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“Relentless Wal Street Crime Spree”: Fines Are Not Adequate Deterrents To Corporate Misbehavior

When future historians look back at our era, they will doubtless be puzzled about how we allowed it to come to pass that faceless corporations were granted all the freedoms and protections of real people, but faced none of the consequences that real people face for criminal behavior. This puzzle is related to the problem I wrote about earlier this morning, in which social problems for normal people are solved with fines and jail time, but social problems caused by corporate “citizens” are given market solutions and self-regulation instead.

The latest case in point comes as six major banks guilty of manipulating currency markets were given the laughably small fine of $4.3 billion, and not a single one of the actual perpetrators is coming close to facing jail time.

On Wednesday, six massive international banks agreed to pay $4.3 billion to settle allegations from regulators in the United States, the United Kingdom, and Switzerland that their traders tried to manipulate the $5.3-trillion-a-day foreign-currency exchange market. But Wall Street watchdogs say the banks got off with a slap on the wrist.

From 2008 through 2013, traders at JPMorgan Chase, Bank of America, Citigroup, HSBC, the Royal Bank of Scotland, and UBS colluded to coordinate the buying and selling of 10 major currencies to manipulate prices in their favor….

In the real world, the crime spree being perpetrated by global corporations, particularly those in the financial sector, will never abate until the criminals perpetrating them are actually thrown in jail.

But critics say the banks, which were not forced to admit wrongdoing, deserved a much harsher punishment. “The global too-big-to-fail banks are again allowed to evade responsibility and accountability by using shareholders’ money to pay big fines, which will generate headlines but do little if anything to stop the relentless Wall Street crime spree,” Dennis Kelleher, the president of Better Markets, a financial reform advocacy shop, responded in a statement.

David Weidner, who covers Wall Street for MarketWatch, agrees. The settlements “appear to be just another cost-of-doing-business budget line for the banks,” he wrote. What’s more, financial reformers say, none of the employees involved in the rate-fixing will face criminal charges. “It’s corrupt, as usual,” says one House staffer. Regulators should “send crooks to jail.”

Fines are utterly inadequate to deter this sort of behavior. We understand this implicitly when it comes to check kiters and liquor store robbers. If you’re convicted of those things you go to jail. But if you collude to debase another country’s entire currency for your own profit, your company pays a small fine.

That’s going to look very weird and very corrupt in about 100 years. Or else it won’t–in which good luck to us all.

 

By: David Atkins, Political Animal, The Washington Monthly, November 15, 2014

November 19, 2014 Posted by | Big Banks, Corporations, Wall Street | , , , , , , | Leave a comment

“A Nation Divided, With Liberty And Justice For Some”: White-Collar Crimes Are Not Considered “Appropriate For Jail”

It swallowed people up.

That’s what it really did, if you want to know the truth. It swallowed them up whole, swallowed them up by the millions.

In the process, it hollowed out communities, broke families, stranded hope. Politicians brayed that they were being “tough on crime” — as if anyone is really in favor of crime — as they imposed ever longer and more inflexible sentences for nonviolent drug offenses. But the “War on Drugs” didn’t hurt drugs at all: Usage rose by 2,800 percent — that’s not a typo — in the 40 years after it began in 1971. The “War” also made America the biggest jailer on Earth and drained a trillion dollars — still not a typo — from the Treasury.

Faced with that stunning record of costly failure, a growing coalition of observers has been demanding the obvious remedy. End the War. The Obama administration has been unwilling to go quite that far, but apparently, it is about to do the next best thing: Declare a ceasefire and send the prisoners home.

Attorney General Eric Holder announced last week that the government is embarking upon an aggressive campaign to extend clemency to drug offenders. Those whose crimes were nonviolent, who have no ties to gangs or large drug rings and who have behaved themselves while incarcerated will be invited to apply for executive lenience to cut their sentences short.

Nobody knows yet how many men and women that will be. Easily thousands.

Combined with last year’s announcement that the government would no longer seek harsh mandatory minimum sentences for nonviolent drug offenders, this may prove the most transformative legacy of Barack Obama’s presidency, excluding the Affordable Care Act. It is a long overdue reform.

But it is not enough.

As journalist Matt Taibbi observes in his new book The Divide: American Injustice in the Age of the Wealth Gap, Holder’s Justice Department has declined, essentially as a matter of policy, to prosecute the bankers who committed fraud, laundered money for drug cartels and terrorists, stole billions from their own banks, left taxpayers holding the bag, and also — not incidentally — nearly wrecked the U.S. economy. But let some nobody get caught with a joint in his pocket during a stop-and-frisk and the full weight of American justice falls on him like a safe from a 10th-story window.

For instance, a man named Scott Walker is 15 years into a sentence of life without parole on his first felony conviction for selling drugs. Meantime, thug bankers in gangs with names like Lehman Brothers and HSBC commit greater crimes, yet do zero time.

