
Why Aren’t Any Bankers in Prison for Causing the Financial Crisis? (2016) - sidcool
https://www.theatlantic.com/business/archive/2016/08/why-arent-any-bankers-in-prison-for-causing-the-financial-crisis/496232/?single_page=true
======
paulus_magnus2
Causing financial crisis wasn't illegal. Unethical but not a crime. Except for
some cases of misselling products, banks playing against the customer etc.
Bailout was.

For $3 trillion less than bailout, we could have paid off every U.S. mortgage!
[http://www.jameslavin.com/articles/2009/04/16/for-3-trillion...](http://www.jameslavin.com/articles/2009/04/16/for-3-trillion-
less-than-bailout-we-could-have-paid-off-every-u-s-mortgage/) [need better
source??]

Without bank bailout we'd buy banks for pennies. Market forces would work and
banking sector would be incentivised to behave properly.

~~~
marricks
Saying "there's no legal way to go after them!" I find kind of upsetting when
bankers can hire great lobbyists to ensure they set up the law favorably for
themselves.

Definitely agree we should have paid off mortgages instead though.

~~~
rayiner
Do you have an example of a law you think should’ve been used to put people in
prison that we didn’t pass because of lobbying?

What the bankers are accused of doing is classic civil fraud: lying about the
quality of assets they sold to investors. These sorts of transactions between
sophisticated parties has always been the subject of civil rather than
criminal enforcement. (Criminal fraud tends to come into play only where the
misrepresentations are more clear cut and egregious, and the victims are
ordinary consumers rather than sophisticated counterparties.)

~~~
marricks
I meant more the idea that we have a financial system that allowed this to
happen. Since the repeal of the Glass–Steagall act there's been greater and
greater instability and more opportunities for banks to reap large sums of
money. Eating away at these protections allows for more exploitation
basically.

In terms of protections from prison, basically controlling the firms that are
meant to police them seems sufficient. No real accountability from the
financial crisis seems to show that...

~~~
chiaro
None of the troubled firms were horizontally integrated in the way the gs
would have prevented.

------
leoc
For the other side of this argument, see Bill Black.

[http://neweconomicperspectives.org/category/william-k-
black](http://neweconomicperspectives.org/category/william-k-black)
[https://www.cato-unbound.org/contributors/william-k-black](https://www.cato-
unbound.org/contributors/william-k-black)
[https://twitter.com/williamkblack](https://twitter.com/williamkblack)
[https://en.wikipedia.org/wiki/William_K._Black](https://en.wikipedia.org/wiki/William_K._Black)

He was one of the group which brought successful prosecutions during the
Savings & Loan crisis in the '80s, and he has very little sympathy for the
failure to bring similar prosecutions in response to the GFC.

[https://www.youtube.com/watch?time_continue=221&v=J8CqaHTygS...](https://www.youtube.com/watch?time_continue=221&v=J8CqaHTygSc)

------
rwallace
This suggestion keeps popping up as though 'do nothing' and 'destroy some
randomly selected lives, at additional cost to society, by way of revenge'
were an exhaustive list of options. I think a much more constructive response
would be to claw back all the bonuses the bankers were awarded in the years
leading up to the crash. If the losses must be socialized, the gains should
not stay privatized.

~~~
yequalsx
Overall I agree with your sentiment about the options not being either of two
extremes. In the case of bankers and financiers who seemingly engaged in fraud
on a grand scale it’s about the idea that justice should in some sense be
blind with regard to the amount of money you have. There are lots of cases
where people steal things on the order of a $1000 going to jail for lengthy
periods of time.

The anger about the lack of prosecutions for bankers, at least in part, is the
frustration that comes from realizing things aren’t right in the U.S. The
justice system works very differently for the 1% than for everyone else. I
think with growing inequality comes growing anger and resentment.

