Why Weren't Any Banker's Prosecuted for Financial Meltdown?

Lost in all the petty bickering above is any common sense discussion of what did or did not happen to bankers.

In our system of justice - in fact nearly all systems of justice - you only prosecute (not persecute) and imprison a person who has knowingly committed or intended to commit a crime. So, you go to jainl for knowingly taking a car that does not belong to you, or for knowingly selling or possessing a pound of heroin, or for knowingly withdrawing money from someone else's bank account and spending it on yourself. On the other hand, if someone plants heroin in your car without your knowledge, you do not go to jail for possession of drugs because you did not knowingly possess the drugs.

Certain crimes allow a lower mental standard that knowingly - like recklessness. So, if your drive your car through a playground at 80 mph and kill a child, you go to jail even if you did not intend to kill a child and even if you swerved to avoid the child. There was a high probability that driving 80 mph in a schoolyard would result in injury or death, so doing so showed a reckless disregard for the value of human life. You go to jail.

There are also some types of crimes where simple negligence will get you punished. However, the types of crimes are administrative in nature and are usually punishable only by monetary fines, not imprisonment. So, for example, if your company through negligence fails to properly maintain pollution control devices at a factory and you emit more soot into the air than the EPA permits, your company gets hit with fines, but nobody goes to prison. So, if an engineer misreads a specification and buys the wrong filter, neither he nor the company CEO goes to jail. Which is fair and smart - otherwise no one would every take those jobs and we would all be screwed.

In the financial sector debacle, a lot of banks execs mad bade decisions. But that was mostly because even they do not fully understand everything that goes on in financial markets. A lot of execs make decisions based on what worked for other banks. So, if Bank A makes a lot of money bundling and selling mortgages, then surely Banks B, C and D will try the same thing.

And, it works. Until one day it doesn't.

And then when companies go broke, everyone wants to point the fingers and demand that SOMEBODY go to jail. But that is nothing more than making someone into a sacrificial lamb. It accomplishes nothing.

This isn't too say that no one KNOWINGLY did wrong. I'm sure there are a lot of instances where somebody hid bad financial reports from investors in violation of the law - or something similar. But that is something that can only be attributed to the individual in question and it must be proved in court - beyond a reasonable doubt.

This isn't too say that no one KNOWINGLY did wrong. I'm sure there are a lot of instances where somebody hid bad financial reports from investors in violation of the law - or something similar. But that is something that can only be attributed to the individual in question and it must be proved in court - beyond a reasonable doubt. Originally Posted by ExNYer

Then maybe they shouldn't have bundled A Paper with B and C Paper and marketed it as A Paper. To me that's knowingly.

So, you go to jainl for knowingly taking a car that does not belong to you, or for knowingly selling or possessing a pound of heroin, or for knowingly withdrawing money from someone else's bank account and spending it on yourself. Originally Posted by ExNYer

Corzine oversaw the illegal siphoning of funds from segregated accounts to cover MF Global’s losses on speculative ventures into European debt. Corzine should be in jail (he meets your prerequisites) and not bundling nearly $1 million for Odumbo’s campaign war chest.

This isn't too say that no one KNOWINGLY did wrong. I'm sure there are a lot of instances where somebody hid bad financial reports from investors in violation of the law - or something similar. . Originally Posted by ExNYer

That is the point ExNYer, nobody is in jail.

get a rope

Neither do you. I don't care for dildos and I absolutely detest vibrators. I don't need them, because unlike your wife, I actually like sex.

The chances that your daddy was a "Banker" are slim to none. But on the off chance he was a multimillionaire, power-brokering fat cat, that explains a lot. A lot of trust fund babies have significant guilt about their social position and wealth. But, alas, the always keep the money, the trophy wife and the River Oaks Country Club membership. Originally Posted by OliviaHoward

Chances that you give a decent BJ are in line with your knowledge of my family.Slim to none

Then maybe they shouldn't have bundled A Paper with B and C Paper and marketed it as A Paper. To me that's knowingly. Originally Posted by OliviaHoward

Knowingly what?

I have no idea what you just said.

Corzine oversaw the illegal siphoning of funds from segregated accounts to cover MF Global’s losses on speculative ventures into European debt. Corzine should be in jail (he meets your prerequisites) and not bundling nearly $1 million for Odumbo’s campaign war chest. Originally Posted by I B Hankering

Perhaps, but that is still being investigated. The justice system is slow. I never said it was perfect.

