Similar totally irresponsible actions are behind the troubles at many Wall Street firms and banks. Executives and traders engaging in business deals that resulted in short term profits for the firm, and very high bonuses for themselves, but ended up costing the firms stockholders truly massive amounts of money and the taxpayers even more money in the form of bailouts to cover the criminal behavior. I use the word "criminal" here because that is what was happening and not just in a broad layman's use of the word. Fraud is generally defined in law as an intentional misrepresentation of a material existing fact, made by one person to another, with knowledge of its falsity and for the purpose of inducing the other person to act, and upon which the other person relies with resulting injury or damage (which can include loss of money). Fraud may also be made by an purposeful failure to state material facts or by an omission, which nondisclosure makes other statements misleading.
The corporate officers and those employees involved engaged in fraud against the corporate stockholders; they also engaged in fraud against the policy holders. They should be tried for criminal fraud at the Federal level and/or at the state level. This can be undertaken by the US Department of Justice or by State Attorney Generals or local county prosecutors in jurisdictions where either stockholders and/or policy holders reside or do business in.
Similar cases of fraud exists throughout the many investment banks and institutions currently receiving billions in federal bailout money. We have not yet seen criminal prosecutions of these matters but the public is totally outraged and the crimes are massive in scope. It is high time that federal and state/local prosecutors begin a parade of corporate officers and senior employees before grand juries for criminal indictments and the resulting criminal trials.
Not only billions but trillions of dollars have been lost to these multiple frauds and it is time that the criminals responsible face the law. Our very system of government demands that the guilty parties be brought to justice.