~~~
mikeash
Last year I got kicked off a jury for (they don’t say why, but I’m pretty
sure) saying I couldn’t possibly consider a 20-year sentence for the crime of
receiving stolen property worth $500 or more.

~~~
somecontext
In case anyone is curious, Virginia Code 18.2-108 states that "If any person
buys or receives from another person, or aids in concealing, any stolen goods
or other thing, knowing the same to have been stolen, he shall be deemed
guilty of larceny thereof" and the following section states "Any person who
commits larceny of property with a value of $200 or more with the intent to
sell or distribute such property is guilty of a felony punishable by
confinement in a state correctional facility for not less than two years nor
more than 20 years".
[https://law.lis.virginia.gov/vacode/title18.2/chapter5/secti...](https://law.lis.virginia.gov/vacode/title18.2/chapter5/section18.2-108/)

~~~
mikeash
Whoops, it was indeed $200. Thanks for the source!

~~~
somecontext
FYI, my comment wasn't intended as a correction. The limit of $200 is even
more extreme than your stated $500, and the law even includes a _minimum_
sentence of two years.

~~~
mikeash
Regardless, it was a welcome correction. Especially since, as you note, it
just makes the point stronger.

I don’t recall the two year minimum. I wonder if it’s changed or my memory is
just faulty (again).

------
chroem-
This article falls back on the "I was just following orders" excuse. It
doesn't matter if there was no intent of fraud: the issue at hand is that
there is currently no downside risk for engaging in these profitable but
destructive behaviors, so banks will continue to risk harming the economy as
long as they are making money this way. Other professions where screw-ups tend
to have disasterous effects, like medicine, law, and engineering, have legal
liability frameworks in place to hold businesses and individuals responsible
for the negative impact of their actions. I don't see why our financial system
should be any different.

------
CalChris
The reason why there aren't any bankers in prison is Enron.

Enron and Arthur Andersen were aggressively prosecuted. Many top execs went to
prison, Fastow and Skilling. Lay would have gone but 'died' before sentencing.
But Arthur Andersen also lost 85,000 jobs. Enron lost 4000+. Employees
pensions were wiped out.

Politicians and prosecutors do not have the stomach for that. Citizens don't
have the backbone to elect politicians who have that stomach. (US Attorneys
are appointed by an elected politician and confirmed by elected politicians.)

This is really just one more wrinkle on too big to fail. That and regulatory
capture. And also Citizens United. And a few other things.

~~~
jacobolus
Why the scare quotes around 'died'?

~~~
CalChris
Because by 'dying', Lay's conviction was vacated. Of course, that meant he
didn't go to jail but it also meant that he didn't pay any fines, leaving his
rather large estate secure as an inheritance. W even went to his funeral.

~~~
jessaustin
Do you imply that Lay was _not_ present at the funeral? I think that could be
a pretty good idea for a movie...

------
rayiner
Judge Jed Rakoff has an interesting article on the same subject, which brings
to bear his experience as the former chief of the securities fraud division of
the southern district of new york’s US Attorney’s Office:
[http://www.nybooks.com/articles/2014/01/09/financial-
crisis-...](http://www.nybooks.com/articles/2014/01/09/financial-crisis-why-
no-executive-prosecutions).

------
maxxxxx
I don't know if anything they did was even illegal in the sense that there was
a crime involved. I think the big mistake was to bail them out. The should
have lost all their money and their companies should have been allowed to go
bankrupt.

I also would question the existence of large corporations where the owners get
all the upside but can avoid the downside.

~~~
pocm_2
If they had lost all their money and their companies went bankrupt, the
american people would've lost all their savings as well. As much as it sucks
to have the banks bailed out, it may have been the only way to relief the
people and not cause a depression.

~~~
maxxxxx
The government could have bought the banks for cheap, stabilized them and
resold them on the market. That way shareholders and employees would have lost
but not bank customers.

------
save_ferris
Preet Bharara, former US attorney for the Southern District of NY, discussed
this on his podcast recently.

He basically pointed out that there wasn't evidence to support the notion that
individuals had the intention of committing a crime, which is what prosecutors
need. It's aggravating because I see similarities in other ways that the law
falls short (Equifax, Sony, etc.)

Acting stupidly or neglectfully in these scenarios just doesn't seem to have
consequences beyond the damage of data exposure, market collapse, etc. as long
as you can argue that you weren't aware that you were doing anything wrong.

So how do we properly deal with people that don't willingly commit crime but
are so bad at what they do that the damage can be catastrophic?

