30, October 2014 Wall Street recidivism
Buoyed by the certainty that that the Justice Department
would never hold the titans of Wall Street accountable for their financial
shenanigans, they are back engaging in the same dirty business. Just two years
after conducting massive fraud, some of the world’s biggest banks are now
suspected of a repeat performance.
Several large banks and their hired guns - high powered consulting firms
- are again in the cross hairs of federal prosecutors.
Several large foreign banks have been cited for doing
business with Iran in violation of US law which was enacted out of deference to
Israel which is itself in complete violation of international law. Makes sense?
Historically, when banks have repeatedly run afoul of the
law, they have paid a small fine, pocketed huge bonuses and returned to
business as usual in sharp contrast to the average ‘small’ petty criminal. The fines are tax deductible and regarded as
the cost of doing business.
Prosecutors have traditionally favored so-called deferred-prosecution
agreements, which suspend criminal charges in exchange for the bank’s paying a
fine and promising to curtail their criminal behavior. This has enabled a
disturbing pattern of Wall Street recidivism. It is ironic that when assessing
the magnitude of the criminal behavior, the government outsources the task to
consultants who are often the bank’s own customers. In short, the system is
rotten to the core.
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