Public Comment

Wall Street Recidivism

Jagjit Singh
Friday October 31, 2014 - 10:04:00 AM

Buoyed by the certainty that that the Justice Department would never hold the titans of Wall Street accountable for their financial shenanigans, they are back engaging in the same dirty business. Just two years after conducting massive fraud, some of the world’s biggest banks are now suspected of a repeat performance. Several large banks and their hired guns - high powered consulting firms - are again in the cross hairs of federal prosecutors. 

Several large foreign banks have been cited for doing business with Iran in violation of US law which was enacted out of deference to Israel which is itself in complete violation of international law. Makes sense? 

Historically, when banks have repeatedly run afoul of the law, they have paid a small fine, pocketed huge bonuses and returned to business as usual in sharp contrast to the average ‘small’ petty criminal. The fines are tax deductible and regarded as the cost of doing business. 

Prosecutors have traditionally favored so-called deferred-prosecution agreements, which suspend criminal charges in exchange for the bank’s paying a fine and promising to curtail their criminal behavior. This has enabled a disturbing pattern of Wall Street recidivism. It is ironic that when assessing the magnitude of the criminal behavior, the government outsources the task to consultants who are often the bank’s own customers. In short, the system is rotten to the core.