What do you think are the real reasons that no Wall Street executives have been prosecuted for fraud as a result of the 2008 financial crisis? originally appeared on Quora - the knowledge sharing network where compelling questions are answered by people with unique insights.
This gags me. I recently put out a report called "Rigged Justice" - highlighting 20 of the worst federal enforcement failures of 2015. In a single year, in case after case, across many sectors of the economy, federal agencies caught giant companies breaking the law -- defrauding taxpayers, covering up deadly safety problems, even triggering the financial collapse in 2008 -- and let them off the hook with barely a slap on the wrist. These companies paid meager fines, which some then handed over to their tax lawyers to see if they could get a tax deduction!
I think about it this way: After the financial crisis, where were the full-scale public investigations? Where were the armies of auditors, seizing hard drives and poring over the financial statements? Where were the teams of regulators who were supposed to be checking the books all along? Where were the task forces -- the combined efforts of federal and state officials -- who cross-examined low-level dealers and got them to tell what the big guys were up to? Where were the signs -- any signs at all -- that real resources were devoted to thorough investigations and that somebody with real power was taking this responsibility seriously?
Weak enforcement comes from the top. It starts with the people who run our government agencies. For example, strong leadership at the Consumer Financial Protection Bureau and Department of Labor has meant strong initiatives to protect consumers and workers. But the SEC, with weak leadership, has done as little as possible to hold anyone accountable for the crash, while the Department of Justice has dodged one opportunity after another to impose meaningful responsibility on big corporations and their executives.
Congress can write all the laws we want, but it matters who gets appointed to carry out those laws. It matters that we have strong, independent leaders calling the shots. It matters that we have people with enough spine to stand up to powerful companies. It matters that we have government officials who know that they work for the American people, not the corporations they regulate.