Wall Street "Justice": AIG Evidence Raises the Question, "Where Are the Indictments?"

[depakid]

A disturbing pattern seems to be forming in Washington: Evidence of financial wrongdoing leads to settlements with large banking institutions, but with no apparent move to indict the individuals responsible.

AIG agreed to the largest settlements in history, yet despite seemingly compelling evidence the Justice Department decided not to prosecute anyone. Now Goldman Sachs has agreed to a settlement that amounts to little more than chump change compared to the bonuses it paid last year. People should be asking: Where are the indictments?

The SEC appeared to engaged in a little Wall Street-style overselling last week when its Director of Enforcement said that "half a billion dollars ($500 million) is the largest penalty ever assessed against a financial services firm in the history of the SEC." Actually, AIG paid the SEC considerably more - $800 billion - as part of a $1.6 billion total settlement. AIG also settled a class action suit in the State of Ohio last week for $725 million.

Yet, despite what appears to be smoking-gun-like evidence, the Justice Department quietly let it be known there would be no indictments in that case. Now the DoJ has reportedly received a referral for a criminal investigation of Goldman from the SEC. How aggressively will that case be pursued?

More: http://www.huffingtonpost.com/rj-eskow/wall-street-justice-aig-e_b_651865.html

[marmar]

1. Show of hands.....Who's surprised by this?

As Dick Durbin observed.....They run the place.

[DJ13]

3. I am

surprised that someone here unrec'ed this.

[katandmoon]

2. The best justice that money can buy

[w4rma]

4. President Obama is going down in history as corrupted by this company and others on Wall Street.

This is what will be in the history books, unfortunately. He choose nothing but DLCers for his cabinet, so that's where he will end up as judged by history.

[ThomCat]

6. I think you are right.

I think history will write that he was too cozy with companies that destroyed the economy under his watch, and he was unwilling to stand up to prosecute anyone, hold anyone accountable, or effectively regulate anyone. :(

[ProSense]

7. Right, because someone posts something on Huffpo means the administration is corrupt?

As for Goldman, it acknowledged in its settlement that its marketing materials "contained incomplete information" and that it was a "mistake" to say the investment portfolio it was selling "was 'selected by' ACA Management" (it was actually selected by a group known to be betting against its success.) In other words, Goldman admitted misleading its clients, as its PowerPoint presentation seemed to demonstrate. But what's to be gained by these large corporate settlements if there are no indictments against the individuals whose misdeeds led to those settlements? After all, the total Goldman settlement is only 5% of its 2009 employee bonuses, as the entertainingly-named GoldmanSachs666 points out. Will we see any individuals face the consequences of their actions, or will we only see Goldman-style settlements that leave bankers with an incentive to keep on cheating?

Here are some more questions: What's the status of the Goldman Sachs investigation? Are other criminal probes under way? Let's hope that the Department of Justice doesn't keep "declining to comment," or declining to act on its responsibility to protect the public from criminal behavior in high places. The state of Ohio took firm action and got results last week, as has the state of New York in the past. But the Justice Department must pave the way. It must follow the evidence, wherever it leads. The public should demand no less.

Does Eskow have idea how they came up with the settlement?

[Guy Whitey Corngood]

5. Why do you insist on looking back. It's like me stealing your car and you're still upset about it

a year later.

[ProSense]

8. So the largest settlements are somehow signs of complicity?

I notice Eskow linked to Yves Smith, who seems more interested in twisting everything the administration does.

Last week, it was the Wall Street Reform bill.

Round-up of takes on the US financial reforms (or just go straight to Mish):

Let's check out Mish, some guy supporting Republicans, including one who promises to defeat Pelosi.

As long as it's anti-Obama, cool?

[depakid]

10. Proving once again that you'll say absolutely anything

Fact is that this administration's record with respect to letting corporate criminals and corrupt public officials walk away scot free is indefensible- and worse, it's has perpetuated an environment of no accountability that rivals even that of its predecessor.

