Barney Frank to Attorney General Holder: Prosecute Banks for the criminals they are!
Dear Mr. Attorney General:
I note several instances recently in which Administration officials have proceeded civilly against blatant violations of our important financial laws, in part because of the difficulty of proving cases beyond a reasonable doubt, especially where the law may have been somewhat uncertain, but also because of a concern that the criminal conviction—and even indictment—of a major financial institution could have a destabilizing effect. This latter consideration does not apply, similarly, to individuals. It is, of course, the case that no corporation can have engaged in wrongdoing without the active decision of individual officers of that entity. I believe it is also the case that prosecuting individuals has more of a deterrent effect than prosecuting corporations.
I am writing to you as well as to financial regulators, understanding that the decision to pursue criminal proceedings rests with the Justice Department, so I ask that there be a series of consultations involving law enforcement officials and regulators with the goal of increasing prosecution of culpable individuals as an important step in seeing that the laws that protect the stability and integrity of our financial system are better observed.
I had a halfway discussion on this topic just the other day. There is a similar comment from one of our regular readers, The List of X. The point was made appropriately about prosecuting the banks involved with crimes like the LIBOR manipulation.
The record of the DOJ on insider trading – particularly the division headed by Preet Bharara – is up to almost 60 convictions. Probably the easiest financial crime to prove.
But, the importance of jailing more of the crooks involved with LIBOR which will turn out to be the biggest banking scandal of the decade IMHO can’t be over-emphasized. There are at least seven more banks in the DOJ crosshairs. Hopefully, many more indictments..