~~~
graedus
IANAL

My understanding is that proof of intent to break the law is not the legal
standard needed to move forward with prosecution[0]. It's being used as cover
for insufficient political will to prosecute a powerful protected class - Wall
Street executives.

[https://www.leagle.com/decision/199634380f3d2631296](https://www.leagle.com/decision/199634380f3d2631296)
§ II A

~~~
tomalpha
IANAL too, but believe that in common law systems like the U.K. and most of
the U.S. that intent is required. In the jargon: Mens Rea is required in
addition to Actus Rea.
[https://en.m.wikipedia.org/wiki/Mens_rea](https://en.m.wikipedia.org/wiki/Mens_rea)

That isn’t always true for certain laws that create “strict liability” which
removes the requirement to prove intent:
[https://en.m.wikipedia.org/wiki/Strict_liability](https://en.m.wikipedia.org/wiki/Strict_liability)

------
exabrial
Unless they did something illegal, or took taxpayer money illegally, why would
they be? We choose to use their services. If you don't like it, start paying
cash (or Bitcoin).

~~~
exabrial
Apologies to the HN readers who felt the need to downvote me for implying due
process is necessary for a civilized society.

~~~
mfringel
I'm not aware of any reason being relayed to the person being downvoted. What
leads you to believe that that was the reason you were downvoted?

------
patientplatypus
So...for those of you saying "benefitting from a financial collapse is not
illegal" I present to you Magnetar Capital.

Yes, folks that's right, some asshole named their hedge fund after the
magnetic field caused by a collapsing star. If someone were to name their
company Human Piles of Shit Inc. it could not be any more obvious that this
company was founded in order to cause harm.

What they did was to buy up CDOs and then short the positions during the
height of the bubble. So if, when the bubble was waning, a $90 million CDO
needed an extra $10 million to come to offer on the market they would take
that position. Then they would turn around and short the position to 20x.
Classic pump and dump with the original long position _clearly_ made in bad
faith.

And if you think I'm kidding:

The hedge fund Magnetar helped create billions of dollars’ worth of risky
deals called collateralized debt obligations, many of which failed
spectacularly in the financial crisis. Magnetar, meanwhile, had taken
positions that allowed the firm to profit when many of those same CDOs
collapsed.

[https://www.huffingtonpost.com/2012/05/17/magnetar-
roundup-h...](https://www.huffingtonpost.com/2012/05/17/magnetar-roundup-
hedge-fund-sec_n_1525718.html)

More here:
[https://en.wikipedia.org/wiki/Magnetar_Capital](https://en.wikipedia.org/wiki/Magnetar_Capital)

The founders Alec Litowitz and Ross Laser still run the fund and are worth
millions and millions of dollars. How many lives did these people ruin? They
literally _killed_ people from suicide, depression, economic ruination. If
there is a hell I hope they burn in it.

EDIT: And yes, offering a contract in bad faith is illegal.

------
lend000
The 'bankers' most responsible are Greenspan and Bernanke. Everyone loves a
witch hunt, but blaming the financial crisis on private bankers for legally
following misaligned incentives created by the government is ridiculous (and
the norm, unfortunately).

