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Why didn’t any Wall Street CEOs go to jail after the financial crisis? (2019)

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Re: Why didn’t any Wall Street CEOs go to jail after the financial crisis? (2019)

#41

Post by the-dude »

AlexandrB wrote: post #14
nickff wrote: post #8

These stories all seem to ride on similar popular sentiments: 'bad things happened, and rich people were involved, so they should go to jail'. Having read a few of the books cited at the bottom, I have been repeatedly surprised at how these financial disasters came to be; it often seems like the people at the top were deceiving themselves more than anyone else. Bethany McLean's other book, "The Smartest Guys in the R…

In many other jobs, gross negligence resulting in billions of dollars of property damage can get you jail time. Why is it ok for the people at the top of these financial disasters to be immune? Whether they're deceiving themselves is irrelevant. Drunk drivers deceive themselves about their ability to drive safely, we still put them in jail.

Do you have (many) examples?

And I very much doubt many drunk drivers end up in jail. AFAIK they are not even prosecuted for manslaughter or murder if they kill.

Re: Why didn’t any Wall Street CEOs go to jail after the financial crisis? (2019)

#42

Post by rkk3 »

actually_a_dog wrote: post #29
kasey_junk wrote: post #26

Earlier quoted context omitted.

Worth noting that if you were going to go after loan fraud you likely would be charging low level folks in the mortgage pipeline (appraisers, mortgage brokers, etc) or even the borrowers, not Wall Street CEOs.

Not at the scale noted in the article I linked: > Mortgage originators that emphasized profit-fueled quantity over loan quality, which resulted in the misreporting of key financial information in 48% of loans securitized by nongovernment agencies; If 48% of your company's financial transactions were fraudulent, would you expect the CEO to bear responsibility for that? At that point, I'd expect to see a RICO case, or…

The corruption may be rampant but those aren't "Wall Street" jobs. Countrywide was based out of Calabasas, California.

Re: Why didn’t any Wall Street CEOs go to jail after the financial crisis? (2019)

#44

Post by actually_a_dog »

rspoerri wrote: post #37
actually_a_dog wrote: post #25

Earlier quoted context omitted.

No, that's called paying taxes and funding a government. I'd suggest you crack a political science textbook if you want to actually know what socialism is.

So goverment healthcare is not a socialistic system? The public infrastructure that is built using taxes and can be used by anyone and is owned by the goverment which represents the inhabitants is not socialistic? wikipedia: While no single definition encapsulates the many types of socialism,[12] social ownership is the one common element. what, if not a socialistic system, is it then in your opinion?

No, those things are not socialist. As I said, if you want to learn what socialism is, go crack a book.

Re: Why didn’t any Wall Street CEOs go to jail after the financial crisis? (2019)

#45

Post by NovemberWhiskey »

taway2021s wrote: post #36
kasey_junk wrote: post #26

Earlier quoted context omitted.

Worth noting that if you were going to go after loan fraud you likely would be charging low level folks in the mortgage pipeline (appraisers, mortgage brokers, etc) or even the borrowers, not Wall Street CEOs.

You dont necessarily need to charge the Wall Street CEOs. You can charge the Senior Managing Director of Structured Products. Or MD of Structured Products banking/trading/risk/whatever. There were plenty of individuals who set policy to enable this. No need for a scarecrow argument about CEO or bust. I could literally look thru Linked In or a Bloomberg Terminal and figure out who the responsible parties are. Too bad…

>You can charge the Senior Managing Director of Structured Products

... like Kareem Serageldin. Who went to prison.

Re: Why didn’t any Wall Street CEOs go to jail after the financial crisis? (2019)

#46

Post by rspoerri »

zigradett wrote: post #35
rspoerri wrote: post #23

Earlier quoted context omitted.

Socialism is when all the people of a country put theyr money together to pay for a system. Such as your taxes or a goverment healthcare. The banks have been rescured by such money.

