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Except for all the illegal stuff they did to cause the crisis, it wasn’t illegal? No, you couldn’t prosecute people just for causing the crisis. But there was

Except for all the illegal stuff they did to cause the crisis, it wasn’t illegal? No, you couldn’t prosecute people just for causing the crisis. But there was plenty of crisis-causing illegal activity that could have been prosecuted.

rayiner 9y ago
Like? The most obvious would be falsifying documentation in connection with mortgages ultimately sold to Fannie/Freddie. But that’s just capture a bunch of loan agents, not satisfy anyone’s blood lust.
- pjc50 9y ago
  Robo-signing definitely was illegal, and everyone involved in it (especially the supervisors) should have been jailed for fraud. The Quinn family who blew up Anglo-Irish bank eventually did get short jail sentences in addition to their personal bankruptcy: http://www.bbc.co.uk/news/uk-northern-ireland-20167760 http://www.bbc.co.uk/news/uk-northern-ireland-20167760
- mikeash 9y ago
  All those loan agents were falsifying loan documents with zero direction or knowledge from above?
- Klinky 9y ago
  Multiple fraud violations[1][2]? It's interesting how Martha Stewart was put in prison for insider trading, but the financial industry's Culture of Fraud lead to practically no one going to prison. There really needs to be a way to hold top executives accountable for the culture they've created, such as at Well Fargo where millions of fraudulent accounts were opened due to the intense pressure created by executive growth targets. This is similar to financial firms bundling shitty loans, paying off a ratings agency to call it gold while knowing full well it's full of shit, and then passing those loans off golden investment opportunities. Yet the people who get caught are those at the bottom. If you create a culture that encourages bad things(fraud) and do not have checks and balances in place to catch bad behavior(fraud), then you should be held accountable. Typically the executives state they had "no knowledge of what was going on" in the company/department they were supposed to be running and were paid handsomely to do. 1. http://www.nytimes.com/2011/11/08/business/in-sec-fraud-cases-banks-make-and-break-promises.html http://www.nytimes.com/2011/11/08/business/in-sec-fraud-case... 2. https://www.sec.gov/spotlight/enf-actions-fc.shtml https://www.sec.gov/spotlight/enf-actions-fc.shtml
  - pjc50 9y ago
    Fargo perhaps not the best example - they weren't punished because the company as a whole lost money, the targets had effectively set up the frontline employees to defraud both the company and the customers.
    - FireBeyond 9y ago
      So if you don't make a profit from a crime, you shouldn't be punished for that crime? That's like saying if I attempt to steal something from a store, security stops me, retrieves the item, then I shouldn't be punished because I didn't get anything from my crime, in fact it cost me money, in gas, going to the store to steal from it... The "they were defrauding us too" is a weaselly argument - it can be argued that when you are an executive, you represent the company, and directing people to do something, can they really be said to be deceiving/defrauding you by _doing as you directed_?
      - pjc50 9y ago
        My mistake, they actually got fined too https://www.nytimes.com/2016/09/09/business/dealbook/wells-fargo-fined-for-years-of-harm-to-customers.html https://www.nytimes.com/2016/09/09/business/dealbook/wells-f...
    - Klinky 9y ago
      Not true, executives pushed their high-pressure upselling scheme downstream without properly following up on if the goals of the program were realistic or viable. They fired or punished employees calling into the ethics line. Their high-pressure policies created this culture of fraud, and they looked the other way. So long as the money kept rolling in, they didn't care how it was getting done.
  - rayiner 9y ago
    The incidents you point to were rightfully prosecuted as civil fraud. Fraud can be either civil or criminal. Criminal fraud is something like taking investments from the general public and just blowing the money on cocaine. Lying to sophosticated counterparties in a business transaction is classic civil fraud.

rayiner 9y ago

Like? The most obvious would be falsifying documentation in connection with mortgages ultimately sold to Fannie/Freddie. But that’s just capture a bunch of loan agents, not satisfy anyone’s blood lust.

pjc50 9y ago
Robo-signing definitely was illegal, and everyone involved in it (especially the supervisors) should have been jailed for fraud. The Quinn family who blew up Anglo-Irish bank eventually did get short jail sentences in addition to their personal bankruptcy: http://www.bbc.co.uk/news/uk-northern-ireland-20167760 http://www.bbc.co.uk/news/uk-northern-ireland-20167760
mikeash 9y ago
All those loan agents were falsifying loan documents with zero direction or knowledge from above?
Klinky 9y ago
Multiple fraud violations[1][2]? It's interesting how Martha Stewart was put in prison for insider trading, but the financial industry's Culture of Fraud lead to practically no one going to prison. There really needs to be a way to hold top executives accountable for the culture they've created, such as at Well Fargo where millions of fraudulent accounts were opened due to the intense pressure created by executive growth targets. This is similar to financial firms bundling shitty loans, paying off a ratings agency to call it gold while knowing full well it's full of shit, and then passing those loans off golden investment opportunities. Yet the people who get caught are those at the bottom. If you create a culture that encourages bad things(fraud) and do not have checks and balances in place to catch bad behavior(fraud), then you should be held accountable. Typically the executives state they had "no knowledge of what was going on" in the company/department they were supposed to be running and were paid handsomely to do. 1. http://www.nytimes.com/2011/11/08/business/in-sec-fraud-cases-banks-make-and-break-promises.html http://www.nytimes.com/2011/11/08/business/in-sec-fraud-case... 2. https://www.sec.gov/spotlight/enf-actions-fc.shtml https://www.sec.gov/spotlight/enf-actions-fc.shtml
- pjc50 9y ago
  Fargo perhaps not the best example - they weren't punished because the company as a whole lost money, the targets had effectively set up the frontline employees to defraud both the company and the customers.
  - FireBeyond 9y ago
    So if you don't make a profit from a crime, you shouldn't be punished for that crime? That's like saying if I attempt to steal something from a store, security stops me, retrieves the item, then I shouldn't be punished because I didn't get anything from my crime, in fact it cost me money, in gas, going to the store to steal from it... The "they were defrauding us too" is a weaselly argument - it can be argued that when you are an executive, you represent the company, and directing people to do something, can they really be said to be deceiving/defrauding you by _doing as you directed_?
    - pjc50 9y ago
      My mistake, they actually got fined too https://www.nytimes.com/2016/09/09/business/dealbook/wells-fargo-fined-for-years-of-harm-to-customers.html https://www.nytimes.com/2016/09/09/business/dealbook/wells-f...
  - Klinky 9y ago
    Not true, executives pushed their high-pressure upselling scheme downstream without properly following up on if the goals of the program were realistic or viable. They fired or punished employees calling into the ethics line. Their high-pressure policies created this culture of fraud, and they looked the other way. So long as the money kept rolling in, they didn't care how it was getting done.
- rayiner 9y ago
  The incidents you point to were rightfully prosecuted as civil fraud. Fraud can be either civil or criminal. Criminal fraud is something like taking investments from the general public and just blowing the money on cocaine. Lying to sophosticated counterparties in a business transaction is classic civil fraud.