Gretchen Morgenson, the assistant financial editor and columnist for the "New York Times", (and someone who doesn't suffer fools), has written extensively [i] on the skullduggery of the financial industries "banksters".
In yesterday's Times' article [ii] she focused on the practice by SEC prosecutors of "letting companies and individuals settle suits against them without admitting or denying its findings". As she says, "This lets bad actors pretend that they've done nothing wrong. These no-admission settlements can be little more than a wrist slap and certainly do not qualify as punishment".
Morgenson deserves a big "Here, here" for highlighting this abhorrent practice of prosecutors letting these rascals off the hook with just a fine and without having them admit any wrongdoing. No admission of guilt and the fraudulent behavior is all but guaranteed to continue.
The context of Morgenson's piece related to President Obama nominating Mary Jo White last week to head the Securities and Exchange Commission. White was the former United States Attorney for the Southern District of New York. In that capacity she hired one Preet Bharara as an assistant prosecutor in 2000. He later replaced her as prosecutor for New York's Southern District.
And it has been Bharara's office that has done the most to bring the banksters to heel.
Significantly, it has been Bharara as prosecutor, who "made it a priority to require admissions from defendants in civil fraud cases". Interviewed last week, Bharara said, "When we're talking about vindicating interests relating to fraud, companies and individuals whenever possible should have to admit that they engaged in bad conduct for all the world to see. In addition to seeking accountability and punishment and remuneration, we also have the responsibility to speak the truth, to get at what really happened." Since 2010, "his office has extracted admissions from defendants in 23 civil cases' notably Deutsche Bank's mortgage unit, Mortgage IT where "Prosecutors accused the bank of reckless lending practices spanning a decade" and defendants "admitted, acknowledged and accepted responsibility for the misconduct uncovered by prosecutors." Mr. Bharara concluded, "It is important to make a record with respect to institutions who may become repeat offenders. If they don't admit or deny the conduct, the next time some regulator or prosecutor's office looks into them, they can say that nothing happened. We think transgressions of a serious nature should be held against them in the future" to which Morgenson wrote, "Hear that, Ms. White?"
Morgenson wrote, "President Obama appeared to send a message that Washington was finally going to get tough with financial wrongdoers. Tough enforcement has been pretty much AWOL on his watch. Maybe Ms. White can change that with a new, aggressive approach."
The trouble is White is the nominee to head the SEC and not Bharara. Just because White had an earlier "association" with Bharara doesn't mean she ascribes to his aggressive methods. The tough prosecution of the banksters in the Southern District of New York appeared to happen AFTER White was replaced by Bharara.
So Morgenson writing "Obama appeared to send a message"" with Whites nomination is more a "hope and a prayer'.
If Obama meant to take on the banksters it would have happened in 2009 and the likes of Preet Bharara would have been heading the investigations, criminal as well as civil.
It didn't happen then, it's highly unlikely now.
Here's hoping I'm wrong.
[i] Morgenson co-wrote with Joshua Rosner "RECKLESS ENDANGERMENT, HOW OUTSIZED AMBITION, GREED, AND CORRUPTION CREATED THE WORST FINANCIAL CRISIS OF OUR TIME", Henry Holt and Co., Times Books, May,2011.
[ii] "Making Them Pay (And Confess)", by Gretchen Morgenson, "The New York Times", January 27, 2013.