New Reports Put Financial Regulators in the Hot Seat
By Michael SmallbergRead more.
In case you missed it in our Morning Smoke, we wanted to highlight two must-read stories that came out today on the key causes of the financial crisis and the alarming absence of criminal prosecutions for the major players who drove the economy to the brink of collapse.
The first is a front-page story in today’s New York Times that thoroughly documents the drop in criminal referrals by financial and banking regulators in recent years. Drawing on data compiled by the Transactional Records Access Clearinghouse (TRAC), the article raises troubling and largely unanswered questions about recent changes in the federal government’s approach toward prosecuting white-collar crime (full disclosure: TRAC co-director David Burnham is a POGO board member).
The lack of criminal referrals by our nation’s top regulators, widely observed by financial commentators and legal experts, is thoroughly documented in TRAC’s data:
The university’s Transactional Records Access Clearinghouse indicates that in 1995, bank regulators referred 1,837 cases to the Justice Department. In 2006, that number had fallen to 75. In the four subsequent years, a period encompassing the worst of the crisis, an average of only 72 a year have been referred for criminal prosecution....