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Finally some justice!
Here's a link to an article describing a great win for the Justice Department.
This is the first time the Justice Department was successful in bringing charges against executives leading up to the financial crisis. The majority of their cases either end in acquittal or are dismissed due to lack of hard evidence. Taylor, Bean & Whitaker's scheme evidently started in 2002 and has continued until 2009, when the company collapsed.
I was personally quite happy to finally see someone at the top being charged for their fraudulent actions. Unfortunately, as the article pointed out, this is a rarity. In the past, the Justice Department has adopted a softer, more forgiving approach for larger companies in order to limit the economic damage that results from vigorous prosecutions. Do you think this win for the Justice Department will motivate them to bring more charges against guilty Wallstreet executives? Or will they continue to go unpunished?
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Nice article Becky. The punishment fits the crime here. In this situation, Farkas committed purposeful fraud, and the article mentioned selling worthless/fake mortgages. In my opinion, there is a distinction between this malicious fraud and the questionable business practices we have seen on Wall Street. In most of those situations, the firms were taking advantage of loopholes and deregulation, not breaking the law according to its technicalities (there are obviously exceptions to this generalization). That's why, in my opinion, no Wall Street Execs will be successfully prosecuted.
ReplyDeleteI really liked this article as well. I am glad that the Justice Department is taking measures to hold some of the financial and mortgage firms accountable for their actions that have led us into the financial crisis. I think this article highlights that prosecution of such major crimes will also take time. They use example of Bear Sterns to show that not all cases end up succeeding in prosecuting the individuals. The fact that this scheme began in 2002 and the lender sold Colonial about $1.5 billion in “worthless” and “fake” mortgages, and only saw a decision in prosecution recently shows us that it will take time to build cases against other firms that tried to sham the government and investors.
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