Tuesday, August 25, 2015

Not Too Big to Jail

Presidential hopeful Hillary Clinton said in a recent speech on economic policy that individual bankers should go to jail for their role in the 2008 financial crisis.  In May 2015, JP Morgan  and Citibank, along with several foreign banks, plead guilty to conspiracy to manipulate the foreign currency exchange spot market.  The banks agreed to pay criminal fines of $2.5 billion.   That's not enough justice for Ms. Clinton. Individuals must go to jail and she promised that they will on her watch.  

A Morning Consult poll in April 2015 showed that about 58% of Americans surveyed think individual bank employees should be prosecuted, convicted and imprisoned for financial crimes and 44 % said that criminal sentences and fines for financial institutions is not sufficient to deter "Wall Street" from engaging in financial misdeeds.  So far, although banks have taken a beating, no individuals have been jailed for unlawful conduct contributing to the 2008 crisis.  The reasons why we haven't seen video of Wall Street bankers in orange jumpsuits remain the subject of speculation and debate.

Last week, the U.S. Attorneys' Office for the Southern District of New York announced a guilty plea and jail time for a banker.  Charles Antonucci, Sr., former president of The Park Avenue Bank, was sentenced to 30 months for his role in a massive fraud involving self-dealing, bribery, embezzlement of bank funds, and a scheme to steal about $11 million from the Troubled Assets Relief Program (TARP), a federal program established in the aftermath of the 2008 crisis to help banks stabilize and address liquidity problems.  (The press release is a fascinating read for those interested in how to rob a bank without a gun).  It's not the widespread humiliation of individual bankers that so many Americans seem to want, but it proves that if the evidence is there, bankers are not too big to jail.

No comments: