"If you prosecute a CEO or other senior executive and send him or her to jail for committing a crime, the deterrent effect in my view vastly outweighs even the best compliance program you can put in place."It's unusual for a Federal Judge to weigh in on specific matters that could conceivably come before his Bench. It's even more unusual when those matters involve politically sensitive issues of national policy. A hard-hitting essay published recently in The New York Review Of Books by a 70-year old active United States District Judge has raised eyebrows for doing just that. Judge Jed S. Rakoff sits for the United States District Court for the Southern District of New York--the nerve center of the financial world. A Clinton appointee and former Federal prosecutor, he stunned the SEC in 2011 by rejecting a proposed 285 million dollar settlement between the U.S. and Citigroup in a case where Citigroup had been accused of misleading investors through the sale and packaging of collateralized debt obligations. Rakoff's rationale for rejecting that settlement--which he characterized as "pocket change"--was that Citigroup was not required to admit culpability. The SEC changed its position on this practice after this ruling.
Today Rakoff is once again getting under the government's skin. He wonders aloud why no high-level corporate CEO's or other managing officers in private Finance and Banking firms have been prosecuted for causing the financial meltdown that led to what we now know as the Great Recession. His essay, linked above, suggests several reasons and leads to at least one unsettling conclusion: that the Justice Department believes governmental officials' actions tacitly if not directly abetted and enabled the crisis to the point where prosecuting corporate CEO's would simply end up implicating the U.S. government.
Read more: http://www.dailykos.com/story/2013/12/25/1265127/-Why-No-Corporate-CEOs-Were-Prosecuted-For-Causing-The-Financial-Crisis?detail=email
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