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I have really no insight into the US legal system but to me this seems to be almost entirely because people charged with "white collar" crimes are relatively we

I have really no insight into the US legal system but to me this seems to be almost entirely because people charged with "white collar" crimes are relatively wealthy and can afford a very vigorous defense. There might be other issues as well such as - a white collar employee being bit smarter, in terms of covering their tracks, ie don't use email, only take via phone or face to face. This makes these crimes much tougher to figure out. - working in groups that ensure that everyone is equally guilty, ala the LIBOR fixing cabal. Having powerful friends is still a great deterrent to being charged with a crime. Look at the British child sex scandal. - these crimes are much less publicized and incendiary. It's easy to get some people worked up over drug or assault crimes as they can put a face to a victim but with white collar crime its much tougher. - their crimes tend not to affect other high power people. - white collar crimes tend to be more sophisticated. If you believe this then it's not a stretch to think that you need to have better law enforcement working on these cases. This has always been the knock on the rating agencies, Moodies, S&P and Fitch, is that they need to be as good as the wall street quants to understand the new products but if they were that good then they wouldn't be working for the rating agencies. I'm not sure I buy that argument completely but I believe that there is a bit of truth to it. I mean I know alot of quants on wall street and those that work for the rating agencies fall into two buckets, those that want to work 9-5 and those that aren't what I'd consider to be top tier quants. Just look at the 2008 financial crisis. White collar employee's got rich leading up to it. and then to fix it, the US flooded the markets with money meaning that white collar employee's made even more money when fixing the mess. Bernie Madoff's biggest failing was that he ripped off rich people.

