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posted by LaminatorX on Wednesday May 07 2014, @03:28AM   Printer-friendly [Skip to comment(s)]
from the Paper-Tigers dept.

After the savings-and-loan scandals of the 1980s, the FBI opened 5,490 criminal investigations, 1,100 people were prosecuted, and 839 were convicted, including top executives at many of the largest failed banks. But Jesse Eisinger writes in the NYT that the largest man-made economic catastrophe since the Depression resulted in the jailing of a single investment banker, Kareem Serageldin, to 30 months in jail. Many assume that federal authorities simply lacked the guts to go after powerful Wall Street bankers but according to Eisinger, the truth is more complicated. "During the past decade, the Justice Department suffered a series of corporate prosecutorial fiascos, which led to critical changes in how it approached white-collar crime. The department began to focus on reaching settlements rather than seeking prison sentences, which over time unintentionally deprived its ranks of the experience needed to win trials against the most formidable law firms."

From 2004 to 2012, the Justice Department reached 242 deferred and nonprosecution agreements with corporations, compared with 26 in the previous 12 years, and while companies paid huge sums in the settlements, several veteran Justice Department officials say that these settlements emboldened defense lawyers. More crucially, they allowed the Justice Department's lawyers to "succeed" without learning how to develop important prosecutorial skills. The erosion of the department's actual trial skills soon became apparent. In November 2009, the U.S. attorney's office in Brooklyn lost the first criminal case of the crisis against two Bear Stearns executives accused of misleading investors. The prosecutors rushed into trial, failing to prepare for the exculpatory emails uncovered by the defense team. After two days, the jury acquitted the two money managers. "For sure, it put a chill" on investigations says one former prosecutor. "Politicos care about winning and losing." Federal prosecutors have their own explanation for how only one Wall Street executive landed in jail in the wake of the financial crisis, says Eisinger. "The cases were complex to investigate and would have been infernally difficult to explain to juries."

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  • (Score: 5, Informative) by davester666 on Wednesday May 07 2014, @03:40AM

    by davester666 (155) on Wednesday May 07 2014, @03:40AM (#40418)

    is have a really complicated murder case, and the prosecutor will just throw up his hands and say "I can't get a jury to understand how you killed that person, so you are free to go.".

    • (Score: 1) by biff on Wednesday May 07 2014, @03:53AM

      by biff (170) on Wednesday May 07 2014, @03:53AM (#40419)

      And not just that case, but then apparently all subsequent cases in its class will be "deferred or nonprosecuted" forevermore? It's just a baffling argument any way one looks at it. Surely computer crimes are infernally difficult to explain to a jury as well?

      • (Score: 3, Insightful) by Ryuugami on Wednesday May 07 2014, @08:07AM

        by Ryuugami (2925) on Wednesday May 07 2014, @08:07AM (#40452)

        No they're not.

        Just scream "HACKER!" and wave the CFAA a bit and you're set.

        --
        If a shit storm's on the horizon, it's good to know far enough ahead you can at least bring along an umbrella. - D.Weber
    • (Score: 2) by Grishnakh on Wednesday May 07 2014, @01:32PM

      by Grishnakh (2831) on Wednesday May 07 2014, @01:32PM (#40517)

      Sounds fair to me. This is the problem with having cases heard by juries. Juries are generally composed of stupid people who are unqualified to make judgments on the facts of the case, and instead are selected by the attorneys to be easily swayed by emotional arguments.

      If you want to be able to prosecute complicated cases, you need to eliminate juries, or have professional jurors who are intelligent and well-educated.

      • (Score: 2) by edIII on Thursday May 08 2014, @12:30AM

        by edIII (791) on Thursday May 08 2014, @12:30AM (#40761)

        Everyone just wants out of jury duty. Instead, I would require a citizen to spend a certain amount of time as a juror in order to qualify for the privilege of driving. You only get a pass if the government literally didn't need or want you that year. Tie it to an essential privilege.

        It might help to actually pay people too. The primary reason people want out of jury duty is that the economy is so completely fucked the government is simply asking too much. For somebody's time like that when corporations are the largest oppressors of people, pushing them to low wages and low benefits, you have to compensate them for the lost time, lost wages, lost opportunity, and increased risk. If people barely have any savings left and hordes of poor and lower middle class people are being abused to usurious and predatory pay day lenders, you have to be completely disconnected with reality to not understand how much people don't want to do it. In fact, I wholly believe that for some people it's not possible at all. The real risk of jury duty is not making enough money that month to pay bills.

