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I don’t disagree with Adam Levitin at all about the foreclosure crisis and the deliberate backing away from any accountability for the banks. Clearly this accountability crisis is at the forefront of not only our financial meltdown and our economic malaise, but a host of other matters including civil liberties in particular.
However, without concluding that a corner has been turned or that a new era has come to Washington, let me relate a few disparate items here for you. First:
The Federal Deposit Insurance Corp (FDIC) is conducting about 50 criminal investigations at U.S. banks that have failed since the start of the financial crisis, the Wall Street Journal said.
The FDIC, which is responsible for dealing with bank failures, is probing former executives, directors and employees at failed U.S. banks and is taking efforts to punish alleged recklessness, fraud and other criminal behavior, the Journal said.
My understanding is this is mostly about failed bank executives stealing on their way out the door.
Next…
Federal agents arrested two former employees of Bernard L. Madoff on Thursday morning, a spokesman for the Federal Bureau of Investigation told DealBook.
Annette Bongiorno was arrested at her home in Boca Raton, Fla., and Joann Crupi was arrested at her residence in Westfield, N.J., the spokesman said. Both women worked for Mr. Madoff for more than 25 years. Ms. Bongiorno served as Mr. Madoff’s longtime personal secretary; Ms. Crupi, among other responsibilities, handled the company’s daily cash balances.
Charges against the two are expected to be unsealed later on Thursday.The Securities and Exchange Commission also sued the two.
The Madoff case is the only one where federal prosecutors have not been reluctant to seek criminal charges and jail time.
Then there’s this:
The SEC is all over the news today. It’s investigating Citigroup! It’s examining Charles Schwab, over the YieldPlus fiasco which we thought was settled but wasn’t! And, of course, in conjunction with Andrew Cuomo, it’s coming down on Steve Rattner like a ton of bricks [...]
Technically it’s Cuomo who’s bringing the suits, while the SEC is announcing a $6.2 million civil settlement with Rattner, timed beautifully to coincide with the first day of trading in GM shares. But what seems clear is that the SEC, egged on by the likes of Cuomo and emboldened by its success in extracting half a billion dollars from Goldman Sachs over the Abacus affair, has started to grow some teeth for the first time in living memory.
Growing teeth is of course relative. The Abacus settlement didn’t force Goldman Sachs to admit any wrongdoing, for example.
As I said, I don’t any of this, alone or in total, adds up to a new era of accountability for the banksters. I think it shows a way they could be held accountable, however. If the FDIC cracked down on all the executives at the banks they supervise, if the SEC worked with the FBI more often on criminal proceedings, if the SEC fulfilled its mandate completely, and if regulators enforced the law along a whole host of other agencies, you could see how the financial industry would have to reform their ways. That day hasn’t arrived, but the blueprint is there.
Hopefully, when the Financial Crisis Inquiry Commission releases their report, it will be so devastating that the regulators will continue with more than baby steps toward real action.
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Uh…yeah.
As if anything other than completely destroying these institutions is acceptable. Instead of being lawless money sucking parasites, they’ll be money sucking parasites that occasionally get slapped on the wrist and pay fines teeny tiny compared to their profit.
The continued existence of banking institutions that create no real product and are “profitable” only by complicated and technically legal (or retroactively legal) confidence schemes is obscene, regardless of how well they are regulated. This is like saying “it’s all under control, we’ve made is so the vampire isn’t going to kill you, just feed a little and put a band aid on your owie.”
Sure do hope those rumblings materialize. Here’s an article from the NY Review of Books that provides good background for people like me trying to grasp this whole mess.
The Economy: Why They Failed
DECEMBER 9, 2010
John Cassidy
LINK.
And here’s a clever animation describing Bernanke’s “quantitative easing”, too.
“All over the news…” the spin machine is in high gear…the people need to think something is being done. So Madoff et al get thrown under the buss!
The banksters are the “Untouchable” like the mobsters Elliot Ness was given little to oppose. They got Russia, S.America and anything that the Shock Doctrine van take down which is now us. …”They came for…”
Amen. It’s time to stop talking about the financial industry as if it’s just misguided and start referring to it for what it is: a criminal conspiracy.
