In the USA they just buy the way out of the system - I mean look at all the people in prison for the default swaps and banking scandals. Oh wait, there aren't any.
There are various tiers in the intelligence of criminals.
Tier 1: Get caught. Go to jail.
Tier 2: Get caught. "Fix" the legal progress in your favor. Don't go to jail.
Tier 3: Bribe the people doing the enforcement. Don't get caught, because there is no one to catch you.
Tier 4: Bribe the people doing the law writing. Don't get caught, because you aren't doing anything "wrong" (technically speaking).
Tier 5: Buy out the mass media, so that no one thinks there is anything wrong about what you are doing any more. The clueless voter who lives from the juices of the media mogul is the tier 5 criminal's best friend.
IMO, most of the global financial system is somewhere between tier 4 and 5, with a bit of 3 (recruiting away the SEC regulators to big iBanks). Thankfully we still have a relatively free press in the US, so even if there is some lockdown there is a lot of ability to get alternative information.
We have a weird situation in the US right now in that lots of information is available via the alternative press, etc., but none of it seems to matter during election time, in which the major parties and major media vehicles seem to be the only important aspects in pushing past the 50% mark, which is the defining feature of our democracy.
Thankfully we have the ability to operate presses fairly freely, but these little presses don't seem to matter all that much when it comes to fending off the thieves. I'm not quite sure what the solution is, but I suspect it involves a large number of people working together to build a system that is better than the current one.
I saw this story on Reddit yesterday. Really disappointed to see it here today, and even more disappointed to see such a cynical, shallow comment at the top of the page here, just as on Reddit.
That's a pretty loaded statement. Your implication is that the credit default swap industry is rife with fraud but it'd be helpful to be more specific about what that fraud is, who committed it, and why they're not receiving an appropriate punishment.
My favorite of all-times bad-guy is Mr. Kenneth Lay, founder of Enron, supposedly RIP. Supposedly because the story of his death is crazier than most A. Christie's books.
So there's literally not a shred of evidence of anything being weird about his death except for the fact that it was good timing?
Maybe, just maybe, watching your life crumble and dealing with the guilt and shame of a conviction was a huge source of stress and caused a heart attack?
Nah, you're right, he's probably drinking Mojitos on a beach in South America and chuckling over all the suckers he fooled.
That is because prison is not the punishment for most of those offenses. Before you say shit about the U.S. judicial system, you should learn something about it.
SEC and FTC violations are civil offenses. The punishment for civil offenses are fines. Plenty of firms and higher-ups have paid fines.
Jail time only applies in cases where deliberate fraud is proven to have occurred. We all know that the finance guys were too reckless in their pursuit of profits. But recklessness is not a crime (and indeed, the only crime in the U.S. system for which "recklessness" is relevant is manslaughter/murder).
I like (as in don't like) how that's the excuse for every counter example. Just like how Martha Stewart only went to jail because she didn't play golf with the right people.
Agreed. Great wealth and connections didn't seem to help Raj Rajaratnam of Galleon (a billionaire) avoid prison for insider trading. Or Rajat Gupta. Or the ~60 other wealthy hedge fund managers and their associates who have been convicted in the investigation. (Or, for that matter, Michael Milken.)
In 1980s hundreds of banksters went to jail in loans&savings scandal. US went to the dogs:
1. Militarily: terrorism as tactics is just effective (especially cost-effective). US looks like it is trying to kill a fly using a machine gun. Good luck!
2. Politically: corrupt to the core. As weak as never before.
3. Economically: capitalism is really not about being in debt. It is about capital accumulation via savings. Currently, the US is the biggest debtor in the History of the World. 600% gdp - that's our total debt.
The article says he paid 67.5 million in fines to settle a securities fraud lawsuit brought by the SEC. It was a civil lawsuit, so the penalty if he lost (instead of settled) would have been a fine.
The criminal case was dropped because a grand jury would not indict after 2 years debating the issue.
The settlement has nothing to do with the criminal case.
And in the other case of the "low-level countrywide loan officer".. the level of fraud detailed in your link goes far and beyond the fraud occurring in the mortgage industry at the time. He had countrywide issue 38million in fraudulent loans, of which 8.7million went into his own bank account.
>We all know that the finance guys were too reckless in their pursuit of profits. But recklessness is not a crime (and indeed, the only crime in the U.S. system for which "recklessness" is relevant is manslaughter/murder).
Perhaps this is a facet of law that people should lobby to get changed. The kind of wanton disregard shown by the finanical sector during the recent meltdown damn well should be a crime, if it isn't already.
Does it also mean people who bought houses way out of their price range in hopes of selling them to the next fool and took out huge home equity loans and blew it on vacations and luxuries and then defaulted on their loans and by this contributed to the following economic crash - should they go to jail too? They were reckless without doubt.
I also submit it was reckless to provide mass government guarantee for subprime loans - after all, they are subprime for a reason, due to very high default risk, and when this risk materialized - and it had to materialize sometime unless whoever evaluated these loans as subprime was wildly mistaken - taxpayers were on the hook for these loans. Should people who supported FNM and FMA operations go to jail for that?
I'm afraid we'd end up jailing a real lot of people, including a lot of politicians, if we go this road. And if it would produce any negative consequences, we'd also have to jail whoever proposed such laws - as it would be deemed reckless to propose it...
If recklessness while driving is a crime by it's self.
