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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)

#61

Post by kasey_junk »

gfiorav wrote: post #49

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 h…

Lehman Brothers, a bank founded in 1847 and the very epitome of investment bank, went out of business and was not bailed out due to the 2008 events.

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

#62

Post by actually_a_dog »

rspoerri wrote: post #50
rspoerri wrote: post #37

Earlier quoted context omitted.

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"

"You keep using that word. I do not think it means what you think it means."

* Inigo Montoya

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

#63

Post by nimbius »

a good book to read about this lack of prosecution is called "the chickenshit club" by Jesse Eisinger. In it the author explores prosecution paralysis brought on by a fear of destabilizing markets, and that this fear ultimately led to fines being preferred over jailtime. it also dives into the revolving door between prosecutors of these organizations and the organizations themselves, and the fact that no prosecutor wants a losing case on their record as it may adversely affect their chance of career success.

Its also interesting to note from the book that a CEO fired from a company and indicted may continue to receive payments or parachutes from that company in order to fight government charges and keep quiet about improprieties, whereas other types of criminals see all assets frozen upon such criminal proceedings.

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

#64

Post by InitialLastName »

rspoerri wrote: post #23
actually_a_dog wrote: post #22

Earlier quoted context omitted.

Socialism is not when the government does stuff.

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.

The government pooling resources (collected from the people) to control an industry (either by mandate or by providing an option that out-competes the private sector) for the benefit of the people is socialism. An industry collapsing and telling the government "give us money with no strings attached or we'll take the economy down with us" is a hostage crisis.

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

#65

Post by taway2021s »

spamizbad wrote: post #56
taway2021s wrote: post #31

Earlier quoted context omitted.

Sure. Lets start with an easy example. Why didnt any Directors at Goldman Sachs serve prison time for knowingly bundling Synthetic CDOs with bad CDS that they internally know were garbage? They sold these to pension funds, and other public entities. There were documented losses. There are documented emails with full internal discussion on how bad these investments were. (documented with emails.) Note there was a civi…

The message that was drilled into people during the financial crisis was: punishing people for these actions would stifle innovation and risk taking in the financial services, which could threaten US financial hegemony.

There is a pretty clear line between innovation, risk taking, and fraud. Intent can be shown based on firms' internal positions and emails (e.g., Goldman Sachs was internally short these products and make a lot of money both by selling the bad products, and then again on their bet against the products.: https://www.nytimes.com/2009/12/24/business/24trading.html)

They were taking toxic waste, putting it into cleanly packaged securities, and selling them to pension funds and others who then lost over a $1B: https://www.reuters.com/article/us-goldmansachs-abacus-factb...

(Plaintiffs claim over $13B in losses: https://www.investorlawyers.com/blog/investors-continue-go-g...)

https://www.ft.com/content/4798ae22-f552-11e2-b4f8-00144feab...

Internally it was a joke they were selling this garbage:

QUOTE: " Please use the sharing tools found via the share button at the top or side of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. Email licensing@ft.com to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found at https://www.ft.com/tour. https://www.ft.com/content/4798ae22-f552-11e2-b4f8-00144feab...

Former Goldman Sachs trader Fabrice Tourre said he “deeply” regretted an email in which he joked about selling subprime mortgage bonds “to widows and orphans” following a grilling from lawyers for the US Securities and Exchange Commission."

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

#66

Post by throwaway2048 »

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.

how exactly is this not using taxpayer money? It carried a ton of risk and likelyhood said companies would default and the money would never have been repaid.

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

#67

Post by actually_a_dog »

InitialLastName wrote: post #64
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.

The government pooling resources (collected from the people) to control an industry (either by mandate or by providing an option that out-competes the private sector) for the benefit of the people is socialism. An industry collapsing and telling the government "give us money with no strings attached or we'll take the economy down with us" is a hostage crisis.

Nationalizing industries is also not socialism.

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

#68

Post by paulpauper »

gfiorav wrote: post #49

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 h…

but income taxes have continued to fall in spite of such bailouts, suggesting that no one actually had to pay for it. It was not anyone's money but rather printed off with 0 percent yielding bonds. The huge post-2009 bull market and economic expansion in hindsight makes the bailouts one of the most successful govt. programs ever even if maligned.

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

#70

Post by NovemberWhiskey »

nickff wrote: post #30
colpabar wrote: post #15

Earlier quoted context omitted.

If I "deceive myself" by thinking I can drive with my eyes closed, and I crash my car and destroy someone's property, aren't I then required to pay the damages or face jail time? It's odd that we can all agree on cases where the number of participants is small, but for some reason, if an entire economy is affected, we have to pretend that the people responsible weren't actually responsible and shouldn't be punished i…

I would agree that the self-deceiving fiduciary should be held financially responsible for the impact of their blindness, but I’m not sure all these cases are actually crimes.

I'm sure you know this but a broker-dealer (which is what we're primarily talking about in the context of Wall St banks) doesn't have a fiduciary duty to their counterparty.
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