Wall Street is a high crime area.
So says Dennis Kelleher — a former Skadden Arps partner and current president of Better Markets, a public interest group based in Washington, D.C.
“Wall Street will remain a high crime area until senior executives and their companies are criminally prosecuted and personally punished with meaningful sanctions,” Kelleher told Corporate Crime Reporter. “Then, and only then will law enforcement return to Wall Street.”
In the run up to the May 3 Corporate Crime Reporter’s conference at the National Press Club, we reached out to Kelleher and asked him about the failure of the Securities and Exchange Commission (SEC) and the Justice Department to bring criminal prosecutions against the big banks and their executives.
Turns out that Kelleher had just posted an article on the subject titled Lie, Buy, Then Lie Some More: Global TBTF Banks’ MO.
“The bottom line — the Department of Justice and the SEC are simply not viewed as much of a threat to the CEOs and executives that run the biggest banks on Wall Street and around the globe,” Kelleher said.
“They know the worst that happens to a too-big-to-fail bank when it breaks the law is to use shareholders money to pay off the prosecutors/regulators so they can brag about the latest biggest fine,” he said. “Of course, that doesn’t apply to stupidly breaking the criminal law like insider trading, but that’s not the laws the biggest banks break.”
“This was well-known long before Attorney General Eric Holder admitted it a few weeks ago,” Kelleher said.
“Wall Street’s executives don’t pay attention to words, no matter how much they pretend to be hurt by Obama’s rare mild criticism. They watch what the Department of Justice and the SEC have or, more accurately, have not done — not one single senior executive of a single too-big-to-fail bank has been held accountable for anything in years.”
“And, even the fines imposed on the banks and other big, powerful, well-connected players have been nothing more than puny, meaningless cost-of-doing-business, slaps-on-the-wrists: Citigroup, JP Morgan, Goldman, SAC Capital — fined $616 million, but CEO Steve Cohen spends $155 million just days later on a Picasso painting, illustrating exactly how little the SEC fine really means.”
“Same for HSBC, Standard Chartered and the others, where not one executive was held accountable, not even when the Chairman, CEO and CFO of a punished bank denies the material admissions that were the basis for the entire non-prosecution agreement.”
“This not only sets up an unconscionable double standard of justice, but it also incentivizes, rewards and guarantees more crime on Wall Street and at the global banks.”
“Wall Street gets the message and their recidivist records prove that they simply have no fear of the Department of Justice or the SEC,” Kelleher said.