.
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xchrom Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-09-11 09:22 AM
Response to Original message
8. Jon Corzine's Relationship With CFTC Chair Gary Gensler Probed
http://www.rollingstone.com/politics/blogs/taibblog/jon...

---snip---

This whole issue smacks of the improper communications between other former Wall Street co-workers like Hank Paulson and Lloyd Blankfein. More and more, it appears that, as a matter of routine, federal regulators like Paulson (in 2008) and, later, Gensler reach out to old friends on Wall Street to negotiate/discuss the timing and the form of various policy changes, bailouts, and other regulatory matters. Inside information seemingly is traded with remarkable casualness.

This is one of those issues where there's no point in calling for more regulations. No matter what laws we have, we can't have regulatory heads breezily chatting about their enforcement plans with former co-workers who have huge financial interests resting upon their decisions. The Paulson case, in which information about the rescue of Fannie and Freddie was casually disclosed to a group of hedge fund chiefs before the public knew about it, was a far worse thing than what Gensler is accused of. Gensler, despite his Goldman pedigree, has generally gotten good reviews from Wall Street reform types, and has demonstrated a willingness to help tighten up abuses in the derivatives and commodities markets (including walking back deregulatory actions in the derivatives world that he himself had a role in creating back in the Clinton days). But this business with Corzine will likely be a black eye for him, and rightly so.

Read more: http://www.rollingstone.com/politics/blogs/taibblog/jon...
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OnyxCollie Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-09-11 10:43 AM
Response to Original message
11. Just like it wouldn't be "fair"
to go after low-level intelligence officials who facilitated TORTURE because it might act as a stepping stone to those individuals who really matter.
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xchrom Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-09-11 10:49 AM
Response to Reply #11
12. If we were ever a nation interested in equally
Applied justice - we certainly aren't now.
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angstlessk Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-09-11 05:58 PM
Response to Original message
17. Hard is not impossible..it's just hard..hell I am doing a project that's hard...
I have been working on it for months..it goes from grunt work to thinking, back to grunt work...it's hard..it's not impossible...HARD IS NO EXCUSE!
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classysassy Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-09-11 07:21 PM
Response to Original message
18. A Democracy,we are not
The criminals and their enablers are in charge,we the average citizens are at the mercy of the crooks and they are without mercy.
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jtuck004 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-09-11 07:55 PM
Response to Original message
19. I'm seriously of the mind that unless we investigate and prosecute, it won't
matter much what any of us do in the future. Not a whit.
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