Someone also needs to put to rest the "The Banks were bailed out using taxpayer money!" scandal. Based on what I heard, TARP the Troubled Asset Relief Program, bought a small percentage of those hedge funds and investment banks that were in danger of going under, then let them slowly buy their own shares back over a number of years ... ..... and the "taxpayers" got all their money back.

"Troubled Assets Relief Program (TARP) | U.S. Department of the Treasury Troubled Assets Relief Program (TARP)" . Seems very goverment to me...

It doesnt matter if its a loan. A lot of businesses would be profitable if you would give them 2 billion dollars. Just invest them in a diverse portfolio and real estates. And you are profitable in a short time. Getting that money in the first hand is whats difficult.

Re: Why didn’t any Wall Street CEOs go to jail after the financial crisis? (2019)

#47

Post by notabanker »

jollybean wrote: post #18
bawolff wrote: post #5

Articles like this never seem to make the case for which crimes were specificly commited. They always talk about the fallout of the financial crisis (losing money on wall street isnt a crime afaik). Idk much about this topic, so im sure crimes could be involved, but its weird how these articles dont start with why didn't someone go to jail for .

Yes, it's bad populism to talk about crimes and then never bother to explain them. There's nuance in explaining systematic failure, but not one that most people couldn't grasp if well written in a few paragraphs. A lot of 'small bad decisions' at the loan level encouraged by an aggressive culture, a failure in ratings, and CEO's to mild to look too intently into the VP Retail Banking's mortgage profits ... and the wh…

When you're talking about something as vast as the Great Financial Crisis that led to a monetary policy with no historical precedent (still in effect btw), you simply cannot summarize it in an article.

It is simply Too Big To Describe, to paraphrase the favorite mantra of the era.

I've noted certain articles and books in another comment above. Those should help get up to speeed.

Re: Why didn’t any Wall Street CEOs go to jail after the financial crisis? (2019)

#48

Post by kasey_junk »

actually_a_dog wrote: post #29
kasey_junk wrote: post #26

Earlier quoted context omitted.

Worth noting that if you were going to go after loan fraud you likely would be charging low level folks in the mortgage pipeline (appraisers, mortgage brokers, etc) or even the borrowers, not Wall Street CEOs.

Not at the scale noted in the article I linked: > Mortgage originators that emphasized profit-fueled quantity over loan quality, which resulted in the misreporting of key financial information in 48% of loans securitized by nongovernment agencies; If 48% of your company's financial transactions were fraudulent, would you expect the CEO to bear responsibility for that? At that point, I'd expect to see a RICO case, or…

I probably would but proving that they acted _criminally_ would be hard. You can’t just wave your hands and make up a law they broke.

Meanwhile, that number likely means that the borrowers lied on those same applications. That’s where the fraud actually occurred. And would be easy to prove.

Re: Why didn’t any Wall Street CEOs go to jail after the financial crisis? (2019)

#49

Post by gfiorav »

It's astonishing how banks (saved with your money) can go home scotch-free, and hedge funds (that will die for their recklessness) get all the blame.

You see this through policy. Why ban short selling? It's really dumb if you ask me.

The banker investors that are used to taking risk and not caring precisely becuase they get their comission and the bank is saved (too big to fail) are the irresponsible people here.

A hedge fund manager will ride or die with their risk tolerance.

Re: Why didn’t any Wall Street CEOs go to jail after the financial crisis? (2019)

#50

Post by rspoerri »

rspoerri wrote: post #37
actually_a_dog wrote: post #25

Earlier quoted context omitted.

No, that's called paying taxes and funding a government. I'd suggest you crack a political science textbook if you want to actually know what socialism is.

So goverment healthcare is not a socialistic system? The public infrastructure that is built using taxes and can be used by anyone and is owned by the goverment which represents the inhabitants is not socialistic? wikipedia: While no single definition encapsulates the many types of socialism,[12] social ownership is the one common element. what, if not a socialistic system, is it then in your opinion?

just because you say doesnt make it right. If you know so much better, you would be able to write down what it is instead.

maybe read jcranmer's response above. citing him: "government provision of services (are) a hallmark of socialism"

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