We have, Taibbi argues, evolved a two-track system under which crimes committed while wearing suit and tie — or pumps — are no longer considered jailable offenses. Taibbi said recently on The Daily Show that prosecutors have actually told him they no longer go after white-collar criminals because such people are not considered “appropriate for jail.”

Who is “appropriate”? Do you even have to ask?

Black people. Brown people. Poor people of whatever hue.

Thousands of whom are apparently coming home now. One hopes there will be a mobilization — government agencies, families, churches, civic groups — to help them assimilate into life on the outside. But one also hopes we the people demand reform of the hypocritical system that put them inside to begin with.

These men and women are being freed from insane sentences that should never have been imposed, much less served. Contrary to the pledge we learned in school, it turns out we are actually one nation divided, with liberty and justice for some.

So yes, it is good to see the attorney general dismantle the War on Drugs. But while he’s at it, let him dismantle the War on Fairness, too.

 

By: Leonard Pitts, Jr., Columnist for The Miami Herald; Published in The National Memo, April 28, 2014

April 29, 2014 Posted by | Big Banks, Criminal Justice System, Minorities | , , , , , , , | Leave a comment

“The Corruption Is Complete”: Where’s The Cop On The Wall Street Beat?

Bankers gone wild! Let’s tally some of their crimes:

JPMorgan Chase engaged in massive, systematic fraud to foreclose without cause or due process on innocent homeowners, tossing thousands of families into the streets.

Goldman Sachs profited by marketing an investment package that was designed to fail, collecting fat fees on each sale to unsuspecting investors who lost millions, while the bank also collected millions more from a side bet it made that, sure enough, its package would be a loser.

For years, HSBC has been butt-deep in a swamp of despicable, illegal money-laundering schemes, willingly processing billions of dirty dollars for vicious drug cartels and peddlers of arms to terrorist forces at war with America.

Many more examples abound. These are not poor saps desperately robbing a bank branch for a few hundred dollars, but criminal enterprises run by multimillionaire Wall Streeters who run in the finest social circles, are celebrated by the media and hobnob with the nation’s political elite.

Their corruption is complete; their crimes are documented. Yet, unlike sad-sack bank robbers, none of these Robbing Bankers have even been prosecuted, much less jailed. In fact, as revealed on PBS’s Frontline program earlier this year, frustrated prosecutors who served in the Justice Department’s criminal division two years ago report that “when it came to Wall Street, there were no investigations going on. There were no subpoenas, no document reviews, no wiretaps.”

Why is that? Where are the cops on the Wall Street beat?

Up in the suites, coddling the culprits, whom they know on a first-name basis. That’s because Attorney General Eric Holder and the chief of his criminal division, Lanny Breuer, have previously enjoyed lucrative careers as lawyers defending the very barons they’re now supposed to be prosecuting. Holder and Breuer both hail from the same Washington law firm, Covington & Burling, that specializes in representing corporate clients with legal issues at the Justice Department.

The moral here is clear: When engaged in high crimes, it literally pays to have friends in the highest places.

To transport them there, a secret cosmic door connects the parallel universes of Washington and Wall Street. It’s not the proverbial revolving door, but a wide-open passageway for easy flow back and forth — reserved for those in the know.

Lanny Breuer is one definitely in the know, passing with impunity from the job of defending Wall Street wrongdoers in cases before the Justice Department to being the department’s chief prosecutor of Wall Street wrongdoing.

Four years ago, he left Covington & Burling, where he represented Wall Street clients, to head the criminal division of Justice. Dismissing criticism that his long service to Wall Street banksters created an inherent conflict of interest with his new duty to the public, Breuer insisted that he’d be a better prosecutor “because of my deep experience in the private sector.”

That claim would’ve proven more convincing had he brought even a single case against the Wall Street executives who’ve been publicly exposed as self-enriching perpetrators of widespread fraud and other destructive financial crimes. But, no, not one.

Why? Call me cynical, but perhaps because he was using his four years at Justice to pad his résumé and enhance his value to Wall Street. Protecting bankers from prosecution could be a good career move.

No surprise, then, that Breuer headed back through that cosmic door, rejoining Covington in a specially created position to expand its role in defending corporate clients charged with foreign bribery, money laundering, securities fraud and such. “I’m a zealous advocate,” said the guy who studiously refrained from being a zealous prosecutor. “I look forward to being a zealous advocate for our clients again,” he added.

Sheesh, couldn’t he at least pretend to have some ethics? Instead, Lanny was relieved to be back on Wall Street’s side: “It’s my professional home,” he confessed.” Oh, did I mention that his starting salary at Covington will be $4 million a year?

 

By: Jim Hightower, The National Memo, April 10, 2013

April 11, 2013 Posted by | Big Banks, Wall Street | , , , , , , | Leave a comment

   

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