~~~
mempko
You do realize that most banking regulations and misaligned incentives are
written and lobbied for by those same private bankers?

~~~
averagewall
It's still politicians that pass laws. Politicians are voted for by American
people. Those people just can't help themselves voting for the most well
funded candidates. They're blind to the fact that their so called free will
choice is determined by lobbyist's payments and refuse to vote for underfunded
candidates.

------
lefstathiou
I don’t want to live in a world where an engineer and QA team could get jail
time for signing off on a feature release like Apple Maps which wipes out
$30bn in equity value on release day because it is loaded with bugs. Almost
every time we miss a deadline or every time bugs go into production, losses
are incurred somewhere by someone.

These were human beings like us that were doing the job they were mandated to
do to the best of their ability. Many lost their livelihoods in the process.
It created trillions of dollars in wealth (and losses) and anyone who has
looked at their 401k lately can see that they are at it again.

~~~
mplewis
The banking crisis is a very different situation from a bad product launch.
The banking executives knew exactly how bad things could be if the subprime
markets failed.

------
jeffdavis
Because the rule of law means we have to make clear rules beforehand, and it's
hard to make rules about some kinds of bad behavior.

------
thisisit
This a great quote:

 _But convicting bankers—or any other white-collar workers whose decisions at
work have ostensibly damaged the economy—is difficult because while it is easy
to identify systematic wrongdoing, it 's much harder to pin blame, at least in
the way a court might approve of, on an individual within that system._

So you can find a bigger issue with collective behavior but it becomes
difficult if everyone is doing it.

------
curtis
Generally speaking bad business decisions and losing money are not against the
law. Do you think they should sometimes be against the law for businesses that
receive substantial government guarantees (say to the tune of hundreds of
billions of dollars or more)? Sure, that's probably a good idea. But did those
laws exist before the Financial Crisis? Not really, as far as I can tell. So
what are you going to throw the bankers in jail for? You can't pass new laws
and apply them retroactively in the U.S. since the Constitution doesn't allow
ex post facto laws.

There is a discussion we could be having about new laws that will apply to
financial institutions in the future, to prevent, or at least reduce, the
consequences of financial institutions behaving recklessly. But for some
reason we're not having that conversation.

------
jrochkind1
> I think we have an ambivalent relationship with the large corporation and
> with capitalism. It's a relationship that involves need and dependency and
> some level of celebration but also resentment, anger, and victimization.

Sounds like an abusive relationship to me.

------
pjmorris
It would have been easy to root out the rot; let the bad banks fail, and let
the good banks stay afloat. “Lend without limit, to solvent firms, against
good collateral, at 'high rates' \- Bagehot's rule. Geithner and company
argued that doing so would destroy the system. If it turned out that all the
banks were bad, maybe it would serve the citizens best to have a new system.

~~~
qaq
no bank would stay afloat

~~~
pjmorris
A bank's _purpose_ is to manage credit risk. If a bank's management can't make
money on the spread between the Fed lending rate and the mortgage lending
rate, they should get out of the business. I don't know whether the top
echelon of circa-2007 bank management should be in prison or not, but I do
know they ought to be working as baristas or something rather than continuing
to run businesses they aren't competent to manage.

~~~
qaq
Finance sector is 40% of US GDP so while it's cool to throw around theoretical
"solutions" they would need to account for this simple fact. So let them fail
was not a realistic solution.

~~~
pjmorris
Free-market fundamentalism, as I have advocated for above, may be too much to
ask of capitalism. I do think it's fair to ask whether US citizens, who have
been asked to spend Trillions on the 'free market's' behalf (see the Fed's
balance sheet pre- and post-crisis [0]), were best served by the way in which
it was done. Keeping housing prices high and the existing management in place
was not the only way to use those new funds.

[0]
[https://www.federalreserve.gov/monetarypolicy/bst_recenttren...](https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm)

------
ataturk
The financial crisis has many facets. I was deeply interested in the subject
at the and in the ensuing years afterwards. I highly recommend Michael Lewis'
books on the subject, especially "The Big Short." The film was decent, but
didn't go into the same amount of detail as the book.

There was much fraud, especially in two places: At the ratings agencies who
turned garbage bonds into A+++ good to go, never-gonna-lose investments. They
should have all gone to jail for that.

