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The problem with calling them criminals is that they didn't break laws. Maybe that's the underlying cause of all this.

by TwoBit 9y ago

colechristensen 9y ago
That has not been judged. In _The Chickenshit Club_ Jesse Eisinger argues that prosecutors are just cowards unwilling to take the reputation of losing a case so they simply refuse to go after cases with any small chance of losing. http://www.npr.org/2017/07/11/536642560/is-the-justice-department-shying-away-from-to-prosecuting-corporations http://www.npr.org/2017/07/11/536642560/is-the-justice-depar...
blitmap 9y ago
Are they not bound by ethical rules of conduct like lawyers? :o
Tuna-Fish 9y ago
That's questionable. The most common way that liability for fraud was offloaded was to have the bank purchase the service of validating loan applications from some willing schmuck. That is, by law the originating institution is required to verify that the applications it processes meets some guidelines. Since the applications absolutely did not, and the bank was unwilling to lie about it itself, what they did was purchase the service of looking through the application from whoever who was willing to sign that the application meets requirements for the least amount of money, and over time picking the "institutions" that had the lowest denial rates (which of course trended to 0). This way, the defense of the bankers was essentially: "We did not defraud our customers, instead our dastardly subcontractor did, and we had absolutely nothing to do with it." However, I bet that a jury could be convinced that they had both sufficient information that they should have known that their subcontractors were fraudulently approving applications, and a duty to make this not happen. The ultimate reason why no heads rolled is that those heads are extraordinarily politically connected.
- saimiam 9y ago
  >The ultimate reason why no heads rolled is that those heads are extraordinarily politically connected. This is probably very true That said, in business, if someone is willing to put their signature on a dotted line, it isn't your job to remind them of its implications. Personal example: a friend of mine sold his house recently. The HVAC system was suspected but not known to have a leak - it had lost about a pound of coolant in a month. The leak was suspected a few days before close. He got the HVAC refilled, told the technician to write "may have a small leak" in his report, and sent this report to the buyer. The buyer agreed to close the deal anyway. Morally, his job was to properly identify and fix the leak before selling the house. In reality, the buyer signed the dotted line given the information available to her. If the HVAC now needs repairs costing several thousand dollars, no judge is going to tell him to accept liability.
  - ScottBurson 9y ago
    I don't think that example applies to this situation. In this case, the people doing the signing were hired by the banks to do it. The banks are surely responsible -- ethically, and probably legally -- for the actions of their agents, even if the only way they directed these people was by firing the ones who tried to act responsibly.
    - saimiam 9y ago
      I used the personal example to elaborate on the idea that when you're transacting in business, you sometimes provide as little information as legally required. If the other party signs the dotted line, you are basically home free. I wasn't trying to make a point about contractors vs employee.
    - jjeaff 9y ago
      If I hire employees to sell my product, and those employees break the law to sell my product, even though I have policies in place saying they should NOT break the law. Am I liable for the actions of my employees?
sundvor 9y ago
Indeed. And: How do you define criminal? In my mind it's someone doing something which is morally corrupt, which should be punished by the just. These guys by their reckless profiteering performed one of the largest stick ups in recent history yet walked away scot-free, having stolen from thousands of families on a grand scale that no petty "in the flesh" stick up criminal could. Standing on the outside, it's very hard to see the laws as not being a massive inside job - the top tier looking after the top tier of society.
rando444 9y ago
I don't understand how this myth persists. Of course they broke laws. Do you think Goldman Sachs would have paid out a 5 billion dollar settlement if they thought they could win in a courtroom?.. of course not. The problem isn't that they didn't break laws.. it's the justice department's fault for accepting cash settlements instead of actually taking people to trial and holding them accountable. The criminals always win in this scenario because nobody goes to jail, the fines are less than the profit, and there are no lessons to be learned other than to not get caught. Matt Taibbi does a really good job of examining this shift in the Justice Department's strategy in his book The Divide: American Injustice in the Age of the Wealth Gap, which I recommend if this is a subject you are interested in.
- jjeaff 9y ago
  The reason in many cases they accept fines instead of jail time is because it is very hard to pin the actions of large corporations on any one person. What is one specific law that one of these executives broke? I have yet to see anyone specify what law they broke. Just like the Wells Fargo CEO, bad incentives are not illegal. He didn't personally break any laws or illegally sign anyone up for an account without their knowledge. He may have even known that a bunch of their accounts were fake, but there is no evidence he had any knowledge of specific accounts.

