Laugh or you’ll cry
by digby
I’ve heard of regulatory capture, but this takes the concept to a whole new level:
As Wall St. Polices Itself, Prosecutors Use Softer Approach
By GRETCHEN MORGENSON and LOUISE STORYAs the financial storm brewed in the summer of 2008 and institutions feared for their survival, a bit of good news bubbled through large banks and the law firms that defend them.
Federal prosecutors officially adopted new guidelines about charging corporations with crimes — a softer approach that, longtime white-collar lawyers and former federal prosecutors say, helps explain the dearth of criminal cases despite a raft of inquiries into the financial crisis.
Though little noticed outside legal circles, the guidelines were welcomed by firms representing banks. The Justice Department’s directive, involving a process known as deferred prosecutions, signaled “an important step away from the more aggressive prosecutorial practices seen in some cases under their predecessors,” Sullivan & Cromwell, a prominent Wall Street law firm, told clients in a memo that September.
The guidelines left open a possibility other than guilty or not guilty, giving leniency often if companies investigated and reported their own wrongdoing. In return, the government could enter into agreements to delay or cancel the prosecution if the companies promised to change their behavior.
And from the department of the obvious:
“If you do not punish crimes, there’s really no reason they won’t happen again,” said Mary Ramirez, a professor at Washburn University School of Law and a former assistant United States attorney. “I worry and so do a lot of economists that we have created no disincentives for committing fraud or white-collar crime, in particular in the financial space.”
And lest you think this policy is just a holdover from the Bush administration that hasn’t been corrected yet, think again.This is a current policy which the government explains that they are doing to “save the jobs” of the employees who are innocent. So you see, it’s really just another aspect of the financial sector’s commitment to “doing God’s work.” If a few excessively wealthy financial criminals go free and even profit from their crimes, it’s really for the greater good.
Read on. You won’t believe the details.
And then go back and Google all the times the politicians and Villagers have droned on about “moral hazard” when anyone suggested that perhaps the government might do a little something to ameliorate the housing crisis.
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