- Report: Civil Suits, Yes, Even Some Prosecutions, But Very Few Big Cases re Financial Meltdown
Report: Civil Suits, Yes, Even Some Prosecutions, But Very Few Big Cases re Financial Meltdown
Posted May 23, 2011 5:17 PM CDT
By Martha Neil
Are the criminal activities at big banks that led to the financial meltdown of 2008 simply too hard to prove? Or, because of relaxed government regulation in recent years, did they simply not exist?
Or, as some say, will it take time, as with Enron, to unravel what occurred and take appropriate prosecutorial action?
Whatever the reason, high-level criminal cases against those in control of the financial institutions whose activities led to the near-collapse of the United States economy more than two years ago have been virtually nonexistent, Bloomberg reports.
Civil suits have been brought at both at the state and federal levels, and securities fraud prosecutions for insider trading include the recent conviction of hedge fund co-founder Raj Rajaratnam.
But aside from the unsuccessful prosecution of two Bear Stearns executives, there is no comparable example of corporate feet being held to the fire over bank lending practices, according to the news agency.
Among those who have criticized the federal government for a perceived lack of aggression in pursuing high-level financial crimes are a number of lawmakers, including U.S. Rep. Zoe Lofgren of California.
"The department is spending its resources prosecuting nannies and busboys who are trying to get back to their families,” she said at a hearing earlier this month. “And yet we have not brought any prosecutions on the bandits on Wall Street who brought the nation and the world to the brink of financial disaster.”
ABAJournal.com: "Despite Economic Debacle, Criminal Cases are Rare and Hard to Prove"
ABAJournal.com: "Plaintiffs Lawyers Say Bear Stearns May Have Double-Dipped on Defaulted Mortgages"
Bloomberg: "JPMorgan, UBS, Deutsche Bank Said to Be Added to New York’s Mortgage Probe"