Why aren't there any big arrests from the financial crisis? I'm sure they have a good explanation.

This NYT article does a pretty good job of examining all the reasons there haven't been any prosecutions of the people involved in the financial collapse. They try to play it off as just plain old simple government incompetence. I might believe that in a few cases but, when you read the article, you will see that the government has failed, over and over and over again to exert any control over the financial industry and when problems arise, they either turn the other way or bungle the investigation completely.

Either they were in on it from the beginning and it is part of their plan to destroy America or they are owned by the banking cartels.

In Financial Crisis, No Prosecutions of Top Figures

It is a question asked repeatedly across America: why, in the aftermath of a financial mess that generated hundreds of billions in losses, have no high-profile participants in the disaster been prosecuted?

Answering such a question — the equivalent of determining why a dog did not bark — is anything but simple. But a private meeting in mid-October 2008 between Timothy F. Geithner, then-president of the Federal Reserve Bank of New York, and Andrew M. Cuomo, New York’s attorney general at the time, illustrates the complexities of pursuing legal cases in a time of panic.

At the Fed, which oversees the nation’s largest banks, Mr. Geithner worked with the Treasury Department on a large bailout fund for the banks and led efforts to shore up the American International Group, the giant insurer. His focus: stabilizing world financial markets.

Mr. Cuomo, as a Wall Street enforcer, had been questioning banks and rating agencies aggressively for more than a year about their roles in the growing debacle, and also looking into bonuses at A.I.G.

Friendly since their days in the Clinton administration, the two met in Mr. Cuomo’s office in Lower Manhattan, steps from Wall Street and the New York Fed. According to three people briefed at the time about the meeting, Mr. Geithner expressed concern about the fragility of the financial system.

His worry, according to these people, sprang from a desire to calm markets, a goal that could be complicated by a hard-charging attorney general.

NYT

Of course, they all claim that concerns about the market did not affect their enforcement decisions and the writers of this article seem to buy that line of bull but, as you read on, you really have to wonder.

They compare the response to this crisis to the savings and loan debacle from the '80's in which over 1000 prosecutions were recommended and 800 bank officials went to jail. Apparently, the government knew how to investigate this type of crime at one point in our recent history. From their actions, it seems to me that they intentionally looked the other way and impeded any meaningful investigation.

The Justice Department in Washington was abuzz in the spring of 2008. Bear Stearns had collapsed, and some law enforcement insiders were suggesting an in-depth search for fraud throughout the mortgage pipeline.

The F.B.I. had expressed concerns about mortgage improprieties as early as 2004. But it was not until four years later that its officials recommended closing several investigative programs to free agents for financial fraud cases, according to two people briefed on a study by the bureau.

The study identified about two dozen regions where mortgage fraud was believed rampant, and the bureau’s criminal division created a plan to investigate major banks and lenders. Robert S. Mueller III, the director of the F.B.I., approved the plan, which was described in a memo sent in spring 2008 to the bureau’s field offices.

Days after the memo was sent, however, prosecutors at some Justice Department offices began to complain that shifting agents to mortgage cases would hurt other investigations, he recalled. “We got told by the D.O.J. not to shift those resources,” he said. About a week later, he said, he was told to send another memo undoing many of the changes. Some of the extra agents were not deployed.

Around the same time, the Justice Department also considered setting up a financial fraud task force specifically to scrutinize the mortgage industry. Such task forces had been crucial to winning cases against Enron executives and those who looted savings and loans in the early 1990s.

Michael B. Mukasey, a former federal judge in New York who had been the head of the Justice Department less than a year when Bear Stearns fell, discussed the matter with deputies, three people briefed on the talks said. He decided against a task force and announced his decision in June 2008.

A year later — with precious time lost — several lawmakers decided that the government needed more people tracking financial crimes. Congress passed a bill, providing a $165 million budget increase to the F.B.I. and Justice Department for investigations in this area. But when lawmakers got around to allocating the budget, only about $30 million in new money was provided.

Subsequently, in late 2009, the Justice Department announced a task force to focus broadly on financial crimes. But it received no additional resources.

Another issue is that prosecutors rely heavily on recommendations from regulators when it comes to financial matters. in 1995 they referred 1837 cases to prosecutors but by 2006 only 75 were referred and since the financial crisis, only 72 a year.

The hostility of the Bush administration to regulations seems to have infected the agencies that were supposed to police the financial industry. The financial industry should be the most heavily regulated of all areas of the economy; the opportunities for fraud and criminal activity are numerous and the consequences of wide scale corruption have been devastating.

They do mention that this trend started in the Clinton administration, showing that changing parties really doesn’t change anything, at least for the banksters.

The article even details how some of the big players managed to “slip through the fingers” of law enforcement due to the “incompetence of law enforcement” and, of course being put off limits by government bureaucrats.


They try really hard to push the idea that it was just missteps and bad coordination that allowed those people to walk free. I hope nobody actually falls for that line of bunk but, knowing most people, they’ll probably buy the MSM story hook, line and sinker.

Are you crazy in starting this thread? Don't you know who is in charge? Didn't the Madoff caper stir up a hornet's next of ill feelings toward a certain group that are in charge of the money in the world? How could you even suggest that anyone look deeply into the major financial shenanigans when the Madoff deal was basically a small time in-your-face operation and easy to recognise by anyone that knew anything about it whether in business or government. No. No. Hands off the elite if you please, they buy and pay for that protection.

You couldnt arrest your friends for stealing money from the bank during a game of Monopoly could you?

None of its real. Oh Im afraid it is as simple as that. My apologies there is not mounds of data to intellectually joust over.

Originally posted by superluminal11
You couldnt arrest your friends for stealing money from the bank during a game of Monopoly could you?

None of its real. Oh Im afraid it is as simple as that.

Unfortunately, that is just too true.


How did we end up living in a world where we could be enslaved by little worthless pieces of paper?

I think the cover story is Goldman Sachs was fined a few hundred million off of the billions they stole through extortion and manipulation.

Originally posted by filosophia
I think the cover story is Goldman Sachs was fined a few hundred million off of the billions they stole through extortion and manipulation.

Unfortunately, that's how the regulatory agencies work; they give companies slap on the wrist fines that they just write off as the cost of doing business and then continue on doing the same thing.

The real purpose of regulations is to prevent competition from upstart new companies who know how to do things more efficiently. The fines would destroy most start-ups while the super-mega corporations can absorb the fines as the price of keeping down any competition.