Monday, July 29, 2013

Five Years Later and Few Charges re 2008 Financial Crisis

NPR has an interesting story regarding the lack of prosecutions related to the financial collapse in 2008 in the United States.  According to the story, part of the reason for the lack of prosecutions might be the lack of investigatory resources targeting the issue.
In the latest in a string of insider trading cases, federal prosecutors this week indicted SAC Capital, one of the most prominent and profitable hedge funds in the world.

But when it comes to the 2008 financial crisis that sent the economy into a tailspin, criminal prosecutions have been few and far between.

"The folks responsible for this incredibly painful economic damage that struck our economy have gone free," says Neil Barofsky, a former federal prosecutor who also served as special inspector general overseeing the big Troubled Asset Relief Program bank bailout, signed into law by President Bush in 2008...
The article goes on to describe the allocation of resources by the government.  According to the article, William Black, previously with the Office of Thrift Supervision during the S&L crisis in the 1980s, stated:
"I've been saying it for years," he says. "You have to make the effort."

He notes that during the savings and loan crisis, he was involved with a lot of criminal prosecutions. "At peak we had a thousand FBI agents working those cases."

By comparison, Black says, when the financial crisis hit there were only 120 FBI agents working on bank fraud.

And mortgage fraud cases against big financial firms are just tough cases to bring, Black says.


The entire NPR story is available here.

No comments: