The dishonesty and profligacy of Wall Street bankers, traders, and executives has always been a problem, but it has been made most evident in recent years by the 2008 Global Financial Crisis, which is considered to be the worst financial crisis since the Great Depression in the 1930s. It is unsettling to think that America has arrived at a place where Wall Street bankers can go virtually unpunished for fraudulent actions that contribute to disastrous national and even global consequences, so it is a worthwhile question to ask: will there ever be justice?
Although 49 financial institutions have been forced to pay billions of dollars in settlements to compensate for their wrongdoing, this money has largely come from shareholders and not the individual bankers themselves. Despite this, bankers still are finding ways to line their pockets (for example, JPMorganChase CEO Jamie Dimon received a 74 percent raise at the beginning of 2014, bringing his yearly salary to $20 million). Bankruptcy filings surged 31 percent in 2008 as American citizens struggled to make ends meet, while the banks and financiers responsible for setting the crisis in motion have escaped prosecution.
To give more perspective, it is worth mentioning that in the midst of global stock market drops, bank bailouts, a tanking housing market, and prolonged unemployment, only one Wall Street executive was jailed for his part in the Global Financial Crisis. Compare this to the over 1,000 bankers who were jailed for their part in the savings-and-loan crisis of the 1980s. It doesn’t take a financial expert to see that something doesn’t quite add up.
Former U.S. Attorney Eric Holder contends that this lack of convictions was not for want of trying, but attributes it to the many creative ways that bankers have discovered to conceal evidence of their wrongdoing by technically abiding by the law while at the same time finding ways to cheat it. Essentially, there are some who see this behavior as evidence of recklessness, not fraud. The “too big to fail” argument touted in the 1999 “Holder Doctrine”, which warned of the dangers of prosecuting big banks, seems now to be clouding the judgment of the Justice Department and hindering the administration of true justice.
The Justice Department has “held banks accountable” by threatening to disclose to the public some of the banks’ most criminal-looking behaviors, including the packaging of shoddy mortgages into securities, and have been able to extract large settlements in exchange for keeping the record sealed. While this has cost banks billions of dollars in settlements, no one is ultimately held responsible for their actions, and no one has gone to prison. Unless individuals are held accountable for the damage they have caused, America is sending the message that bad behavior from bankers and financiers is acceptable as long as they can pay for silence.
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