There are plenty of other examples, but many of these people went well past recklessness into fraud. EX1: If you setup a deal, know it's terrible and bet your own money that it will fail while advising your clients to do the deal with their money then your committing fraud. EX2: If your training documents tell people to commit fraud then your directly culpable.
In my opinion rechlessness is necessary to bring society forward. This behavior induces change to the system and breaks the status quo. Sure, this has often bad consequences, but daring to break the status quo should be generally rewarded, and only regulated in cases where the negative impact on society gets too extreme/long term.
Do whatever the hell you want with your own money (set fire to it, if you feel like it), but if you're trusted with other people's money, you shouldn't be "reckless". It's not a video game that you can return to last "saved" point before your ridiculous adventures if they prove to be wrong.
It does not, but in order to foreclose you state, under risk of perjury, that the details are right.
I've been following foreclosure stories for a while. The DAs are willfully asleep - hundreds of thousands of perjuries have been committed and documented, tens of thousands have been confirmed by the perjuring entity (as in this case), but the legal system is not interested in pursuing justice. Read Deninger's "The Market Ticker" or ZeroHedge for (almost daily) specific details.
Usually a perjury charge requires that you know the truth and tell a lie, knowingly and willingly. I'm not sure where negligence comes into it, but I think you'd have to prove WF knew their filings were wrong, as opposed to just careless. Also, it's rare to prosecute for perjury when the defendant volunteers the new version, as that would discourage past liars from ever coming forward with the truth.
In other news, I amended my tax return a few years ago. I do not generally refer to that event as the time I committed perjury.
> Usually a perjury charge requires that you know the truth and tell a lie, knowingly and willingly. I'm not sure where negligence comes into it, but I think you'd have to prove WF knew their filings were wrong, as opposed to just careless
Foreclosures are different, and for a good reason. One of the statements you make (similarly to DMCA takedowns) is something along the lines of "I have done my due diligence, and I assert under risk of perjury that the info contained below is correct."
If your bad foreclosure (or DMCA takedown) is taken to court, you should be able to prove that a mistake happened in spite of your due diligence.
Unlike amended taxes, or patent infringement, the results of an unjustified foreclosure might be fatal and essentially irrecoverable for the foreclosed party.
> Also, it's rare to prosecute for perjury when the defendant volunteers the new version, as that would discourage past liars from ever coming forward with the truth.
No truth was volunteered willingly here. They are challenged in court every day, and often shown to be fraudulent! After a lot of these, they went back to revise.
It is rare to prosecute when someone corrects themselves with a good excuse.
It is not rare to prosecute when someone admits perjury with no good explanation (and really, you should look into it, e.g. on Deninger's market ticker - the only explanation here is greed, which is not good enough). Unless you are a big bank.
> In other news, I amended my tax return a few years ago. I do not generally refer to that event as the time I committed perjury.
Perjury requires, as you stated, making a knowingly wrong statement. (Will does not enter the equation, only knowledge). If you knowingly filed a fraudulent tax return - then, yes, you have possibly committed perjury - but unless you are already on the IRS' sight, not much is likely to happen.
Of course there's a reason. Regulation is deeply captured http://en.wikipedia.org/wiki/Regulatory_capture (reading this article and all the examples in it, some of them very recent, will be an eye opener if you are not familiar with them. Or cause you to put an SEP field over the whole thing because it looks too crazy to be true)
People are not generally angry at "the rich," but rather the fat leaches on the govt and financial sectors. I've not heard anyone complaining about the self-made man.
Ok. I'm Canadian, so all US law blurs together to me (especially since in Canada, criminal law is under the sole jurisdiction of the federal government).
Quoting from a recent post[1] on a law professor blog regarding the relationship between the states and the federal government on criminal matters:
"...[T]he states and the federal government are not exactly co-equals in the criminal law sphere. The states have general police powers while the federal government has limited powers; the states inherited the common law while the federal government must enact statutory offenses."
Well, in Canada all criminal prosecutions happen at the provincial level -- the Federal government defines the criminal law, but the Provincial governments are responsible for the "administration of justice".
Which can make things interesting when the governments don't agree on whether something should be illegal or not...
There is US Federal criminal law, and then there are the criminal laws of each of the 50 US States. Federal crimes are usually more serious (like espionage), but sometimes are just a matter of federal courts being the most appropriate venue (like copyright).
There are some standards that are widely applied across the states (like the MPC, some model jury instructions), and obviously the legal issues are very similar, but there are definitely major important differences between the states; for instance, groping a 17 year old in Alabama might be an aggravated sexual battery crime, but doing the same thing in Oregon might be a basic sexual assault.
In the United States, a US Attorney with the political will and backing could convict virtually any citizen.
One broad statute is honest services fraud. Basically, if you have a fiduciary duty to someone and commit an act that could reasonably be expected cause economic harm, you've committed a felony.
There are many other laws that could be used to lock up many bankers, assuming the will existed to do so.
In China, financial fraud is punishable by death. It is at once crude and effective. The subprime bubble may never have ever occurred if the perpetrators knew they would literally be risking their lives.
In that case why can jaywalkers be charged with the crime of reckless endangerment in the US without anyone killed, or hurt?
Reckless endangerment in Nevada occurs when someone allegedly "neglects any duty imposed by law in willful or wanton disregard of the safety of persons or property." So if a police officer believes that you were deliberately jaywalking in a careless way that could hurt someone else, you may face reckless endangerment charges.
If no death or substantial bodily harm results from an alleged act of reckless endangerment in Nevada, the charge will be a gross misdemeanor carrying up to $2,000 in fines and/or up to one year in jail.