A few things to keep in mind:
As the victims of crime and their families can testify:
The wheels of justice grind slowly.
Responsible and ethical prosecutors do no announce charges before they are filed.
The same goes for regulators.
In my opinion, this is prudent (you don’t want to set make promises you cannot keep) and correct (as an extension of the innocent until proven guilty thing)
Politics does not belong in these arenas.
However – it would be nice if the politicians and legislators steeped up to the plate as well.
AND THE KILLIN GOEZ ON AND ON AND…
Citizen David Dayen and the FDL walkin’ wounded:
Thanx for the post, David, but this is simply more kabuki in an attempt to distract the villagers from ooooing and aaaing over the hunky new senator from Kentucky and throwin’ a milk bone to us folks out here who are mad as hell at ObamaRhama. If we get a referral to the DOJ out of any of this then I might believe that this administration is not the second coming of Reagan-Rand economics.
Let’s keep our eyes on the Senate and a real vote on middle class tax cuts…if that really happens it means that someone in the White House has grown a few political brain cells.
KEEP THE FAITH AND PASS THE AMMUNITION, IT’S ALL ABOUT THE WARS, STUPID!!
Maybe the French are on to something.
http://www.zerohedge.com
A few weeks ago we noted that December 7 is becoming a grass roots “banker mutiny” day, in which citizens across Europe will pull money from their banks and thus force a pan-European bank run on what is already a bankrupt financial system, which survives each day only at the expense of the continent’s increasingly indebted citizens, their life of increasing austerity, and of course, the US Federal Reserve and its final backstop. I
This means that the 3 million people with their placards on the street… they go to the bank, withdraw their money from the banks and these ones collapse.
10 million people and the banks collapse and there is not real threat, a real revolution. We must go to the bank. In this case there would be a real revolution. It’s not complicated. You simply go to the bank in your country and withdraw your money. If there are enough people withdrawing their money, the system collapses. No weapon, no blood, or anything like that.” A peaceful anti-banking revolution, brilliantly explained so that everyone can understand it..
Krugman on “The Axis of Depression”: “No doubt some of Mr. Bernanke’s critics are motivated by sincere intellectual conviction, but the core reason for the attack on the Fed is self-interest, pure and simple. China and Germany want America to stay uncompetitive; Republicans want the economy to stay weak as long as there’s a Democrat in the White House.”
LINK.
The people in the large corporations, which in some ways seem to run the rest of us like a government can, accept or break rules as they please. That’s the modern reality.
Falcone’s fund faces scrutiny over trading
More Hot Water For Phil Falcone?
There are two links @10. Second is a little more lengthy and involved than the first.
Accountability means 10-20 years for thousands (tens of even?) of people and mneaningful (i.e. total) seizures of personal assets. Nothing less.
Slaps on their wrists!
Get back to me when they put Lloyd Blankfein in jail.
Here is something that irks me. When a settlement is reached with a corporate giant instead of prosecuting full-out for jailtime of corporate personnel, the excuse usually heard goes something like this: “Well it probably hurts them more to settle because all corporations care about is money, so if you take their money you are getting justice–maybe even more than justice–you’re taking their life’s blood.”
Not only do I believe corporate personhood should be officially and legislatively ended, I don’t believe punishing a corporation with fines and settlements is the same as justice. If people want to believe corporations are people, build much bigger jails and put the entire board of directors in the slammer. Besides, it’s cruel and inhuman punishment to torture “people” by bleeding them.
Collect the names and salaries of all Wall Street banksters in an Excel spread sheet, Columns A and B. Sort descending on Column B (Salaries). The top twenty percent are sent to Bagram, held as “enemy combatants” and charged with financial terrorism. The next twenty percent are charged and have to fend off criminal convictions. The message to those that manage to avoid prison is clear: “You were able to beat the rap, but not the ride.
A thousand bankers, I say. A thousand dripping from gibbets in America’s town squares. A thousand huddling in their gated communities while morgagees rage outside with hunting rifles and ladders. A thousand. Or maybe a publicized four. Modern communications are great.
Amen.