The second place was at the banks doing no-doc mortgages because the bankers
had huge demand for the crap bonds and the result was that lenders were both
outright fabricating loans or lending money to illegal immigrants who couldn't
speak any English and didn't even have jobs. Tons of un-prosecuted fraud all
over the place there. A few people went to jail, not many. Look at Wachovia
Bank and Countrywide as two examples.

The other place there was not fraud but enormous unethical behavior was in the
sale of CDOs--the "insurance" policies that backed up all the garbage bonds
with huge leverage. CDOs took down Bear Stearns and in all honesty, should
have taken down all the big players including Goldman Sachs, but the Fed
stepped in and bailed them out to the tune of trillions of dollars.

The American public paid the price. If you recall the $4-5+/gal gasoline from
2009 and on? That was all part of the bailout scheme. And your 401K took a
huge hit, some people still haven't recovered from that time period.

Regular people paid literally out of their own pockets so that a bunch of
shitbirds could stay billionaires. We allowed corrupt politicians to bail out
their pals and we didn't do anything. We the people should have revolted and
shot every one of those stinking crooks. Instead, we the people are treated
for what we are--a bunch of doormats.

------
amckinlay
And yet, strangely, no one blames the SEC.

------
ethn
Bankers aren't the cause of the financial crisis. Societies have always had a
scapegoat to conveniently break societal tensions, previously with physical
sacrifices, and presently with sacrificing the money of scapegoated
individuals.

It's unlikely that a single sector of economy could suddenly cause a
widespread collapse, especially without unrecoverable failure. A more cogent
explanation is the behavior of the Federal Reserve. Similar to the Great
Depression, the growth rate of the M3 was reduced by around 10 percent during
the peaks of the recessions.

 _Reading:[https://iea.org.uk/blog/a-monetarist-explanation-of-the-
grea...](https://iea.org.uk/blog/a-monetarist-explanation-of-the-great-
recession*)

------
fallingfrog
I've always assumed the reason was that the bankers could point fingers and
name names of people in government who facilitated the fraud. If there was
some better reason, the SEC would have given it to us a long time ago. The
silence speaks loudly enough IMHO.

------
BurningFrog
The assumption in the headline is very questionable.

Was the cause of the crisis really that bankers happened to be extra
criminally minded in the early 2000-s?

I don't doubt crimes were committed, but I think the root causes are found in
government and Fed policies of the era.

~~~
nathanvanfleet
But isn't the policy set by the banks by specifically telling the government
to remove laws and restrictions?

------
mnm1
Oh, please. Federal statutes are so broad, prosecutors could literally pick
the people they want to bring down and do so. While this is not a good thing
generally, it should have been done here and the perpetrators prosecuted.
Federal prosecutors just weren't interested in doing their job and
potentially, eliminating some of the biggest political donors ever. But don't
tell me that they don't have the tools given our extremely vague federal laws.
Hell, many of our federal laws don't even require that the prosecutors prove
criminal intent, something the author seems unaware of.

------
UncleEntity
Why aren't Bernanke and Greenspan in prison for causing the financial crisis?

~~~
sumedh
Because lowering interest rates and pushing for deregulation is not illegal.

------
eganist
I keep seeing the "we made a profit on the bailouts" line repeated. Usually
these comments would end up partially sourced, but I got a bit tired of
hearing the line repeated ad nauseam, so I did a bit of googling and came up
with this Pro Publica scorecard:
[https://projects.propublica.org/bailout/](https://projects.propublica.org/bailout/)

