The Reasons Bankers Weren’t Busted

On this little blog of mine I have been featuring stories on what I describe as ticket clippers for many months now. One of the continuing themes of many of them is the way that while banks keep getting hit with huge fines, the bankers that run them have almost always avoided being charged with any offences. It really is a depressing story of how money talks when it comes to the criminal justice system. I recommend you browse through my ticket clipper archive and also read a couple of recent postings on Bloomberg View.
Here Bloomberg View columnist Barry Ritholtz, who has been following the absence of legal prosecutions since 2008 and posted on that subject more than 500 times, reviews the events of the financial crisis showing that the law was broken repeatedly by bankers.
Political access and lobbying go part way toward explaining the absence of prosecutions and, therefore, the lack of convictions. To understand why there were no convictions of senior bankers, you need to understand a bit of criminal law in the U.S. The American form of jurisprudence requires a criminal indictment to bring someone to trial. No indictment, no trial, no conviction. Where bankers and their lawyers have been so successful is stopping prosecutions before they begin. You don’t get to the conviction part if prosecutors don’t bring indictments.
In The Biggest Lie of the New Century Ritholtz argues that the biggest reason so many financial felons escaped justice was because they “dumped the cost of their criminal activities on you, the shareholder (never mind the taxpayer).” He then takes his readers on a brief survey of some of the more egregious acts of wrongdoing – Foreclosure fraudMortgage underwriting: where defects were knowingly ignored; Money Laundering of staggering sums of money for drug dealers and terrorists; Market manipulation where prices were either improperly manipulated or illegally rigged, with knowledge of the bank executives and the traders they employed and supervised; Fraud, skimming and bid-rigging of the good old-fashioned kind; Accounting fraud where some executives at banks cooked their books.
And the author’s conclusion of his two-part survey?
So next time you hear the claim that “there were no crimes committed by bankers,” just remember that this may be the biggest lie of the 21st century.

Comments

Popular posts from this blog

Is Scott Morrison getting ahead of Malcolm Turnbull in the GST debate?

Prime Minister Scott Morrison under pressure as the question about knowledge of a rape gets embarrassing

Remembering that Labor only lost last time because of Bill Shorten