Too Big To Jail? Executives Unscathed As Regulators Let Banks Report Criminal Fraud
The financial crisis has spawned hundreds of criminal prosecutions for alleged fraud. Yet so far, defendants have been mostly minor players such as real-estate agents, mortgage brokers, borrowers and a few low-level bank employees. No senior executives at large financial institutions face criminal charges.
That's in stark contrast to prosecutions during the savings and loan scandal two decades ago, when the government's strategy targeted and snagged some of banking's most powerful players. The approach back then succeeded in sending scores of S&L executives to prison, as well as junk-bond king Michael Milken and business tycoon Charles Keating Jr.
Source: One explanation for the difference may be that key bank regulators -- who did the detective work during the S&L crisis and sent more than 1,000 criminal referrals to prosecutors -- have this time left reporting fraud up to the banks themselves.
Spokesmen for two chief regulators, the Comptroller of the Currency and the Office of Thrift Supervision, say that they have not sent prosecutors a single case for criminal prosecution.
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