Why aren’t these con men in jail?
By Tom Sullivan
“The lack of prosecutions, quite frankly, does not indicate a lack of evidence,” Richard Bowen told Bloomberg’s “Market Makers” last week. The former Citigroup Chief Underwriter for Consumer Lending has testified before the Financial Crisis Inquiry Commission but contends that evidence he provided never made it to the Department of Justice for further investigation and prosecution.
A lengthy article on Bowen in New Economic Perspectives outlines some of what the whistle blower might have provided. Furthermore, that the FCIC, DOJ, and the SEC might not (or might not want to) understand how the accounting control fraud “recipe” at the heart of the financial crisis actually worked. Once you explain how the “sure thing” at the heart of the recipe works, writes William Black, “jurors understand quickly that the officers were acting in a manner that makes no sense for honest bankers but is optimal for officers leading frauds.”
Matt Taibbi (citing Yves Smith at Naked Capitalism) looks at corruption in the Private Equity business, and the seeming indifference of Andrew Bowden, the SEC’s Director of Compliance Inspections and Examinations. A study “found that over half of the companies they looked at were guilty of ripping off their clients” using hidden fees. Bowden mentioned the discovery in a speech within the last year. Since then … crickets:
By this month, Bowden had achieved a complete 180, telling a conference of PE professionals that their business was just “the greatest.”
This is Bowden on March 5th, on a panel for PE and Venture Capital issues at Stanford. Check out how he pooh-poohs the fact that his SEC has seen “some misconduct,” before he goes on to grovel before his audience:
Is a slightly less worshipful attitude too much to ask from people charged with oversight? Taibbi asks.
Apparently, yes.
(h/t MS)