Taking them on faith alone, it'd seem that in the aggregate, we did alright.
Is there any reason why I should believe otherwise?

~~~
babaganoosh89
In case of the banks, fed cut the fed rate to 0%, then banks preceded to
massively buy 10 year treasuries. Banks were speculating the fed wouldn’t risk
raising rates too fast and bankrupt already weak banks that were speculating
on the 10 years in the first place.

------
bitL
There are some in Iceland, and one NASDAQ founder was jailed as well.

------
xchaotic
So that's in the past and now we have a cryptocurrencies bubble coming up. Who
should be punished and why? Here there is no intermediary, just the greed of
the people and their stupidity. Let the markets punish or reward them.

------
lowbloodsugar
Why aren't the politicians?

------
agumonkey
Energy physicist Jean Marc Jancovic says that the subprime crisis was due to
shifts in energy productions, so somehow maybe bankers weren't directly
responsible, or not more than other eras where energy kept growing

------
bluetwo
Do you think anyone will go to jail for causing the next great financial
crisis?

------
cowpig
I don't know enough about finance or law to know what should have been done.
But I can clearly see that what was done did nothing to restore public faith
in our banking institutions.

------
bpanon
Because if you were smart enough to understand that the banks own quite
literally everything as they control currency itself and they're not going to
put themselves in jail.

------
epberry
The bailout was necessary but a tough pill to swallow. My understanding is
that there was really no good way to provide direct relief to citizens. AIG
and others failing posed a systematic risk and the most effective way to
stabilize the economy was to directely lend them hundreds of billions. I think
most economists agree that letting the banks fail would have resulted in a
depression. Sure the bankers would have lost everything but so would normal
people. Instead your average American was spared the worst of it but at the
cost of bankers not going to jail and a truly alarming amount of future debt.

~~~
bradleyjg
There was the Swedish solution (pushed during the crisis as I recall by
Krugman among others): nationalize the failed institutions, with an eye to
spinning them back off after the crisis had passed. That would have wiped out
the shareholders, including employees with stock holdings, and caused losses
on bonds, but would have kept the institutions running on a go forward basis
in order to continue to provide financial services to the real economy.

~~~
qaq
Financial sector is 40% of US GDP one would imagine wiping out 20-30% of
everyone's retirement accounts would not go over too well with voters.

------
rcdrury
Because they "caused" it by complying with irresponsible "fair" lending
regulations. Unfortunately, they had to; it was the law.

------
dogruck
Why aren’t any congress people in prison for causing the financial crisis?

~~~
sumedh
Like who?

~~~
dogruck
Any of them who voted for laws that forced banks to lower, or ignore, existing
standards for giving out home loans.

------
whatyoucantsay
In the US, like most countries, the justice system is pay to play.

------
known
Governments across the world are DEPENDENT on Banks.

------
ianai
IIRC it took 10 years after the Great Depression for anyone to go to prison.
The US economy is largely unregulated.

------
cryoshon
this reads like longform apologia for government inaction and banker
exploitation...

at one point the interviewee makes it seem like the government didn't do
prosecutions because it would have taken a lot of paperwork.

why do we pay taxes?

~~~
jeffdavis
The government is restrained by due process and the rule of law. "Paperwork"
should not be able to overcome that.

The much more reasonable explanation is that there simply were not laws
clearly written to prevent this behavior, or that some attempt was made to
write such laws but they are unenforceable for some reason.

------
grandalf
As others have pointed out, the actions taken by the financial firms'
employees were not illegal. In hindsight some were harmful and perhaps should
have been, but the question should be why weren't they illegal in the first
place.

The answer is that regulators did an abysmal job of understanding the perverse
incentives that plagued the industry. Among the biggest causes of bad judgment
was the incorrect price signaling created by GSEs that were not following
proper accounting and disclosure procedures.

On one hand the financial firms had significant regulatory capture and had
been enjoying lots of profits due to their success influencing regulators.

But on the other hand, the entire system of "markets" that were most relevant
to the crisis were the most heavily regulated and tied to specific policy
goals.

It seems odd that we'd ever expect a system that is so politicized to ever be
regulated in a rational and appropriate way.

Broadly viewed, we can see that the combination of regulations and areas
loosely regulated and left up to the discretion of firms constituted a
significant degree of centralized control, which turned out to be "corrupt"
enough to result in a lot of bad decisions and the crash that ensued.

If we assume that all systems are prone to this sort of "centralization risk"
we can better appreciate the benefits of decentralized governance that exist
with some block chain systems.

