“As Wall St. Polices Itself, Prosecutors Use Softer Approach”
New York Times, 7/7/11
The title of this New York Times article is misleading because Wall Street has never policed itself and never will. The article itself (which had a different title yesterday) does an excellent job of explaining how the federal government arrived at its policy of not prosecuting a single top executive of the major banks that made billions of dollars through the criminal practices that caused the nation’s financial, housing and mortgage fraud crises.
Under its new policy the Justice Department routinely signs ”nonprosecution” and “deferred prosecution” agreements with major banks and corporations in the course of settling corporate “white collar” criminal cases. The executives who orchestrated the crimes agree that their corporation will pay money to the government in exchange for immunity from prosecution of the executives. If the government wants to reach a monetary settlement, it must strike a deal with the criminal executives.
A more rational approach would be for the government to prosecute the executives who participated in the corporate crimes as a deterrent to other wayward executives. That was the federal government’s policy before it was changed to protect politically connected bank and corporate executives from prosecution.
It is said that prison is the only consequence that the extremely wealthy fear. The federal government’s current policy leaves millionaire and billionaire corporate executives feeling “prison proof” and free to commit more crimes to become wealthier.
Let’s hope that New York State’s Attorney General Eric Schneiderman, who has undertaken a massive investigation of the crimes committed by the major banks and their executives, will teach these arrogant white collar criminals otherwise.
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