Selective enforcement creates a "criminogenic environment"
Just so no one thinks selective enforcement is something of the past, The New York Times recently published a large, well-researched article called "In Financial Crisis, No Prosecutions of Top Figures." [2] It details at least nine instances of the selective avoidance of prosecution or accountability at the very top of the nation's financial and banking industry.
The lack of prosecutions is "consistent with what many people were worried about during the crisis, that different rules would be applied to different players. It goes to the whole perception that Wall Street was taken care of, and Main Street was not," says David A. Skeel, a law professor from the University of Pennsylvania.
In instance after instance, the Justice Department and the FBI cut back staff to investigate fraudulent activity at the top -- as entities like The Security and Exchange Commission encouraged going easy on the banks.
William K. Black, a professor of law at the University of Missouri and a federal prosecutor in the 1980s savings and loan scandal put it this way about federal oversight in the current scandal:
"(T)heir policies have created an exceptional criminogenic environment. There were no criminal referrals from the regulators. No fraud working groups. No national task force. There has been no effective punishment of the elites here."
Henry N. Pontell, a criminology professor at the University of California, says it's a matter of regulators not understanding -- or, like the fox guarding the chicken coop, willfully not seeing -- what's going on in the area they are supposed to be regulating.
"If they don't understand what we call collective embezzlement, where people are literally looting their own firms, then it's impossible to bring cases."
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