What Might Have Been . . .

By James Kwak

I was reading the plea deal in the SAC case, which was approved by the judge yesterday, and then I started reading the criminal indictment filed by the U.S. Attorney’s Office. What I noticed was how relatively simple it was for the prosecutors to convict SAC Capital for the insider trading committed by its employees. In short, because the firm enabled and benefited from the employees’ crimes, the firm was itself criminally liable.

Looking back at the enormous amount of effort the Southern District has put into Preet Bharara’s crusade against insider trading, you have to wonder what they might have accomplished had they instead targeted, say, fraud committed by Wall Street banks that contributed to the financial crisis. That’s the topic of my new column in The Atlantic. One of the frustrations of post-crisis legal proceedings is that it’s so hard to show that any senior executives themselves committed fraud, since they can usually plead some combination of ignorance and incompetence instead. Failing that, though, the government could have put more resources into flipping lower-level employees and then filing criminal indictments against their banks. Yesterday Bharara claimed, “when institutions flout the law in such a colossal way, they will pay a heavy price.” But only if the Department of Justice chooses to go after them.

11 thoughts on “What Might Have Been . . .

  1. Is there a principled answer to this, or is it just that the cost of indicting a systemically important bank was seen as too high (compared to indicting, say, a hedge fund)?

  2. “….since they can usually plead some combination of ignorance and incompetence instead…..”

    Gee, how can I get that “Executive Position”? Who can’t be really good at that dream job? – wink wink –

    In my particular instance, my personal bank deposits were funneled into a myriad of investments that were made to create the system that would extract my deposits. Just the facts, Ma’am.

    This is where ethics, philosophy, and traditional man-made “religions” that always kept an eye on the basic human need for fairness should have stepped in – long before technocrats took off in conversations way beyond anything approaching the coordination of all three cultural endeavors towards applied science. The reason that “theory” always got delegated to a hobby status instead of a earnest benefit to assist labor – meaning what kind of science it is –

    is so that “executives” can’t get away with ignorance and incompetence. Ignorance and incompetence is not what built the business they misguided.

    My biggest complaint with “psychology” has always been that it does not draw its judgments from the positive experience people have when they live from the wisdom handed down from 10,000 years of trade and civilization across huge empty swaths of land mass.

    And psychobabble

    (c’mon, be fair, CIA torturers being the most ardent worshippers at the altar of atheistically-inclined critics of the various meaning-of-life that had been agreed to as “real” across that same time span of human history is worthy of some street slang, “new” words – psychobabble – to gestalt all that what I just said about it being not fair who gets to judge as “authorities”)

    never bothered me because I could always count on religion’s role in coordinating big efforts of investment and labor.

    My religion defended my right to work for the greater good. I have no clue who changed it to me arguing for a right to work for the greater good if the profit margins aren’t high enough for the incompetent and ignorant executives.

    I do believe that in the three-pronged USA government, the way Justice was positioned in the sharing of power, is, and always was, a sincere attempt to find Justice based on the human need to experience some kind of fairness in THIS life that acknowledges the fact that dignity, itself, is equally distributed across humanity, itself.

    It may be censored off the internet – more like blown out with massive amounts of noise – but conversations are being had anyway about what is a fair distribution of the fruits of the combined efforts of investments and labor to create the eternal NOW that is all that we have now to share, if you will.

    Thinking just might be more fun than a-drinking…..and drugging….and the rest of the 7 DEADLY habit-sins – deadly only to the NOW. God takes care of the the judgment of the “soul”, which religionists of authority always conveniently forget.

    Math was no help – these bottom-line numbers work:

    More misery for others = More $$$$ for ME ME ME

    Life. Go figure.

  3. There are certain regular commenters here who cover an awful lot of territory, which seems to be of an ADHD nature, if you can actually understand what the hell it is they are talking about to begin with.

    Am I alone on this??? Show of hands please.

  4. Michael Lewis’s book is OVER-RATED.

    Want the real deal?? Best Finance/History book of 2014??? Look no further friends:

  5. WORSE than McCarthyism, “Moses”, the whole “anti” schtick to crawl into everyone’s pubis through an internet liceform….

    What else you got?

  6. On more worthy topics than women at the stage of running out of testosterone and crying out to the world for desperately desired attention…… (I suggest Annie set off a bullhorn in her husband’s ear in bed and quit torturing the rest of us)

    The European masses tend to be a pretty dumb and narrow-visioned group. They have become quite used to and expectant of America pulling their asses out of the frying pan every time they can’t manage to fend for themselves (economically AND militarily). Their FIRST move after Putin took over the Crimea region should have been to immediately look and arrange for other sources of gas than Russia. ASAP. So what has Europe done the last few weeks as the situation deteriorates??? Mostly scratching their anus and then putting their finger near to their nose to see if it stinks…then becoming mesmerized by the smell.

    Well, it’s coming folks….See here:



    And here:

    And here: https://twitter.com/Ukroblogger/status/455273278651650048/photo/1

    I guarantee one thing though folks….. When Putin takes over the rest of Ukraine and proceeds to shut off Europe’s gas supply, even as D-U-M-B-A-S-S and clueless as Europeans are, they’ll start to get the idea.

  7. Well, you showed the rest of the world what else you got, Moses…desperate profit seeking stocks tied to War Lord projects….and getting all hooligan snippy in your feeble monkey brain attempts to censor any comment from the public that can make lucid points about JUSTICE without the use of “political” magic words. Yes, Moses, your “anti” schtick did succeed in making enough noise to let the War Lords wreck mayhem.

    But censoring JUSTICE with political noise? way out there nutz…

    Seeking Justice is the point of this post by Kwak….which whizzed right over the heads of little liceforms….no surprise there…

    The FACT is that dignity is distributed in the eternal NOW equally to every individual human being, (I can provide a geekgreek symbol for how this law of “physics” works upon request :-))

    one can argue that embedded crabs in the pubis clearly were not invited in by the host.

    This MASSIVE robbery – Kwak provided some numbers previously that 40 million USA citizens were stripped of 50K each – happened because of the “technology” the liceforms built with those stolen funds for the sole purpose of doing just that – embedding into other people’s SAVINGS accounts. “Heartbleed” targeted human dignity and shot it dead through an invasion of privacy. How is THAT not “insider trading”?

    “Insider trading” was good medicine against liceforms before “technology”. Good to hear it still works if you are allowed to provide the evidence of how the technology was used.

    Let me go put that magic symbol on my doorway, no not the “short sale” or “foreclosed” symbol of liceform invasion, but the other one that allows all that psychobabbly misery to pass over this laptop….

    In the final analysis – “Moses” ain’t better than me or you or anyone else, no matter what his mommy told him. Who wants HIM embedded in your pubis?

    More misery for others = More $$$$ for ME ME ME

    The ONLY role of government is to PROTECT the INDIVIDUAL against FORCE AND FRAUD.

    Maybe need to add a new “gamer” level (it’s all a game with Nihilists) – protection against liceforms.

    I can’t imagine two more incompetent people to post about the Ukraine than the two who carefully cherry-picked the War Lord propaganda off the internet instead of offering anything cogent about Justice….ick…you two know squat….

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