Thursday, November 15, 2012

No Criminal Charges Despite Criminal Misdeeds

Why aren't the Wall Street banksters being charged criminally for the fraud and deception at the heart of the financial crisis. Two prominent economists have asserted publicly that criminal action was involved in the crisis:

Kenneth Galbraith on Financial Industry Criminality and Economists' Lapses

William Black on Financial Criminality:

Here is what Kenneth Galbraith had to say about criminal behaviors in the crisis:

[Excerpted] "Ask yourselves: is it possible for mortgage originators, ratings agencies, underwriters, insurers and supervising agencies NOT to have known that the system of housing finance had become infested with fraud? Every statistical indicator of fraudulent practice – growth and profitability – suggests otherwise. Every examination of the record so far suggests otherwise. The very language in use: "liars' loans," "ninja loans," "neutron loans," and "toxic waste," tells you that people knew. I have also heard the expression, "IBG,YBG;" the meaning of that bit of code was: "I'll be gone, you'll be gone."

Yet, as The Washington Post reports, no criminal charges were filed against AIG executives:

Now we learn that no criminal charges will be filed against JP Morgan:

“No Individual Charges in Probe of JP Morgan” by J. Eaglesham and D. Fitzpatrick (2012, November 12. The Wall Street Journal, p. C1, 5 
[Excerpted]: J.P. Morgan’s payment is expected to be significantly less than the $550 million paid by Goldman Sachs Group in 2010 to settle claims by the SEC that it misled investors in a type of mortgage-bond deal called a collateralized debt obligation, Goldman didn’t admit or deny wrongdoing”


Wall Street Journal: "Missing: Stats on Crisis Convictions"  Wall Street Journal May 14, 2012 p. C1, C5 by Jean Eaglesham 
Excerpt from article:"It is a question that has been asked time and time again since the financial crisis: How many executives have been convicted of criminal wrongdoing related to the tumultuous events of 2008-2009? The Justice Department doesn't know the answer...."

Majia here: Apparently the Justice Dept. does not keep data on the number of board-level prosecutions.

One has to wonder why not? Black is quoted in the article as stating that the government used to keep statistics on prosecutions.

I think the most notable quote from the article is this passage :

"But officials said the scarcity of crisis-related prosecutions might reflect a lack of criminal behavior, rather than any failure of law enforcement" (C5).


Criminal behavior is at the heart of the crisis and it continues with the Libor scandal, MF Global, etc.

In a different article, Black concludes that the FBI is NO longer chasing white collar criminals:

William Black: Why Nobody Went to Jail During the Credit Crisis: The FBI is no longer chasing white collar criminals 

I gather that crime does pay, if you are a Wall Street Bankster.

Majia's Blog: The Financial Crisis and the Shock Doctrine
Aug 20, 2012
For example, Jean Eaglesham asks in the Wall Street Journal: "It is a question that has been asked time and time again since the financial crisis: How many executives have been convicted of criminal wrongdoing related to ...

1 comment:

  1. The real criminals of the financial crisis are Andrew Cuomo, Barney Frank and Nancy Pelosi, who ignores Bush' seventeen requests to fix Fannie & Freddie - Yet Bush, Bernancke and Paulson saved us from another Great Depression.


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