Lack of criminal prosecutions a lingering issue
Banking industry critics have been focused on the dearth of prosecutions, especially criminal prosecutions, in the wake of the mortgage meltdown.
Reuters has weighed in with a long look at this issue, noting that "federal prosecutors have stayed on the sidelines, even as judges around the country are pointing fingers at possible wrongdoing."
It should be noted that the various federal agencies have already inked consent decrees with the top mortgage banks and services and with MERS. That resulted in some remediation on paper anyway. And we have seen a few high-profile executives targeted in civil cases, such as Angelo Mozilo. Just recently, the SEC took aim at the former CEOs and four other top executives at Fannie Mae and Freddie Mac.
But criminal prosecutions apparently are much harder, and so far, the Department of Justice just hasn't come up with the goods to charge anyone. My sense is the big courtroom loss against Bear Stearns fund managers Ralph Cioffi and Matthew Tannin really chilled the effort to bring criminal prosecutions, as it underscored just how weak email evidence can be before a jury. Had that case gone the other way, we may have seen more prosecutions. As of now, it does not look like a big fish will be criminally charged. The last great target just might be Jon Corzine of MF Global.
- here's the article