by Jacob Davies
Via Naked Capitalism, the FDIC is starting investigations into 50 executives, directors, and employees at failed institutions:
The agency responsible for dealing with bank failures is stepping up its effort to punish alleged recklessness, fraud and other criminal behavior, as U.S. officials did in the wake of the savings-and-loan crisis a generation ago. More than 300 banks and savings institutions have failed since the start of 2008, but just a few have led to criminal charges being filed against bank officials.
Pressure is high on regulators to identify and prosecute bankers for any wrongdoing that contributed to the largest number of failures in nearly 20 years. The September 2008 collapse of Washington Mutual Inc. was the biggest ever, with seven times the value of the assets that Continental Illinois Corp. had when it failed in 1984. The current epidemic of bank failures, including 146 so far this year, has deepened the nation’s lending drought and left the industry’s survivors with more muscle to squeeze customers.
The S&L crisis of the 1980s and 1990s killed more than 1,800 institutions. From 1990 to 1995, federal officials prosecuted about 1,850 bank insiders. More than 1,000 officers, directors and other officials went to prison, and federal agencies collected $4.5 billion in professional-liability claims.
In the current mess, no high-profile banker has been criminally charged in connection with a financial institution’s demise, as Charles Keating was for fraud after American Continental Corp. failed in 1989. He served four years in prison and became synonymous with the S&L crisis.
Suspected criminal activity is handled by the FDIC’s office of investigations, usually working with the FBI. Recommendations for prosecutions are referred to the Justice Department. It often takes at least 18 months for legal action to be brought after a bank fails, meaning the surge in scrutiny is likely to continue for years. FDIC officials expect the failure wave to peak this year.
That does explain the slow start here, assuming it’s really true. Well, better late than never. The White House would do well to light a fire under the FDIC on this.
I want to see them get prosecuted for all the fraud going on.
The White House would do well to light a fire under the FDIC on this.
The White House will be doing well to not clamp down and kill it. When has Obama done something that Wall Street didn’t want?
Fast, slow, all the same as far as I’m concerned. Just get it done.
My question is this: the S&L thing was what, 25 years ago?
How many times are we going to go through this crap before somebody figures out that the “unregulated free market” is a freaking tank full of sharks?
Speculators blow the economy up, the public picks up the mess. Lather, rinse, and repeat.
Didn’t we get this out of our system in the 19th Century? Wasn’t the big Depression enough of a heads up?
We have to do this once a generation as a reminder?
It’s really starting to piss me off.
I concur with Russell. But it’s important to remember that we have socialism for the rich in our good nation…the poor? Not so much.
Breaking this Ring Cycle (yes, sad pun)will not be easy.
And the irony is folks glibly claim that “socialism doesn’t work”.
What’s that about lying eyes?
Didn’t we get this out of our system in the 19th Century? Wasn’t the big Depression enough of a heads up?
There are some who would love to return to those days. Or, at least, they would like to live in their airbrushed romantic misconception of that era. I doubt their idyllic fugues include 16-hour work days, living on scrip in company towns, or armed conflict between strikers and U.S. troops.
I’m less concerned about the failures than I am about the documentation fraud & foreclosure mills. Both should be looked into, but one is, so me, more clearly the result of intent.
Good luck with this but the FDIC will find it difficult to prosecute greed and stupidity since last I looked those are core values in our economic system.
Keep hoping.
Don’t hold your breath.
Makes me feel all warm and pitchforky (see the thread from the 16th)
Give me a call when they are going after the big boys at Citi, BoA, et al. My guess is a bunch of regional bankers are going to get whacked if any or “Pvt 1st Class” types at the Citi’s and BoA’s of the world.
Angelo Mozilo will be the Lieutenant Calley of this affair.
Meanwhile the Republican politicians of the party that created the deficit are saying that we can’t afford to extend unemployement because it will make the deficit go up but we can afford to cut taxes for rich people.
I can’t find any charity in my heart for the people who voted for these pigs. I’m sorry, I just can’t. I’m not a good person, I guess.
This is how the selishness of Repulbicans plays out in my county: more umemployment equals more homelessness equals more businewese downsizing or failing equals more unemployment equals mor homelessnness equlas homeless dogs everywhere.
I feed a former pet who now lives at a gas station were she solicites people who cne in to buy gas. It breaks my heart ot she her approaching cars with a stick in her outh: obvioulsy playing fetch is part of her concept of dog/human relations. She tinks if someone will just play fetch with her they will let her in theri car and she will go home…
The dog rescues are full. The city shelter is closing de to lack of funding. There are dumped pets all over the damned conty. I’m feedin g another dog that lives in an abandonned house. There used to be four dogs there buyt three have disappeared.
The line at teh food back goes clear around the b lock. I’m getting a dollar and hour pay cut and lucky to have a job at all. Without my job I’d have no health insurance. If it wasn’t for the new law I’d be uninsurable–ie if the Republicans had their way I’d have no insurannce. In two years when the mandate kicks in I won’t need my job any more. With the mandate I will be able to afford to work a job tghat does not provide insurance. But the Republicans want to take that away too.
I know we are supposed to have good mannners on theis site and if the powers that be want to kick me off, well do what you have to do. It’s Ok.
I’m just sick of it and do’t feel like being polite about it. The Republican party is the party of oligarchy and the people who vogted for them are at best fools and quite frewquently people wh are every bit as selfish and callous and selfserving as the trhugs they voted for. There’s no excuse.
The rules are about obscenity and personal attacks. I don’t think they say anything about not being annoyed with voters who voted for the Nihilist Party or not being upset about the economic situation.
What I find so bizarre is the total lack of interest in addressing unemployment. Republican Congressmen must be receiving a deluge of letters and calls from distressed constituents. What kind of person do you have to be to be able to ignore that?
Failure to pass the unemployment renewal is going to cause some serious, serious problems. I may have to get together a post on that.
Republican Congressmen must be receiving a deluge of letters and calls from distressed constituents. What kind of person do you have to be to be able to ignore that?
The GOP’s constituents are not the nihilistic willfully ignorant patsies who voted for them. Their constituents are the plutarchs who bankroll the GOP and the Tea Party. They have no conscience to be bothered by, and less empathy than a rabid dog.