        The cost of paying for the jury in civil cases (where applicable) should be fronted by the plaintiff. This doesn't present a barrier to simple disputes solved by small claims courts, and in larger cases, costs should represent less than an expert witness. If your case qualifies under certain criteria you can argue for an exception and would only be charged if the case was dismissed with extreme prejudice as being frivolous.

        It's problematic I know, but if you got paid a living wage to be on a jury people would stop arguing about being on the jury. The amount they pay out right now might be sufficient for 1950 when a cheeseburger wasn't $7.

        You can't demand having both educated and capable jurors and an economic system which provides such a huge penalty to being one.

        The educated, intelligent, or just pain devious people get out of jury duty all day long and you are left with Cletus.

        --
        Technically, lunchtime is at any moment. It's just a wave function.
        • (Score: 2) by Grishnakh on Thursday May 08 2014, @02:11PM

          by Grishnakh (2831) on Thursday May 08 2014, @02:11PM (#40901)

          You're absolutely right. My wife just spent a day on jury duty (and was dismissed by one of the attorneys); her paycheck for that day: $5. Whoopee.

          It also doesn't help that it hurts your employment many times to miss a day of work.

  • (Score: 5, Insightful) by physicsmajor on Wednesday May 07 2014, @04:09AM

    by physicsmajor (1471) on Wednesday May 07 2014, @04:09AM (#40420)

    It doesn't matter if they fail to convict some. Those who did wrong must be punished. Settlement after settlement amounts to far less than corps or banks reaped thanks to their wrongdoing. This incentivizes wrongdoing!

    Consider:
    You stole 17 expensive cars, but got caught. Instead of being arrested, you got a call saying "Hey, just letting you know - we're going to bill you for one of those. You won't serve any time, you won't even see a courtroom, and you won't have to admit you did anything wrong so your record remains squeaky clean."

    Is this a deterrent for bad behavior, or does it make you want to go out and steal more cars?

    We have the laws to go after the top executives. They are on record, some lied to Congress itself under oath. These are not difficult cases. Until or unless they are brought, this country will not recover.

    • (Score: 1) by Horse With Stripes on Wednesday May 07 2014, @05:04AM

      by Horse With Stripes (577) on Wednesday May 07 2014, @05:04AM (#40426)

      I'm not sure where I'm going to put them, but I'm going to go steal 17 expensive cars to test your theory. Wish me luck!

    • (Score: 3, Insightful) by Thexalon on Wednesday May 07 2014, @11:59AM

      by Thexalon (636) on Wednesday May 07 2014, @11:59AM (#40492)

      It's very simple, really: Eric Holder put forward a policy back in the Clinton administration that said, in a nutshell, don't punish important corporations enough to really hurt them. At this point, when they announce some big settlement, what they are actually announcing is how big a cut of the take the regulatory agency is getting.

      Also, obligatory Dave Chappelle sketch [cc.com].

      --
      The inverse of "I told you so" is "Nobody could have predicted"
      • (Score: 0, Troll) by Grishnakh on Wednesday May 07 2014, @01:35PM

        by Grishnakh (2831) on Wednesday May 07 2014, @01:35PM (#40519)

        Not only that, but every time these financial crimes come up in discussion, liberals will immediately chime in and and demand proof for these allegations of financial crimes, and defend the banksters.

        • (Score: 3, Insightful) by Thexalon on Wednesday May 07 2014, @01:55PM

          by Thexalon (636) on Wednesday May 07 2014, @01:55PM (#40530)

          Umm, which liberals are you talking about here? Elizabeth Warren, Bernie Sanders, and a bunch of other liberals on Congress have been demanding bankers be put in jail. Occupy Wall St was demanding, in part, that bankers be put in jail. Several MSNBC anchors have demanded that bankers be put in jail.

          Don't mistake Obama or Democratic Party hacks for liberals. (And yes, I don't mistake Republican Party hacks for conservatives, many of whom were appalled at the Bush administration.)

          --
          The inverse of "I told you so" is "Nobody could have predicted"
          • (Score: 1, Troll) by Grishnakh on Wednesday May 07 2014, @02:21PM

            by Grishnakh (2831) on Wednesday May 07 2014, @02:21PM (#40538)

            Bernie Sanders isn't a liberal, he's a socialist and an independent. In America, "liberal" equals "Democrat".