coldcode 11y ago
It think it's easier to prosecute people who rip off individuals, as Bernie did, rather than ripping off the general public. It's easy for people to see harm in the faces of the harmed (be they rich or poor) rather than failing to follow a complex law with an even more complex scheme. The harm to the public may be terrible but if you can't easily explain things to lay people, you might have difficulty over many months of tedious testimony getting them to care.
- dnautics 11y ago
  I think the real problem is that these miscreants are only able to rip off the public because government policy pushes the general public into a position where they are exposed to the risk of dealing with fraudsters. For example, decades of policy encouraging unsustainable home ownership in the leadup to the housing crisis. More generally, a policy of monetary devaluation that nudges individuals and retirement accounts, etc. Into risky investments (instead of stashing under the mattress). Fictional regulatory reporting requirements that make it easier to create the veneer of propiety than actually exercise it, etc. So there is a problem that ultimately the government can't look too hard into these problems without making it glaringly obvious that the reason why the public is exposed to harm that would normally be against individuals is it's own fault.
- mason240 11y ago
  That's pretty similar to what my response was going to be. - a white collar crime probably doesn't have direct victim A victim of robbery will initiate the police to act. A violated regulation can't do the same.
  - TheOtherHobbes 11y ago
    White collar crime has plenty of indirect victims. Fixing LIBOR had very real life-changing consequences for many people. They weren't as direct as a knife attack, but they still made a huge difference to the financial - sometimes also the personal - opportunities available to many people. The difference is that most of those people would have had no idea they were being robbed. They would simply have had less money to spend - but they wouldn't have been aware why. In a fair world there would be immediate compensation for all victims in the form of basic recompense plus punitive damages. IMO that would be more effective in stopping white collar crime than the prospect of jail, because it would change the risk/reward profile and skew it more towards financial damage and loss of customer good will.
    - lmm 11y ago
      FWIW most "people in the street" got a net benefit from the LIBOR manipulation. The people on the losing side were mostly large traders - i.e. sovereign wealth funds and wealthy individuals (though admittedly also some mutual funds and similar organizations that ordinary folks invest with e.g. CALPERS).
nostromo 11y ago
Your analysis is inaccurate with regards to the article at hand. Rich, powerful people were on both sides of the Dewey & LeBoeuf case. This is an example of rich people ripping off other rich people (usually investors). All of cases listed in the article follow this pattern. However, you are correct with regards to the Libor scandal, which wasn't mentioned in this article directly, but would be a better example of serious crime against the public going almost entirely unprosecuted.
caseysoftware 11y ago
Well, former US Attorney General Eric Holder took back his old job at the white collar law firm that represents these guys. Here's the money quote: "Holder will reassume his lucrative partnership (he made $2.5 million the last year he worked there) and take his seat in an office that reportedly – this is no joke – was kept empty for him in his absence." Ref: http://www.rollingstone.com/politics/news/eric-holder-wall-street-double-agent-comes-in-from-the-cold-20150708 http://www.rollingstone.com/politics/news/eric-holder-wall-s...
- rcarrigan87 11y ago
  I'm not debating Eric Holder going back to his old gig isn't fishy, it certainly is. And the revolving door bt Wall Street and Washington is ridiculous. But RollingStone has the most slanted, sensational coverage on anything Wall Street. Their accounts aren't journalism.
  - shawn-furyan 11y ago
    By Rolling Stone, you mean Matt Taibbi. Because he's the only reason Rolling Stone covers Wallstreet at all. I'm not a fan of Taibbi's style, and I think that he jumps to biased conclusions. But I've read just about everything I've come across regarding the Financial crisis, and Taibbi has contributed substantial and important reporting to fill out the context of what exactly went down. To me, Taibbi is a pretty good source for facts, since he wears his biases so openly on his sleeves, it is trivial to account for when he does reach. He also has a completely different perspective and motivational drive than the Financial press beat reporters who are afraid to stray too far from the self-serving accepted wisdom that's developed in the financial industry, as well as the broad audience reporters who are mostly afraid to dive into the minutia. Taibbi is highly idiosyncratic, but his perspective is valuable as long as you're taking in a spectrum of views and have an ability to bring a sense of skepticism to reported claims.
    - twoodfin 11y ago
      I appreciate this comment, but it seems a little like saying that William Randolph Hearst had a "completely different perspective and motivational drive" when investigating the sinking of the USS Maine. I'm not sure that kind of 'reporting' is a net positive.
roymurdock 11y ago
Bernie Madoff failed to avoid jail time because he employed a ponzi scheme - a type of fraud that is is (somewhat) easily understood and has a legal precedent of being successfully prosecuted. It also has the tendency to blow up spectacularly when it unwinds, and Madoff refused to implicate anyone else in the scheme, making it easier to hand him a harsh sentence. His main accountant and auditor Frank DiPascali, on the other hand, cooperated fully with investigators and testified at the trial of 5 other high level members of the fraud. Although he could have been given over 100 years, he received 1 year home detention and 1 year of supervised release during his final sentencing in May 2015 (6 years after pleading guilty). So it's not really about ripping off rich people, it's more about committing fraud in a very legally and technically opaque manner, passing responsibility down the chain (LIBOR), and never EVER committing it in a manner that can be recorded or traced. This last point is widely believed to be the reason why GS recently fired ~30 new analysts. If they were negligent enough to cheat on a test in a trackable manner (googling answers on company computers), they represented a huge potential liability to the firm.
- Kalium 11y ago
  If nobody can prove that you committed a crime, then you haven't committed a crime.

coldcode 11y ago

It think it's easier to prosecute people who rip off individuals, as Bernie did, rather than ripping off the general public. It's easy for people to see harm in the faces of the harmed (be they rich or poor) rather than failing to follow a complex law with an even more complex scheme. The harm to the public may be terrible but if you can't easily explain things to lay people, you might have difficulty over many months of tedious testimony getting them to care.

dnautics 11y ago
I think the real problem is that these miscreants are only able to rip off the public because government policy pushes the general public into a position where they are exposed to the risk of dealing with fraudsters. For example, decades of policy encouraging unsustainable home ownership in the leadup to the housing crisis. More generally, a policy of monetary devaluation that nudges individuals and retirement accounts, etc. Into risky investments (instead of stashing under the mattress). Fictional regulatory reporting requirements that make it easier to create the veneer of propiety than actually exercise it, etc. So there is a problem that ultimately the government can't look too hard into these problems without making it glaringly obvious that the reason why the public is exposed to harm that would normally be against individuals is it's own fault.
mason240 11y ago
That's pretty similar to what my response was going to be. - a white collar crime probably doesn't have direct victim A victim of robbery will initiate the police to act. A violated regulation can't do the same.
- TheOtherHobbes 11y ago
  White collar crime has plenty of indirect victims. Fixing LIBOR had very real life-changing consequences for many people. They weren't as direct as a knife attack, but they still made a huge difference to the financial - sometimes also the personal - opportunities available to many people. The difference is that most of those people would have had no idea they were being robbed. They would simply have had less money to spend - but they wouldn't have been aware why. In a fair world there would be immediate compensation for all victims in the form of basic recompense plus punitive damages. IMO that would be more effective in stopping white collar crime than the prospect of jail, because it would change the risk/reward profile and skew it more towards financial damage and loss of customer good will.
  - lmm 11y ago
    FWIW most "people in the street" got a net benefit from the LIBOR manipulation. The people on the losing side were mostly large traders - i.e. sovereign wealth funds and wealthy individuals (though admittedly also some mutual funds and similar organizations that ordinary folks invest with e.g. CALPERS).