Forget about jail for what happened in 2008, why should we ever trust
financial regulators of financial firms again to regulate our financial system
responsibly? Are we supposed to believe that the perverse incentives for
regulatory capture, socializing risk, etc., suddenly ceased to exist?

I'd argue that we should not. We should realize that human institutions
typically require participants to have _some_ trust in other participants, but
that the more trust is required the more vulnerable the institution is to the
kind of problems that plagued the finance industry.

We trusted the GSEs to be acting responsibly even though no financials were
released. Regulators trusted ratings agencies to apply disciplined processes
to rating generation in spite of the profit motive not to do so, the public
trusted regulators to ensure adequate underwriting of risk capital, etc., etc.
All these things, many of them not even measurable due to the significant
accounting slop involved, were vulnerabilities waiting to be exploited.

When a building has marble pillars outside and everyone inside is wearing
expensive suits, what we are seeing is _signaling_ of trustworthiness. When
the banker is wearing $1500 Italian leather shoes and a $50K watch we can
assume he's earned those things by being trustworthy over time. When we enter
the high ceilinged room and see the marble we are meant to trust the
institution itself. After all, how could this structure, meant to last
thousands of years in the elements, not indicate the highest level of
accountability and honesty?

We must realize that even the most well-intentioned institutions are
vulnerable to centralization risk, aka the corruption of the inner workings
and mechanisms in a way that is not at first noticeable but benefits insiders.

The finance industry used to be simply about risk, money and time. But in
today's world it typically follows the pattern of taking money as an input,
and producing as an output financial products that foist off some of the risk
to society so that the owners can make a profit, with the downside risk being
borne by society as a whole.

We see this process in action time and again, and it will continue to happen
as long as our regulatory approach rewards massive firm size, prevents
competition, and socializes losses.

Let's hope that we see an emergence of an alternative system that relies on a
lot less trust and is much less vulnerable to centralization and corruption.

~~~
topspin
"The answer is that regulators did an abysmal job of understanding the
perverse incentives that plagued the industry."

My cynicism kicks in here. They did not fail to understand. They actively
ignored, downplayed and dismissed clear evidence and demonized everyone that
failed to participate in the fiction. There are powerful pressure groups and
special interests that support from the debt driven, government incentivized
mortgage system. They have captured the necessary regulators and legislators
and expect these people adopt the appropriate blind spots.

~~~
grandalf
Mine too. I am not attempting to let regulators off easy in this comment,
merely pointing out that regardless of their specific motivations or their
specific level of human integrity, systems that rely upon the good judgment of
a small number of people often trend toward corruption... not necessarily
through willful graft but due to human nature.

------
Frogolocalypse
They did their jobs. They got a pay rise.

------
down
leave them without Jobs as they left us, use crypto, a crypto address is like
a bank account.

------
junkscience2017
most of the financial instruments expolited prior to the crash were completely
legal even though they were "toxic".

Martha Stewart and Bernie Madoff are proof that actual crime can imply prison
time

~~~
sitkack
Martha Stewart was a fall guy for people to feel like something was being
done. What she was actually guilty of was, "lying to a federal agent."

[http://corporate.findlaw.com/litigation-disputes/how-to-
avoi...](http://corporate.findlaw.com/litigation-disputes/how-to-avoid-going-
to-jail-under-18-u-s-c-section-1001-for-lying.html)

~~~
goodcanadian
And Al Capone went to jail for tax evasion. The prosecutors use what tools
they have at their disposal to get the desired outcome. Sometimes, it is an
overall good, and sometimes it is not.

------
1024core
> Why Aren’t Any Bankers in Prison for Causing the Financial Crisis?

Two words: Chuck Schumer.

He's the Democrats lifeline to the Wall Street, and he'll be damned if the
Democrats do anything to jeopardize that relationship.

Of course, Republicans are even worse.

------
KasianFranks
No worries, Cyrpto will be their prison.

