Elizabeth Warren: Why are Banksters Too Big For Trial?

from EconoMonitor

Author: L. Randall Wray  ·  February 16th, 2013  ·  Comments (0)Share This Print  66  5

Here’s a great clip on Warren grilling “regulators” on seeking settlements rather than prosecuting banksters for crimes: http://www.upworthy.com/elizabeth-warren-asks-the-most-obvious-question-ever-and-stumps-a-bunch-of-bank?g=2.

Note the way Tom Curry (his nameplate says “Honorable” but one might read some irony there)–the Comptroller of the Currency–squirm as he fields Senator Warren’s question: how many Wall Street banks have you brought to trial for crimes? Well, uh, we “have not had to bring any to trial”. And why not? Well, uh, we get settlements in which they agree to desist from further criminal activity.

So exactly how many Wall Street banks have been brought to trial. Well. Uhhm. Zero. Zip. Nada. Never happened.

Trials for criminal conspiracies? Nope. Funding terrorists? No, we look the other way. Laundering drug money? Never prosecuted. Rigging LIBOR? What, is that a crime?

Elisse Walter, head of the SEC, helpfully adds that they are able to impose only limited penalties, but they’d like to raise the settlements.. What they do is to calculate how much they think they might get in penalties if they go to trial versus how much they can get by gently stroking the criminal banksters and asking them to cough up a few bucks. And stroking always wins. Trials always lose.

Warren is very good. But here’s the important point. Uncle Sam does not need bankster money. How much money Uncle Sam might get out of a settlement should never even be a consideration. The banksters who run the Wall Street banks never pay these fines. At worst, they use a couple of weeks of ill-gotten gains to pay the settlements. If anyone suffers, it is the shareholders.

Chicago mobsters never had it that good. They actually faced real prison time–or worse, being gunned down in comprised situations with their pants down.

Here’s the deal. Uncle Sam should never settle with banksters. There is no penalty that matters except jail time. Nothing else will ever change behavior on Wall Street. And in spite of what Warren implied in her preamble to the grilling, Uncle Sam cannot run out of money. He can afford any prosecution, no matter how lengthy, no matter how expensive.

If anyone in Washington cares about criminal activities on Wall Street (and I believe that Elizabeth Warren does), she/he should push for investigation, prosecution, and conviction for the crimes perpetrated by Wall Street regardless of cost. Zero tolerance for crimes. Zero willingness to negotiate. Nothing less than prison time.