nostromo 11y ago

Your analysis is inaccurate with regards to the article at hand. Rich, powerful people were on both sides of the Dewey & LeBoeuf case. This is an example of rich people ripping off other rich people (usually investors). All of cases listed in the article follow this pattern. However, you are correct with regards to the Libor scandal, which wasn't mentioned in this article directly, but would be a better example of serious crime against the public going almost entirely unprosecuted.

caseysoftware 11y ago

Well, former US Attorney General Eric Holder took back his old job at the white collar law firm that represents these guys. Here's the money quote: "Holder will reassume his lucrative partnership (he made $2.5 million the last year he worked there) and take his seat in an office that reportedly – this is no joke – was kept empty for him in his absence." Ref: http://www.rollingstone.com/politics/news/eric-holder-wall-street-double-agent-comes-in-from-the-cold-20150708 http://www.rollingstone.com/politics/news/eric-holder-wall-s...

rcarrigan87 11y ago
I'm not debating Eric Holder going back to his old gig isn't fishy, it certainly is. And the revolving door bt Wall Street and Washington is ridiculous. But RollingStone has the most slanted, sensational coverage on anything Wall Street. Their accounts aren't journalism.
- shawn-furyan 11y ago
  By Rolling Stone, you mean Matt Taibbi. Because he's the only reason Rolling Stone covers Wallstreet at all. I'm not a fan of Taibbi's style, and I think that he jumps to biased conclusions. But I've read just about everything I've come across regarding the Financial crisis, and Taibbi has contributed substantial and important reporting to fill out the context of what exactly went down. To me, Taibbi is a pretty good source for facts, since he wears his biases so openly on his sleeves, it is trivial to account for when he does reach. He also has a completely different perspective and motivational drive than the Financial press beat reporters who are afraid to stray too far from the self-serving accepted wisdom that's developed in the financial industry, as well as the broad audience reporters who are mostly afraid to dive into the minutia. Taibbi is highly idiosyncratic, but his perspective is valuable as long as you're taking in a spectrum of views and have an ability to bring a sense of skepticism to reported claims.
  - twoodfin 11y ago
    I appreciate this comment, but it seems a little like saying that William Randolph Hearst had a "completely different perspective and motivational drive" when investigating the sinking of the USS Maine. I'm not sure that kind of 'reporting' is a net positive.

roymurdock 11y ago

Bernie Madoff failed to avoid jail time because he employed a ponzi scheme - a type of fraud that is is (somewhat) easily understood and has a legal precedent of being successfully prosecuted. It also has the tendency to blow up spectacularly when it unwinds, and Madoff refused to implicate anyone else in the scheme, making it easier to hand him a harsh sentence. His main accountant and auditor Frank DiPascali, on the other hand, cooperated fully with investigators and testified at the trial of 5 other high level members of the fraud. Although he could have been given over 100 years, he received 1 year home detention and 1 year of supervised release during his final sentencing in May 2015 (6 years after pleading guilty). So it's not really about ripping off rich people, it's more about committing fraud in a very legally and technically opaque manner, passing responsibility down the chain (LIBOR), and never EVER committing it in a manner that can be recorded or traced. This last point is widely believed to be the reason why GS recently fired ~30 new analysts. If they were negligent enough to cheat on a test in a trackable manner (googling answers on company computers), they represented a huge potential liability to the firm.

Kalium 11y ago
If nobody can prove that you committed a crime, then you haven't committed a crime.