            Anyway, I'm talking about random liberals on the internet, who will always defend Obama no matter what. Since Obama and the other Dems refused to do anything about Wall Street, and the Dems are in bed with the banksters, the liberals are all for this.

            Don't mistake Obama or Democratic Party hacks for liberals.

            Sorry, but they're one in the same in America. Similarly, "conservative" equals "Republican". There's always some fringe people who try to argue otherwise ("no, they're not true liberals|conservatives. We're the true liberals|conservatives!!" See the No True Scotsman [wikipedia.org] fallacy).

  • (Score: 2, Informative) by Anonymous Coward on Wednesday May 07 2014, @05:57AM

    by Anonymous Coward on Wednesday May 07 2014, @05:57AM (#40427)

    Last time around, presidential candidates Jill Stein (Green Party) and Rocky Anderson (Justice Party) both said it was a top priority to put the banksters in jail.
    At least there would have been some prosecutions.

    -- gewg_

  • (Score: 5, Insightful) by Anonymous Coward on Wednesday May 07 2014, @06:00AM

    by Anonymous Coward on Wednesday May 07 2014, @06:00AM (#40428)

    OK so maybe those cases are complex. Maybe the accused stuck to the grey areas and never crossed the line. But this one doesn't seem so complex to me:
    https://en.wikipedia.org/wiki/MF_Global#October_20 11:_MF_Global_transfers_client_account_funds_to_it s_own_account [wikipedia.org]
    It's theft and breach of trust right? How many are in jail for it?

    If you did the same and transferred someone else's money to your own account without their permission, and people found out, you'd go to jail. Even if you transfer it back later.

  • (Score: 1, Insightful) by Anonymous Coward on Wednesday May 07 2014, @06:27AM

    by Anonymous Coward on Wednesday May 07 2014, @06:27AM (#40431)

    If you don't put the execs to prison for a long time but instead do some plea bargain bullshit, there will be no effect. Prices will change very little if at all. It's a collective punishment allowing the guilty to escape practically unscathed.

    Besides that this kind of treatment will really erode the credibility of the law at all levels.

    • (Score: 0) by Anonymous Coward on Wednesday May 07 2014, @01:35PM

      by Anonymous Coward on Wednesday May 07 2014, @01:35PM (#40520)

      Soooo good news bad news then.

      Bad news no one is going to jail about this. Good news no consequences if you do this same thing. Well now how to get in on that...

  • (Score: 0) by Anonymous Coward on Wednesday May 07 2014, @12:17PM

    by Anonymous Coward on Wednesday May 07 2014, @12:17PM (#40496)

    Is it possible to create a system such that there is no incentive to fuck it?

    • (Score: 1) by MozeeToby on Wednesday May 07 2014, @01:09PM

      by MozeeToby (1118) on Wednesday May 07 2014, @01:09PM (#40507)

      The fewer people fucking the system the higher the rewards for fucking the system. So the answer is probably "No".

    • (Score: 3, Funny) by khallow on Wednesday May 07 2014, @01:45PM

      by khallow (3766) Subscriber Badge on Wednesday May 07 2014, @01:45PM (#40524) Journal

      Sure, a live wall outlet.

  • (Score: 1) by GeminiDomino on Wednesday May 07 2014, @12:23PM

    by GeminiDomino (661) on Wednesday May 07 2014, @12:23PM (#40497)

    Many assume that federal authorities simply lacked the guts to go after powerful Wall Street bankers but according to Eisinger, the truth is more complicated. "During the past decade, the Justice Department suffered a series of corporate prosecutorial fiascos, which led to critical changes in how it approached white-collar crime. The department began to focus on reaching settlements rather than seeking prison sentences, which over time unintentionally deprived its ranks of the experience needed to win trials against the most formidable law firms."

    So they lacked the guts and, as a result, the chops for it. Thanks for clearing that up, Eisinger.

    --
    "We've been attacked by the intelligent, educated segment of our culture"
  • (Score: 0) by Anonymous Coward on Wednesday May 07 2014, @08:53PM

    by Anonymous Coward on Wednesday May 07 2014, @08:53PM (#40679)

    while the rest of us unlucky to get caught in the baleful gaze of a federal prosecutor get the book thrown at us.