Market Overview

WSJ Analysis Shows Very Few Bankers Have Been Held Accountable For Financial Crisis

Share:
WSJ Analysis Shows Very Few Bankers Have Been Held Accountable For Financial Crisis

A new Wall Street Journal report by Jean Eaglesham reveals just how rarely individual bank employees are convicted of crimes.

Following the Financial Crisis in which irresponsible lending and trading practices at the big banks nearly led to the collapse of the U.S. financial system, many Americans assumed that there would be a parade of bankers heading to prison.

Since 2009, the Justice Department, Securities and Exchange Commission and the Commodity Futures Trading Commission have brought a total of 156 criminal and civil cases against 10 of the largest banks on Wall Street. Out of those 156 cases, only 47 individual bank employees were charged with crimes related to the cases.

All but 11 out of the 47 bankers charged either plead guilty to criminal counts or agreed to civil settlements. Of the 11 cases that went to court, six of the employees charged were found not liable or had their cases thrown out.

Related Link: Citigroup Agrees To $425M Fine For Benchmark Manipulation

All in all, the government won contested cases against just five bank employees.

The Journal’s research focused only on cases in which the banks themselves were charged, but the relatively small number of individual convictions is still surprising.

Unfortunately, much of the behavior on Wall Street that led to the Financial Crisis was stupid and reckless, but not illegal. Bankers can’t be charged with simply being bad at their jobs.

According to the report, Bank of America Corp (NYSE: BAC), JPMorgan Chase & Co. (NYSE: JPM), UBS Group AG (USA) (NYSE: UBS) and Morgan Stanley (NYSE: MS) have had the most individuals charged by the U.S. government since the Financial Crisis.

In an effort to beef up individual accountability in corporate crimes, the Justice Department recently instituted a new set of guidelines that recommend that prosecutors not give companies credit for cooperation unless they hand over information on individual employees.

Disclosure: The author is long BAC.

Posted-In: CFTC financial crisis Jean Eaglesham JoDNews Legal Events General Best of Benzinga

 

Related Articles (BAC + JPM)

View Comments and Join the Discussion!

Baird Initiates TransUnion At Outperform Citing Best-In-Class Organic Growth

Started From The Bottom… Peak Resorts Gets A Double Upgrade