It's been so appalling that it even makes one pine for Dick Thornburgh- and as noted above, historians will include that as an indelible backmark on this administration's legacy (long with the fouling of the Gulf of Mexico that resulted from it).

We have every right as citizens to expect and demand better, as Dean Baker discusses here:

Treat reckless corporate behavior like drink-driving:

Top executives at BP, Massey, Goldman Sachs et al might have acted more responsibly if they had faced the prospect of jail time.

http://www.guardian.co.uk/commentisfree/cifamerica/2010/jul/12/oil-spill-corporate-responsibility

[ProSense]

11. Yeah, just asking a bunch of questions is an indictment

<...>

The Federal Bureau of Investigation has more than 2,100 corporate and securities fraud investigations open, many with losses exceeding $100 million and several with losses topping $1 billion, according to the Justice Department.

Federal prosecutors in Manhattan have been probing Wall Street firms that designed complex mortgage-related investments. They are also examining whether former executives at Lehman Brothers Holdings misled investors about the firm's financial picture before it collapsed two years ago. No criminal charges have been filed in any of the probes.

The Manhattan U.S. Attorney's Office declined to comment.

On Capitol Hill, news of the proposed Goldman settlement landed as the Senate was wrapping up final votes on legislation overhauling federal regulation of Wall Street. More detailed scrutiny of the proposed settlement is likely in coming weeks.

One of the harshest congressional critics of Goldman Sachs, Sen. Carl Levin, welcomed the settlement, noting it was appropriate for Goldman to acknowledge "wrongdoing," while also paying a fine.

link

During the S&L crisis, Neil Bush cost taxpayers $1.3 billion. He should have gone to jail. Instead he paid a $50,000 fine.

So yeah, $500 million from Goldman and $700 million from AIG is a great start.

[depakid]

12. The comparison is yet another reason why it's so disgraceful

When one can go back and objectively review the record and say that even Dick Thornburgh did a better job of holding individuals and institutions to account- I mean, wow.

That's a pretty low standard.

[ProSense]

13. Yeah, that's just what I'd call a $50,000 settlement on a $1.3 billion loss: accountability.

Oh brother.

S&L Crisis:

In the late 1980s and early 1990s, the United States experienced a similar financial crisis with the collapse of the savings and loans. The Department of Justice (DOJ), and more specifically the FBI, were provided a number of tools through the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) and Crime Control Act of 1990 (CCA) to combat the aforementioned crisis. As stated in Senate Bill 331 dated January 27, 2009, “in the wake of the Savings and Loan crisis of the 1980s, a series of strike forces based in 27 cities was staffed with 1000 FBI agents and forensic experts and dozens of federal prosecutors. That effort yielded more than 600 convictions and $130,000,000 in ordered restitution.”

link

Current crisis:

Since the financial meltdown began in the fall of 2007, the Department’s efforts to combat significant financial frauds of all stripes have continued to intensify. For example, the FBI currently reports more than 2,100 pending corporate and securities fraud investigations across the country, many with losses exceeding $100 million, and several with losses over $1 billion. Efforts to combat the most egregious corporate and securities fraud offenders resulted in 460 convictions in FY 2009 alone.

link

Like I said, $1.2 billion in settlements is not a bad start.

[depakid]

14. You just don't know when to quit...

:rofl:

There are people on the other side of the aisle like that, too.

Read Dean Baker's bit in my post above- and you'll see what effective accountability looks like.

Here's a hint: it ain't chump change- or pennies on ill gotten gains.

[ProSense]

15. "Here's a hint: it ain't chump change- or pennies on ill gotten gains." Wait

460 convictions are pennies?

Why exactly are you laughing and dropping Dean Baker's name in response to the facts provided?

"You just don't know when to quit..."

What? Making sense?

[Hawkowl]

9. We can only litigate the future

Crimes committed in the past, are in the past. We must move forward with no bitterness and ..

What a FUCKING CROCK OF SHIT. But I am not surprised.

[slipslidingaway]

16. knr nt

[ProSense]

17. "460 convictions in FY 2009 alone"

details