Sizing up the Fed's proescution record
The dearth of financial prosecutions has been endlessly debated. Frontline has weighed in with a lengthy exploration of the issue. One interesting side question is how the lack of criminal charges in the post-2008 period compares with the number of criminal charges in past crises.
In some ways, the government has been fabulously successful in prosecuting financial crime such as the on-going insider trading investigations. But in other areas the government has a woeful record. To this day, critics bemoan the fact that not a single high-level executive of a top Wall Street firm faced criminal charges. At times, prosecutors seemed tantalizingly close. Charges against Lehman Brothers former executive, including the former CEO and CFO, seemed imminent at moments. But in the end, it appears the prosecutors just didn't have the goods.
Frontline notes that "virtually no bankers were jailed in the wake of the Great Depression, though not for lack of trying…However, because banking laws did not guard against the kind of speculation that fueled the crash, most escaped prosecution."
The savings and loan crisis of the 1980s was another story all together. More than 1,000 bankers were charged by the Justice Department.
So what's the difference?
Frontline notes that, "One key tool used during the S&L crisis was criminal referrals from regulators to government prosecutors, explained William Black, who served as the government's point man for litigation in the S&L crisis."
- here's the article