Has the Government Let Wall Street Bankers Off Too Easily?

Tuesday, January 22, 2013

Wall Street bankers have long been blamed for reckless behavior and excesses that led to the financial crisis of 2008. In the run-up to the financial meltdown, big bank executives packaged risky mortgage loans into securities and sold them off to investors, eventually costing those investors and homeowners, hundreds of billions of dollars in loses.

As President Obama begins his second term in office, no senior Wall Street executives have been held criminally liable for alleged fraud that led to the mortgage crisis. 

Lanny Breuer, the head of the Justice Department’s Criminal Division, says in a new documentary from Frontline called "The Untouchables": "I am personally offended by much of what I have seen. I think there was a level of greed, a level of excessive risk taking in this situation that I find abominable and I find very upsetting. But that is not what makes a criminal case. What makes a criminal case is that I can prove beyond a reasonable doubt every element of a crime." 

Government critics, including former New York Attorney General Eliot Spitzer, disagree. In the documentary, Spitzer says: "The Justice Department failed." "They have not done what needed to be done. They did not ever try to bring together one coherent narrative, laying out the entirety of the story against one of the major players and demand sanctions that are meaningful."

Martin Smith is the producer and correspondent for Frontline’s "The Untouchables," which investigates the Justice Department’s reluctance to indict Wall Street bankers. "The Untouchables" was produced by our partner, WGBH, and will be broadcast on PBS tonight.


Martin Smith

Produced by:

Elizabeth Ross

Comments [5]

Paul Taslimi from medford

Incredulity over the the bankers skating over any consequences for their misdeeds really comes out of forgetting the past. Since when have royalty been held to account for the misery they inflicted on peasants. Nearly the whole contingent of the president's early financial advisers were either former Goldman Sacks execs or intimately connected to Wall street. So did we seriously expected their advice to be "hey Mr. President, let's start by holding our former bosses and colleagues and friends and even ourselves really accountable and perhaps even setting the Justice department on them"?
Now Frontline comes along and proves it was pretty nasty stuff they did. All we can really do is shake our heads as collectively as possible and accept the fact that those who are above us can do absolutely whatever they wish.

Jan. 22 2013 04:59 PM

I erred in my earlier comment; not finishing the sentence I started, indaciating that in last week's FRONTLINE, the producers managed to get one Republican on the record; Rep. Cathy McMorris Rodgers. Who wasn't mentioned in the script. She was apparently the only Republican who would talk to FRONTLINE, and if I were in the House, I'd have very serious misgivings about cooperating with a FRONTLINE feature. There is a reason, why the entire Obama White House appears to be in FRONTLINE's Rolodex, and why so few Republicans will speak to FRONTLINE interviewers.

I also need to not that I challenged FRONTLINE's producers about this in their last liveblog and I was told that they will do an interview with John Boehner for the next FRONTLINE, in February. I hope Boehner's staff has another tape running, so that they will be able to answer what is bound to be a concerted attack.

Jan. 22 2013 02:02 PM
Larry Fisher from Brooklyn, N.Y.

Criminals should be encouraged to give up their "Old School" criminal activity and go to business school where they can learn how to "Kafka" up all rules and laws and loophole their way to riches; or in other words, "rip off the suckers".

I understand the "bundling" up of bad mortgages and putting little bows on them and shipping them under Christmas trees around the world and the country. I just don't see how the next "Bad Santa" will be stopped.

How do you stop legitimate square looking guys in expensive suits,from keeping it honest, when they know there is no jail time in their future, and the worst that could happen is get a ticket for a couple of million dollars; which they keep in their wallet as pocket change.

The larger the Criminal, the less likely he will fall, and the less likely he will be seen as a criminal to himself or the public. It's funny that way.

Jan. 22 2013 12:48 PM

Another Tuesday, another FRONTLINE episode, another promo on The Takeaway.

I'll give FRONTLINE this much credit. Last week, they did a liveblog for questions on how they produced the latest Obama documentary. They couldn't explain how it was that they had massive, almost complete cooperation from the Obama inner circle of top advisors, but how they couldn't get an interview with John Boehner, Eric Cantor or other top Republicans. (They claimed that they got

I just really wonder why, if there is such a clear case to be made against individual bankers or even banks for some sort of fraud, why those cases haven't been made. If FRONTLINE has a nice open and shut case against individuals, they should name them.

In fact, as readers of the Wall Street Journal know, the long dearth of any successful prosecutions -- there has NEVER been a successful prosecution of anyone for the grand financial meltdown of 2008 -- is not due to any grand conspiracy but rather due to the fact that it was a financial bubble without much actionable wrongdoing apart from the devil's bargain between Congress, the federal thrifts (Fannie Mae and Freddie Mac) and the subprime lenders who were federally encouraged to do the business that they did.

Honest to God; if anyone wanted to start a grand inquisition, the person to start with is former Rep. Barney Frank. Followed by federally-funded millionaires Franklin Raines and super-Democrat insider Jamie Gorelick.

But on the meta-topic of covering this story; if the only news and commentary information that I got was from public radio and public television on the subject of the financial meltdown, I'd feel like (and I'd be!?) such an idiot, wrapped in a blanket of one-sided ignorance.

Jan. 22 2013 11:52 AM

"In the run-up to the financial meltdown, big bank executives packaged risky mortgage loans into securities... "

Why get involved in so many risky mortgages in the first place?
What pressure did government regulators and "progressive" politicians and activists inflict in the run-up to the financial meltdown to instigate such a reckless departure from traditional lending practices?

Isn't this the most political Justice Department in recent memory with an AG who was just held in contempt of Congress? Could it be that the reason they don't prosecute is because all roads will lead back to their "progressive" bosses and their financial support?

Jan. 22 2013 09:41 AM

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