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Wall Street Criminals Are Above the Law

December 8, 2011

No question that no one in wall street seems to be going to jail for harming the economy, but were any crimes even committed? Some people don’t think so. For example, Obama said that the banks didn’t commit any crimes. Even so, there is ample evidence that there are wall street crimes that are not being appropriately punished:

First, we have reason to think fraud was involved when banks were buying and selling mortgage securities. In fact, a hedge fund company is suing Goldman Sachs for “purposely unloading $93 million in mortgage-backed securities it knew to be junk onto a client, then betting against those same securities in the lead-up to the financial crisis.”

Second, the Senate concluded after a two year investigation that “Goldman Sachs, the nation’s fifth-largest bank by assets, systematically misled clients, sold them financial instruments it knew to be junk, bet against them and profited off of their losses.”

Third, there’s a revolving door at the SEC, the government organization in charge with investigating banking & accounting crime. SEC investigators who are “soft on crime” against companies they investigate are likely to find great jobs at those companies later on.

Fourth, the SEC has been destroying records involving fraud investigations.” A whistle blower says the agency has illegally destroyed thousands of documents, letting financial crooks off the hook.”

Fifth, the SEC rarely brings any criminals to court and instead settle out of court for pennies on the dollar. The SEC has been charged with being soft on crime.  In fact, Goldman Sachs was accused of securities fraud and had the largest settlement with the SEC in our entire history–$550 million–which is just a few days worth of profits for the company. Additionally, Citigroup was recently charged with selling toxic mortgage debt and was going to settle with the SEC for merely $285 million, but a judge blocked the settlement for being an inadequate punishment.

Fifth, less financial crime is prosecuted under the Obama administration than we’ve seen in a long time. Bush Jr. was known for being soft on financial crime, but he still had more financial prosecutions while he was in power. In fact, “Federal prosecutions for financial institution fraud have continued their downward slide” for around twelve years now.

There’s a lot going on not mentioned here, but this is a start.

Much of what I said here was also discussed in The Young Turks’s Youtube video found here.


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