The problem with calling them criminals is that they didn't break laws. Maybe that's the underlying cause of all this.

by TwoBit 9y ago

The problem with calling them criminals is that they didn't break laws. Maybe that's the underlying cause of all this.

That has not been judged. In _The Chickenshit Club_ Jesse Eisinger argues that prosecutors are just cowards unwilling to take the reputation of losing a case so they simply refuse to go after cases with any small chance of losing. http://www.npr.org/2017/07/11/536642560/is-the-justice-department-shying-away-from-to-prosecuting-corporations http://www.npr.org/2017/07/11/536642560/is-the-justice-depar...

blitmap 9y ago

Are they not bound by ethical rules of conduct like lawyers? :o

Tuna-Fish 9y ago

That's questionable. The most common way that liability for fraud was offloaded was to have the bank purchase the service of validating loan applications from some willing schmuck. That is, by law the originating institution is required to verify that the applications it processes meets some guidelines. Since the applications absolutely did not, and the bank was unwilling to lie about it itself, what they did was purchase the service of looking through the application from whoever who was willing to sign that the application meets requirements for the least amount of money, and over time picking the "institutions" that had the lowest denial rates (which of course trended to 0). This way, the defense of the bankers was essentially: "We did not defraud our customers, instead our dastardly subcontractor did, and we had absolutely nothing to do with it." However, I bet that a jury could be convinced that they had both sufficient information that they should have known that their subcontractors were fraudulently approving applications, and a duty to make this not happen. The ultimate reason why no heads rolled is that those heads are extraordinarily politically connected.

saimiam 9y ago
>The ultimate reason why no heads rolled is that those heads are extraordinarily politically connected. This is probably very true That said, in business, if someone is willing to put their signature on a dotted line, it isn't your job to remind them of its implications. Personal example: a friend of mine sold his house recently. The HVAC system was suspected but not known to have a leak - it had lost about a pound of coolant in a month. The leak was suspected a few days before close. He got the HVAC refilled, told the technician to write "may have a small leak" in his report, and sent this report to the buyer. The buyer agreed to close the deal anyway. Morally, his job was to properly identify and fix the leak before selling the house. In reality, the buyer signed the dotted line given the information available to her. If the HVAC now needs repairs costing several thousand dollars, no judge is going to tell him to accept liability.
- ScottBurson 9y ago
  I don't think that example applies to this situation. In this case, the people doing the signing were hired by the banks to do it. The banks are surely responsible -- ethically, and probably legally -- for the actions of their agents, even if the only way they directed these people was by firing the ones who tried to act responsibly.
  - saimiam 9y ago
    I used the personal example to elaborate on the idea that when you're transacting in business, you sometimes provide as little information as legally required. If the other party signs the dotted line, you are basically home free. I wasn't trying to make a point about contractors vs employee.
  - jjeaff 9y ago
    If I hire employees to sell my product, and those employees break the law to sell my product, even though I have policies in place saying they should NOT break the law. Am I liable for the actions of my employees?

sundvor 9y ago

Indeed. And: How do you define criminal? In my mind it's someone doing something which is morally corrupt, which should be punished by the just. These guys by their reckless profiteering performed one of the largest stick ups in recent history yet walked away scot-free, having stolen from thousands of families on a grand scale that no petty "in the flesh" stick up criminal could. Standing on the outside, it's very hard to see the laws as not being a massive inside job - the top tier looking after the top tier of society.

rando444 9y ago

I don't understand how this myth persists. Of course they broke laws. Do you think Goldman Sachs would have paid out a 5 billion dollar settlement if they thought they could win in a courtroom?.. of course not. The problem isn't that they didn't break laws.. it's the justice department's fault for accepting cash settlements instead of actually taking people to trial and holding them accountable. The criminals always win in this scenario because nobody goes to jail, the fines are less than the profit, and there are no lessons to be learned other than to not get caught. Matt Taibbi does a really good job of examining this shift in the Justice Department's strategy in his book The Divide: American Injustice in the Age of the Wealth Gap, which I recommend if this is a subject you are interested in.

jjeaff 9y ago
The reason in many cases they accept fines instead of jail time is because it is very hard to pin the actions of large corporations on any one person. What is one specific law that one of these executives broke? I have yet to see anyone specify what law they broke. Just like the Wells Fargo CEO, bad incentives are not illegal. He didn't personally break any laws or illegally sign anyone up for an account without their knowledge. He may have even known that a bunch of their accounts were fake, but there is no evidence he had any knowledge of specific accounts.