Wall Street banks don’t go to jail. People go to jail. Since you can’t put a bank in jail the regulatory agencies let them pay substantial fines when they are caught with their hands in the cookie jar.
The major banks in the article 5 Banks to Pay Billions and Plead Guilty in Currency and Interest Rate Cases got caught so they are paying fines that total $5.6 billion. This is on top of other billion dollar fines they have paid for ripping off individual and institutional investors. This may look like a big fine that should have some deterrent value. But, that is not true. The fine is a cost of doing business and is the equivalent of a few weeks of earnings – more like a slap on the wrist.
Unfortunately, the executives who run the banks are getting off scot-free. They get to retain their opulent offices, private jets, and eight figure bonuses.
A few lower level employees are the scapegoats and they have been fired. It is scary to think they were able to run billion dollar frauds and none of the banks’ executives knew it were happening. What else is happening that management does not know about? Are the Wall Street banks so big and complex that they are out of control?
The really bad news is executives will continue to defraud clients to enrich themselves as long as there is no accountability and they can act with impunity.
How do they get away with it? Political connections. They route hundreds of millions of dollars of personal and company money to corrupt politicians who sit on committees that control the regulatory agencies. Their get out of jail free card is their ability to pay fines without admitting any guilt. The regulatory agencies say they allow this to avoid lengthy trials. If they aren’t guilty, why pay the fine.
Meanwhile, millions of investors yawn and pretend like this is the other guy’s problem. It does not impact them so why should they care that greedy Wall Street executives have colluded with corrupt politicians to benefit themselves at the expense of investors who do not have their political connections. Greed and corruption impact you everyday, you just don’t see it.
Or do you? Tell us what you think!