It took over 6 moths to put Bernie Madoff in jail and he didn't even fight the charges. The evidence was overwhelming, he admitted what he had done, and he pleaded guilty. And still it took 6 months.

Corzine denies everything. You can't just put him in jail because you don't like him (and I don't). He still has the right to a trial and the presumption of innocence.

Also, you say he "oversaw illegal siphoning". That's vague. What do you mean?

IDo you mean he knowingly approved the illegal transfer of funds from segregated accounts to cover MF Global's losses? If so, then he goes to jail if it is proven to be true.

But, if by "oversaw" you mean his subordinates performed the illegal transfer of funds without his knowledge, but he failed to do his job and catch them, then, no, he doesn't go to jail, even if that is true. Being incompetent gets you fired, not imprisoned. At least in our justice system.

That is the point ExNYer, nobody is in jail. Originally Posted by WTF

Really? Are you sure about that? Since 2008, NOBODY has gone to jail for financial crimes?

Or just nobody really rich that you hate went to jail?

Does Bernie Madoff not count?

Really? Are you sure about that? Since 2008, NOBODY has gone to jail for financial crimes?

Or just nobody really rich that you hate went to jail?

Does Bernie Madoff not count? Originally Posted by ExNYer

I thought we were talking about the 2008 meltdown and the funny business that led up to it. I am talking about the revolving door between the Fed and WallStreet.

But Madoff is a good example of just how screwed the SEC is. They looked into him like how many times and found nothing. Some guy robs a bank of 5k and gets 20-30 years and these guys are robbing the public blind and getting nothing but stinking rich. Great article below. Good book too....Griftopia



Nobody goes to jail. This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world's wealth — and nobody went to jail. Nobody, that is, except Bernie Madoff, a flamboyant and pathological celebrity con artist, whose victims happened to be other rich and famous people.
This article appears in the March 3, 2011 issue of Rolling Stone. The issue is available now on newsstands and will appear in the online archive February 18.
The rest of them, all of them, got off. Not a single executive who ran the companies that cooked up and cashed in on the phony financial boom — an industrywide scam that involved the mass sale of mismarked, fraudulent mortgage-backed securities — has ever been convicted. Their names by now are familiar to even the most casual Middle American news consumer: companies like AIG, Goldman Sachs, Lehman Brothers, JP Morgan Chase, Bank of America and Morgan Stanley. Most of these firms were directly involved in elaborate fraud and theft. Lehman Brothers hid billions in loans from its investors. Bank of America lied about billions in bonuses. Goldman Sachs failed to tell clients how it put together the born-to-lose toxic mortgage deals it was selling. What's more, many of these companies had corporate chieftains whose actions cost investors billions — from AIG derivatives chief Joe Cassano, who assured investors they would not lose even "one dollar" just months before his unit imploded, to the $263 million in compensation that former Lehman chief Dick "The Gorilla" Fuld conveniently failed to disclose. Yet not one of them has faced time behind bars.


Read more: http://www.rollingstone.com/politics...#ixzz2310tUMS1

"Insuring" questionable paper for investors with Credit Default Swaps and similar derivatives was what caused the inability of Wall Street to cover their own losses. The the tip of the story was out as early as the last days of the Clinton White House but came to the full attention of Greenspan and others through the efforts of the Head of the Commodity Futures Exchange, Brooksley Born, during the Bush Administration.

There is a belief that only as few as 150 PEOPLE in the entire U.S. totally understood the higher math and intricate workings of the of the most complicated derivatives being developed to back mortgage securities.

The financial MBA'S who expanded on derivatives could not have possibly created a computer model for what happened because of the lack of data available for such a scenario.NONE had lived through the depression nor did their thinking expand far enough to be significantly "outside the box".

It is very much worth watching the entire Frontline program linked here. It is A-Political with plenty of blame to go around. It was a terrifying "Pandora's Box" that could have spelled global financial collapse.

http://www.pbs.org/wgbh/pages/frontline/warning/view/

If you don't watch the whole thing, bookmark it and finishing it later. The sad thing is that the same dangers still exist and "in-fighting" between political parties will only serve to aid in its recurrence.